Categorizing interest and dividend payments in investment accounts that are reinvested

How should I categorize interest and dividend payments in investment accounts where those payments are automatically used to purchase new funds? If I only care about the balance in investment accounts, should I categorize them as investment transfers?

For interest payments in savings and other banking accounts, I am assuming these should be categorized as income?

Yes, yes. When you say investment accounts, I assume you mean retirement accounts. If they are taxable accounts, then you will want to record as income.

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I have a similar question, but I don’t want these items showing up as income in my monthly budget because it’s not part of my checking account. I supposed the income and then the reinvestment will cancel each other out and will not create a positive income flow. Any additional thoughts on this?

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Hi @maktampa! Welcome back…

Great question…on my sheet, my interest postings appear as deposits and the reinvestments appear as deductions…same amounts for each so that, as you have pointed out, cash-flow impact is zero. The balances of my investments, however, change with both market movements and the addition of dividends.

No other interventions are needed.

Does that help?

My question is how to categorize them. I have left them all uncategorized because it’s for an investment account, so those funds are not used for my monthly income budget.

Got it. My approach is to use a category called, “Investment Transactions.” I marked these as hidden in the category sheet to keep their activity from appearing in reports. Their impact, however, remains tallied in the accounts’ balance updates.

Will that work?

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