Accrued Interest for Fixed Deposit in Odoo Accounting

Similar to the Asset Management and Deferred Expense (Prepayment), Excelroot has developed the Accrued Interest for Fixed Deposit in Odoo, to auto post the monthly journal entries for accrued interest.

Managing Fixed Deposits (FD) in your accounting system doesn't have to be complicated. This guide walks you through how our Fixed Deposit module helps you track your investments, automatically calculate interest, and generate all the necessary accounting entries.

Use Case: Fixed Deposit for 2 years @ 3% accrued interest rate

1) Initial Fixed Deposit

a) Fixed Deposit (Current Asset)    DR 100,000

     Bank Acct (Current Asset)           CR 100,000

2) Interest Accrued (Each month Interest 250 and for 24 months, 6,000)

a) Accrued Interest on FD (Current Asset   DR 250

    Interest on FD (Other Income) CR 250

3) At FD Maturity

a) Bank Acct     DR 106,000

Fixed Deposit     CR 100,000

Accrued Interest on FD     CR 6,000

Steps to Use Our Fixed Deposit Module:

Step 1: Create a Deposit Type (Template)

Go to Accounting → Configuration → Deposit Types and create a template with:

• Name (e.g., "Fixed Deposit 2 Years @ 3%")

• All four account configurations

• Interest rate and duration

This template saves you time when creating multiple FDs with similar terms.

Step 2: Create a Fixed Deposit

Go to Accounting → Management → Deposits and create a new deposit:

• Select your Deposit Type (accounts auto-populate)

• Enter the deposit name and amount

• Set the effective date

• Adjust interest rate or duration if different from template

Step 3: Compute Interest Schedule

Click "Compute Interest Schedule" to generate all 24 monthly accrual lines. Review the schedule in the Interest Accrual Board tab.

Step 4: Confirm the Deposit

Click "Confirm" to:

• Create the initial deposit journal entry

• Change status to "Running"

• Enable posting of interest accrual entries

Step 5: Post Monthly Interest

Each month, post the interest accrual entry by clicking the toggle in the Interest Accrual Board. You can also use the batch wizard to post multiple entries at once.

Once all 24 interest entries are posted, It will also create maturity entry to:

• Record the receipt of funds

• Clear the FD and accrued interest accounts

• Close the deposit record