Aim Numerous neuropsychological tests are implemented in the clinical setting. However, a readily available cognitive test is required to detect the risk of dementia in the community setting. Methods A total of 4151 persons aged ≥65 years participated in the present prospective cohort study. We assessed cognitive performance using the Mini‐Mental State Examination and the National Center for Geriatrics and Gerontology‐Functional Assessment Tool. The National Center for Geriatrics and Gerontology‐Functional Assessment Tool includes tests of story and word list memory, attention and executive function, processing speed, and visuospatial skill to screen for cognitive impairment. All measurements were transformed to Z‐scores to compare among the cognitive tests. The incidence of dementia was determined using data collected by the Japanese Health Insurance System over 36 months. Results After an average of 43 months, 180 (4.3%) participants were diagnosed with dementia. Survival analyses showed that the probability of dementia was significantly associated with all cognitive tests, except for visuospatial skill. The processing speed test showed the highest hazard ratios for the incidence of dementia (Z‐score: hazard ratio 0.61, 95% confidence interval 0.50–0.75, P < 0.01). In subgroup analysis, there were no significant relationships between cognitive tests and the incidence of dementia in participants without global cognitive impairment. Conclusions We conclude that the National Center for Geriatrics and Gerontology‐Functional Assessment Tool, as well as the Mini‐Mental State Examination, play an important role in detecting the risk of dementia in the community setting. Further analysis is required to identify the risk of dementia in older people without global cognitive impairment. Geriatr Gerontol Int 2017; ••: ••–••.