Making a fund Inactive moves the fund from the Active tab to the Inactive tab in Fund Maintenance.  All history for the fund is retained. Before creating a new fund you should check the Inactive tab to see if the fund just needs to be made Active again. 

A report called Fund Status information located in the Fund Raising section of the Report Library will tell you what funds that can be made inactive. If an Active fund has no contributions or the last contribution was more than 18 months ago, the fund should be made inactive.

Inactivating a fund will speed up your multi-batch data entries and help prevent recording a contribution against the wrong fund.