diff --git a/src/tests/test_seed_generation.py b/src/tests/test_seed_generation.py
new file mode 100644
index 0000000..d8bd2a8
--- /dev/null
+++ b/src/tests/test_seed_generation.py
@@ -0,0 +1,41 @@
+import sys
+import importlib
+from pathlib import Path
+from tempfile import TemporaryDirectory
+from unittest.mock import patch
+
+sys.path.append(str(Path(__file__).resolve().parents[1]))
+
+
+def setup_password_manager():
+    """Instantiate PasswordManager using a temporary APP_DIR without running __init__."""
+    import constants
+    import password_manager.manager as manager_module
+
+    # Reload modules so constants use the mocked home directory
+    importlib.reload(constants)
+    importlib.reload(manager_module)
+
+    pm = manager_module.PasswordManager.__new__(manager_module.PasswordManager)
+    pm.fingerprint_manager = manager_module.FingerprintManager(constants.APP_DIR)
+    pm.current_fingerprint = None
+    pm.save_and_encrypt_seed = lambda seed, fingerprint_dir: None
+    return pm, constants
+
+
+def test_generate_bip85_and_new_seed(monkeypatch):
+    with TemporaryDirectory() as tmpdir:
+        tmp_path = Path(tmpdir)
+        monkeypatch.setattr(Path, "home", lambda: tmp_path)
+
+        pm, const = setup_password_manager()
+
+        mnemonic = pm.generate_bip85_seed()
+        assert len(mnemonic.split()) == 12
+
+        with patch("password_manager.manager.confirm_action", return_value=True):
+            fingerprint = pm.generate_new_seed()
+
+        expected_dir = const.APP_DIR / fingerprint
+        assert expected_dir.exists()
+        assert expected_dir.is_dir()