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Clarification about cash accounts in an investment account

Hello all,

I need some clarification about how to use cash accounts within an investment account. Maybe information about best practices would be useful.

I have a mutual fund and I regularly redeem shares. A cash transaction is also logged. I had assumed that if the account was set up with 'Show cash in a checking account = no", the redemptions/transactions would just be logged, but it also logs and accumulates the cash balance. Since it does show the actual investment balance, it doesn't seem to be a problem, except for how the balances display in the list of accounts.

Maybe I missed something in the account setup. The particular financial institution does not provide cash accounts for the investment, so I would have to configure it differently. I see that, when I make the redemption transaction, it gives me an option to record the proceeds to either the cash account balance or to one of my bank savings/checking accounts. I can do the latter, but I do auto transaction downloads, so there would be duplication in my bank account

I hope this is clear. I need clarification as to either not have a cash account associated with the investment account or some other account configuration that I may be missing.

Many thanks for your assistance.

Comments

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited December 2019
    "I have a mutual fund and I regularly redeem shares. A cash transaction is also logged. I had assumed that if the account was set up with 'Show cash in a checking account = no", the redemptions/transactions would just be logged, but it also logs and accumulates the cash balance.

    That sounds absolutely correct to me.  If I have $15,000 of securities in a brokerage Account and I sell $1,000 of that security then at that point I have $14,000 of the security and $1,000 of cash.  The balance of the account is still $15,000 but that's now comprised to two components, a security and cash.  I can leave the cash in the Account, I can transfer it to my bank account, I can use it to buy a different security in that brokerage account.   Redemption or sales should accumulate cash in the account that holds the security, except for Single Mutual Fund Accounts in Quicken that can only hold one mutual fund.  In that case the sale would be a SoldX action with the cash going to a different account.

    "Since it does show the actual investment balance, it doesn't seem to be a problem, except for how the balances display in the list of accounts. "

    Not sure what you're referring to by "the list of accounts."  If you're referring to the window that comes up when you click on the Investment tab, commonly referred to as "Portfolio View", then the cash should show up there, and maybe its not?  If that's the case click "Options" in the upper right hand corner, click "Customize current view", click the Securities tag and make sure "No Security (Includes Cash)" is ticked.

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Hello all,

    I need some clarification about how to use cash accounts within an investment account. Maybe information about best practices would be useful.

    I have a mutual fund and I regularly redeem shares. A cash transaction is also logged. I had assumed that if the account was set up with 'Show cash in a checking account = no", the redemptions/transactions would just be logged, but it also logs and accumulates the cash balance.
    No.  it is the opposite.  If you opt 'Yes' to "Show cash in a checking account", Quicken creates a new fictional account in the checking spending section of the account list and all cash transactions that take place in your real world MF account are moved to that fictional checking account.  That is convenient for those who use such a real world account for frequent check-writing activities.  

    By opting No to that selection, you are saying to Quicken keep the cash-related transactions and the security related transactions and their balances all in the one investment account.  

    The other option off of that No selection appears to be what you want.  That is, you enter direct the cash from the MF account when you choose to.  You can do that using SoldX transactions that immediately transfer the proceeds of the sale to your real world checking account.  You can also use the normal Sold transaction with the cash going to the MF account, then enter a Withdraw or XOut transaction same day, a few days later, same amount, different amount, all your choices) to move the cash from the MF account to the real world checking account.  

    As far as the downloads for your checking account creating duplicates, you will need to monitor that and make sure transactions get properly matched.

    A nuance to be aware of is the dates.  You may make the MF sale and transfer on Monday and the MF company will show it that way.  Your bank may not credit the proceeds to your checking account until  Wednesday.  I usually leave the transactions as reported by the MF company.  That inflates my bank account a couple of days early, but I understand what is taking place.  It is an issue for some users, not for me.  

    HTH
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