There is a need to study prospective memory (PM) and its relationship with aspects of frontal lobe functioning in schizophrenia and bipolar disorder. The study aims to investigate event-based (EB) and time-based (TB) PM functioning in the two groups, and its association with working memory, planning, and attention. A word categorisation task was developed to assess PM functioning among 90 participants (schizophrenia, bipolar disorder, and a control group). Frontal lobe functioning was assessed using Tower of London, N-Back test, and triads test. Mean comparisons revealed significantly higher impairment in TB PM in comparison to EB PM in both the clinical groups. Significant relationship between PM and frontal lobe impairment was found. Relationship between PM and frontal lobe deficits in the clinical groups emphasises the need to include its assessment at an early stage and to develop PM rehabilitation strategies to improve the quality of living.