What to do when the transferred amount across 2 accounts decreases due to bank transfer fee?

I hope I can describe my situation clearly. Here we go...

Every time I buy mutual fund, I transfer from the "Investment" category in the budget account to the tracking account. Every time I sell it, I transfer it back to "To Be Budgeted" category in the budget account.

Buying is easy. Selling, however, incurs a small amount of bank transfer fee, causing the amount transferred from the tracking account decreases by the time it arrives at the budget account. Let's say I sell IDR 100,000 out of IDR 2,000,000 mutual fund I own. From tracking account I transfer IDR 100,000 so the balance becomes IDR 1,900,000. At budget account IDR 100,000 arrives, right? In reality, however, I receive IDR 96,500.

What's the best way to deal with the IDR 3,500 bank transfer fee so that my budget account accurately reflects my bank balance?

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  • I just tested this in a fake budget, but you might want to play around with it before you do it:

    In the checking account, create a split transaction with +96,500 into TBB

    Split 1: -3,500, category “bank fees”

    add a transfer

    Split 2: +100,000 transfer: investment account

    You have to do it from the on-budget account because otherwise you can’t add a category.

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    • Tomato Tamale Now I don’t think that’s quite right, because you end up having to budget for the (already paid) bank fees.

      Probably you would want to do just the net transfer from the investment to the checking account, and then separately add a fee transaction to the investment account to adjust the balance in it.

      Reply Like 2
  • Yeah, if it were me I would just record the net amount in.  The fee is basically money already spent off-budget.  If this is an expense you want to track on-budget the account should probably be on-budget as well  :(.  

    But I've done some pretty crafty splits in the past so maybe there IS a way to do it... if so someone will figure it out.

    Reply Like 1
  • I would enter a transaction in the tracking account for the fee (no category) and a transfer in the actual amount that arrives in the on-budget account.

    But....if you want to do it with a split, you can enter the inflow and fee in a split:  topline of the split is the net inflow. First split, the gross transfer, second split the bank fees.  Both splits categorized to Inflow: TBB.

     

    Reply Like 2
      • Dian Ara
      • heydian
      • 2 mths ago
      • Reported - view

      HappyDance Thank you for the advice. I tried the split trick, and it seemed fine on the budget account, but the bank fee wasn't reflected accurately on the tracking account. Following your example, the balance on tracking account was reduced by 9,900 instead of by 10,000. I think I'll follow your (and Tomato Tamale 's and Annieland 's)  first advice, transferring the actual amount that arrives at the budget account. Thank you, everyone! Problem solved!

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  • 2 mths agoLast active
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