How Do I Set Up a Mutual Fund Account?

By: Stephen L. Nelson, CPA

Before you can begin keeping records for a mutual fund investment using Money, you need to first set up a mutual fund investment account. To do this, take the following steps:

1. Display the list of accounts.

Click the Investing link at the top of the screen, and then select Investing Center. Money displays the Manage Your Investments And Savings window.

2. Tell Money you want to set up a new account.

To set up a new account, click the Create A New Investment Account link.
When you do this, Money starts the new account setup process and displays the first New Account dialog box.

3. Name the financial institution that holds the mutual fund investment.

Identify the mutual fund company by typing the company's name in the box or selecting the name from the list box. Click the Next button to continue. Money may display a list of financial institution names similar to the one you entered. If you see the full name of the financial institution listed, click it to select it. Then click the Next button again.

4. Tell Money you are setting up an investment account.

When Money displays the second New Account dialog box, select Investment from the list box . Click the Next button.

NOTE Some financial institutions provide an online account setup feature that Money can use to set up your account. If this is the case with the financial institution that you've selected, Money tells you so and provides instructions about how to complete the online account setup process.

5. Identify the account name and currency.

When Money displays the third New Account dialog box, enter a name for the
account in the Name box. This is the name you will use in Money
to refer to the account. Also confirm that the Currency box shows the correct
currency for the account. Money assumes the investment account currency is your default, or main, currency.

Money also asks about the taxation of the investment account. Click one of the What's The Tax Status option buttons to indicate whether the investment account is taxable or tax deferred.

6. Describe the investments you have already made.

When Money asks whether you want to add investments to the account, click the Yes, I'll Add Investments Now option button . Then click the Next

7. Name the investment.

Type the mutual fund name in the Investment Name list box . For
example, if the name of the mutual fund is Index 500, you might choose this as the mutual fund's investment name. Then click the Next button.

8. Identify the investment as a mutual fund.

When Money asks what type of an investment you are adding to the account,
select Mutual Fund. Then click the Next button.

9. Describe the new mutual fund.

Use the New Mutual Fund dialog box to more fully describe the mutual fund
investment . Enter the mutual fund's name in the Name box. If
you know the symbol for the mutual fund, enter it in the Symbol box. (You don't have to record the mutual fund symbol here, but doing so lets you retrieve updated share price information over the Internet.) Select a country from the Country list box to describe where the mutual fund invests. If you indicate a European country, use the Euro check box to specify whether the mutual fund's currency uses the new euro. Finally, select the Status check box if the mutual fund investment income is exempt from taxation. (Mutual funds that exist in bonds issued by state and local government agencies are often exempt from federal income taxes.) When you finish describing the new mutual fund, click the Finish button.

10. Describe each of the investments you have made in the mutual fund.

Describe each of the investments you have made in the mutual fund using the New Investment dialog box . To describe an investment, enter the
number of shares purchased and the investment purchase date in the Date Acquired box. Enter the price per share you paid in the Price box. If you paid a commission or fee to purchase the investment, record this amount in the Commission/Fee box.

After describing your first purchase of a mutual fund, click the Next button. Money then asks whether you want to add another investment to the account. Typically, you will. If so, click the Yes option button and then click the Next
button. Money then asks you to name the investment for which you want to record a purchase using the dialog box . This time Money lists the
mutual fund name in the Investment Fund list box. Select the mutual fund from the Investment Fund list box, and then click the Next button. Money then redisplays the New Investment dialog box . Use it to record subsequent
purchases of the mutual fund. Then click the Next button.

NOTE You need to describe each investment purchase you make separately. This means you will actually need to record several, perhaps numerous investments into the mutual fund. For example, the first money you invested is a purchase. So it needs to be described separately using the New Investment dialog box. In addition, if you have chosen to reinvest quarterly distributions from the mutual fund, each of these quarterly reinvestments is a separate purchase. This means, unfortunately, that if you have had a mutual fund for several years and you have been reinvesting, you may have dozens of investments to record. You do need to record these investments. The reason is that for tax purposes each of these investments needs to be separately tracked
in order to most accurately calculate any future capital gains or losses.

11. Tell Money when you are finished describing investments.

After you describe all the investment purchases for the mutual fund investment account, click the No option button when Money displays the dialog box. Money then displays a final New Account dialog box that tells you
you're finished. To complete the process, simply click the Finish button. At this
point, you have set up the investment account and you have recorded the investment purchases made to date.


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