Accumulated fund is the fund that is accumulated over time by non-profit organizations such as NGOs and other such organizations. Accumulated fund is not used to by operational or other expenditures as this fund is beyond all these expenses. Accumulated fund in actual is the amount of money that is placed by non-profitable organizations such as societies, NGOs and social clubs into an account that bears interest over the accumulated money. The money is placed in an interest bearing account so that it can accumulate interest based profit that will result in the increase in the fund reservoir of the organization. The profit gained over accumulated fund over time is used to fulfill certain operations of the organizations and the actual amount of accumulated fund is kept reserved or is used in some rainy season when there is no other source of money.
Most of the organizations maintain accumulated fund accounts in the form of savings accounts so that no penalties or other charges need to be paid if they withdraw funds at the time of some sudden need. Although the type of account of accumulated fund is savings however the balance presented is always current.
It is important for the financial health of an organization to maintain an accumulated fund to have some amount of cash in hands when it is urgently required. The funds in accumulated account can be used to purchase assets for the non-profit organization or it can be also used to purchase capital from third party when it is required.
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