What are Fixed deposit ?
Fixed deposit is an investment instrument which allows investors to put their idle money into and turn it into guaranteed returns
Make a fixed deposit with the bank Rs 100000 Interest receivable Rs. 10000 per annum. Fixed Deposit mature after three years.
Journal Entry for the above willÂ
Fixed Deposit A/c | 100000 |
   To Bank A/c |      100000 |
(being fixed deposit made with tha bank | |
At the end of accounting year I year
We have to make entry of interest earned (Accrued Interest on FD)
Accrued Interest on FD A/c | 10.000 |
   To Interest on FD  A/c |      10,000 |
(being interest  fixed deposit | |
Similar entry in II year
Accrued Interest on FD A/c | 10,000 |
   To Interest on FD  A/c |      10,000 |
(being interest  fixed deposit | |
On maturity of Fixed deposit
Bank A/c Dr | 130,000 |
   To Interest on FD  A/c |      10,000 |
 To accrued interest on FD A/c |       20,000 |
 To Fixed Deposit A/c |       100,000 |
Ledger creation for Fixed Deposit in Tally Prime
- Go to the gateway of tally prime >Create > ledger In name Type: Fixed depositÂ
- Under: Fixed Deposit
- save the ledger / Ctrl+A
Similarly, create a ledger of BankÂ
Go to the gateway of tally >ledger>Create
- Type Name: Bank
- Under: Bank
- Type : Interest on FDÂ
- Under : Indirect IncomeÂ
Create ledger Accrued interest on FD - Type : Accrued Interest on FD
- Under :Current Asset
As shown in the picture bellow.
Go to gateway of tally >accounting voucher > F5 payment create entry of FD .
Fixed Depsit Account Dr 100000
  To Bank A/c              100000
(being Fixed deposit made with the bank)
Accrued Interest on Fd entry in Tally Pime.
Accrued Interest on FD is Current Asset means income earned but not received therefore it will be shown at end the accounting year .
Go to gateway of tally > accounting Voucher > F7
Accrued interest on FD A/c  10000
  To interest on FD A/c  10000
(being interest on FD earned but not receive)
Â
Simialry create entry in the next year /
On date of Maturity FD entry
Go to gateway of tally > accounting Voucher > F7
On maturity of Fixed deposit
Bank A/c Dr | 130,000 |
   To Interest on FD  A/c |      10,000 |
 To accrued interest on FD A/c |       20,000 |
 To Fixed Deposit A/c |       100,000 |