Transfers in Quicken for Mac
A transfer is a special transaction used when you are recording a transaction between two accounts you track in Quicken, or for any transaction that is not income nor expense but just the movement of money from one account to another. Some examples of transfer transactions include:
- Movement of funds between a checking account and a savings account
- Movement of funds between a checking account and a brokerage account
- A credit card payment (movement of funds from a checking account to a credit account)
- Cash advances from a credit card account to a checking account
- Loan payments from a checking account to a liability account that tracks the balance of the loan
Quicken considers a transfer to be neither an income nor an expense transaction. As such, transfers are excluded from Spending and Income reports and charts.
Consider moving money from Checking to Savings. You did not spend (you still have the cash), and you did not earn income (you have same Net Worth you had before the transfer). As such, these transactions are neither income nor expenses.
Two types of Transfers are supported in Quicken
You can use the special Transfer Category to record transfers, or you can do a Linked Transfer which actually creates a relationship between two transactions in separate accounts. Both methods have pros and cons. You can use the method that makes the most sense for you or even use both methods.
Using the Transfer Category
You will find a Transfer category in Quicken's category list. This special category is considered neither income nor expense. Transactions assigned to the Transfer category are excluded from income and expense reports and charts (because it records the movement of money between two accounts that belong to you.)
Assigning the Transfer category (or the Transfer subcategory "Credit Card Payment") does not create or imply a relationship between any other transactions in Quicken, such as transactions in a different account.
Appropriate uses of the Transfer category would include:
- Transactions that move money between two accounts that you track in Quicken (such as Checking to Savings). Just assign the Transfer category to both the outgoing checking transaction and incoming savings transaction. Assigning a specific account name is not required.
- Transactions that move money between an account you track in Quicken and an account you do not track in Quicken. For example, if you added your checking account to Quicken but did not add your savings account, using the Transfer category ensures that this transaction is still considered "neutral" (neither income nor expense) in reports and graphs.
- Transactions that move money between checking accounts and brokerage accounts.
- Credit Card Payments (there is a special Transfer subcategory just for credit card payments.
Inappropriate uses of the Transfer category might include:
- A transfer of money to a friend or relative as a gift.
- A transfer of money to a third party to pay a bill or expense.
- A transfer of money to you from a third party, such as direct deposit of your paycheck or payment for services of goods.
- In short, any account-to-account "transfer" in which you gain income or incur a real expense is probably best handled by the appropriate income or expense category -- not a transfer.
Using a Linked Transfer
A Linked Transfer creates a direct relationship between two transactions in different accounts tracked in Quicken.
Just like the Transfer Category, a Linked Transfer is considered neither income nor expense and is excluded by default from spending reports.
It's really two transactions
When you create a Linked Transfer in the source account (as described below) you simultaneously create a new transaction in the destination account.
For example, if you created a Linked Transfer in your Checking account for $100 and choose My Savings in the transfer column, you will find a deposit transaction for $100 in the My Savings register.
Note: If you download transactions and then create the Linked Transfer after you've download both accounts (e.g. the Checking and My Savings from the example above), the transaction in the destination account will still be created. This could result in unexpected duplicates. Review your source/destination accounts and manually match your Linked Transfer transaction (drag-and-drop the matching downloaded transaction onto the transfer) or delete the downloaded transaction.
If you primarily download transactions, you might try using the Transfer Category option (as it will not result in new transactions being created in this way).
Finally, since Quicken supports the categorization of a Linked Transfer, the special Transfer category is automatically applied to Linked Transfer transactions. This can be changed if needed (for unique cases when you might want to consider the transaction as income or expense). If you do change the category, then that transaction will be included in category-based reporting as appropriate.
To Create a Linked Transfer
- Select the source account from the Accounts section of the sidebar.
- Create a new transaction (Click the New icon in the register toolbar or press Command + N).
- Enter information about the transaction.
- Enter the name of the destination account in the Transfer column.
- Tell me moreIf you don't see the Transfer column: Click the Columns icon in the register toolbar (Control + click the column header) and turn on the transfer column.
- Tell me more
- Click Save or hit the Enter key to complete the transaction.
Handling Credit Card Payments
Credit Card Payments Transfers
Quicken considers a transfer to be neither an income nor an expense transaction. As such transfers are excluded from Spending and Income reports and charts.
Consider moving money from Checking to Savings. You did not spend (you still have the cash) and you did not earn income (you have the same Net Worth you had before the transfer.) As such, these transactions are neither income nor expenses.
The same logic applies to credit card payments (when you track your Credit Cards in Quicken, which is highly recommended). Your credit card account already contains a record of all your expenses (the credit card transactions). When you pay your credit card bill from your checking account, you do not want the entire payment amount to be considered an expense because this would cause you to double count your expenses.
For example: If you have $100 worth of charges on your credit card, which are tracked in Quicken using a credit card account, those transactions are already categorized as expenses and will show in Spending Reports and Charts (dining, entertainment, fuel, etc.).
If you then pay your bill in full with $100 from your checking account, you should consider this payment to be a transfer, not expense. Considering it an expense would incorrectly show you had $200 worth of spending. Instead you are transferring funds from a checking account to a liability account.
The exception to this rule is if you do not pay your credit card in full each month. In this case you are incurring an interest expense and should track the interest as an additional expense. If your financial institution includes your interest payment as a unique transaction within the downloaded transactions, you can just categorize that transaction as an expense. If the financial institution does not show the interest as a "transaction" (many do not), then you can split your credit payment -- with the interest portion assigned an expense category and the remaining payment assigned as a transfer.
Splits and Transfers
Transfers can be part of a split
A split transaction can include a transfer. It's handled just like any other split line item.
For example, you may want to transfer some of your paycheck into a retirement account. Or you might want to transfer the portion of your mortgage payment that goes toward the loan principal into a liability account that tracks the loan balance and assign an expense category to the interest portion of the payment. For these cases just create a split transaction and make one (or more) of the split lines a transfer by selecting the appropriate account from the Transfer column in the Split window.