If you run a business or make financial decisions for your company, you may hear the term ‘business savings account’ and wonder if it is for you. There are many things to consider when making that decision.
First, to understand what a business savings account is, it’s essentially a place where businesses can store money during times where they have a comfortable amount of cash on hand.
Storing these funds in a business savings account can provide many opportunities, such as bearing interest, just like a personal savings account that most people are familiar with. They also provide safety and security, and many are insured so that the underlying government will guarantee your funds, something that is very important in these volatile economic times.
Access to your money is another key feature of business savings accounts. A sudden need for your funds, possibly arising from a solid business opportunity, can make it so that you need your money in an instant. Instead of having it tied up in a CD or other investment which can take time to access, a business savings account can provide access to your funds in a quick and simple fashion.
Many institutions have a business savings account option in addition to other types of business accounts, such as checking accounts and the like. Using one financial institution can provide an opportunity to easily transfer money within the same financial institution, allowing for even greater flexibility.
If you own your business or are in charge of your company’s financial decisions, it’s more important than ever to make sure that the money for your business is working for you in the most effective means possible. Learning more about the opportunities available to your company is critical and can be the difference between your company moving forward or watching a competitor move forward instead.
I have a business savings account set up with my business checking. I try and keep most of my funds in there and then just make a transfer each month for payroll.
I would say that a savings account for the business is a very good idea for a variety of reasons which you have set out quite rightly. I think most don’t really think in terms of allowing a business to keep separate cash with all the daily cut and thrust of running a business day to day. What your post establishes is that you can build cash without it being inaccessible when you need it.
Just to add to this, it brought to mind something I was told when working in the Far East. I’m not sure how accurate what I was told is, but it sounded good to me and I always had it in mind since. I was told that part of Chinese business culture is to only spend 10% of what you earn.
It probably sounds easier said than done, but if you think about it then it is achievable. Having a buildup of capital means you can grow, deviate and be flexible. It’s always wise to be prepared for any opportunity that comes along, and then you’re in a position to take advantage. Just by having a savings account for your business focuses you on that goal and you can set targets.
I would certainly open a business savings account if I had my own company. Liquidity is key to any business’ operations and having accessible money really helps :0)
We do have a business savings account that we put money into for quartely tax payments or employee bonuses.By taking it out of the main account, it is less likely to be spent, much the same as with personal accounts.
I’ve opened a couple business credit cards but haven’t opened a savings account yet. I think it’s more hassle than it’s worth when your business is small, but once it starts to grow it can definitely come in handy.
I think a business savings account is a must and any organisation should have one! I am in charge of our business savings account and I find it so beneficial to us. I agree with the comment; liquidity is key to any business and it is very handy to have accessible money.
Not only am I in charge of this but also come up with ideas to save money and recently managed to cut costs of phone calls with hosted VoIP telecommunications software. Savings is key to a business success!