If you’re a business owner, chances are that you already have a business checking account. Opening a checking account is one of the first things you should do when starting a new business. Then, once your business starts to consistently make money and has excess cash flow, you should open a business savings account as well. If you have a substantial amount of cash on hand to open your business savings account, you might consider opening a business money market account instead. A business money market account is very similar to a business savings account but typically has a higher minimum balance requirement and offers a higher interest rate. Many business money market accounts also have rate tiers that allow you to earn a higher return on larger balances. In many cases, business money market accounts also come with debit cards and check-writing abilities, making them a sort of hybrid between a checking and savings account.
No matter which type of account you choose, having a dedicated bank account for your business’ savings needs can help your business succeed. Let’s look at some of the benefits a business savings account or a business money market account can provide:
Benefits of a Business Money Market Account or a Business Savings Account
Opening a business money market account or a business savings account can allow you to:
No matter which type of account you choose, having a dedicated bank account for your business’ savings needs can help your business succeed. Let’s look at some of the benefits a business savings account or a business money market account can provide:
Benefits of a Business Money Market Account or a Business Savings Account
Opening a business money market account or a business savings account can allow you to:
- Grow Your Money. Most business money market accounts and business savings accounts earn interest. This can help your savings grow over time. As you continue to add funds to your account and accrue interest on your growing balance, you can be well on your way to building a nice nest egg for your business.
- Plan for Emergencies. A business savings account or money market account allows you to save for the unexpected. You can use it to build an emergency fund for your business so you can cover things like equipment repairs, cash flow issues, or increased supply costs. Having cash on hand to deal with unforeseen issues will save you from having to scramble for last-minute financing or having to rely on a business credit card.
- Save for Taxes. Tax time can be a major headache for businesses, and sometimes business owners are blindsided by a hefty tax bill. With a business savings account or business money market account you can regularly put money aside, so you have it when your business taxes are due. This can help to reduce your stress and anxiety throughout the year.
- Expand Your Business. There will likely come a time when you consider expanding your business. While business growth goals will look different for every business owner, they could include opening more locations, expanding your offerings, hiring more employees, or purchasing new equipment – and all of these things require money. While a business loan or line of credit might be necessary to achieve some of your larger growth goals, having cash saved up to use for collateral, a down payment, or loan processing fees will make the business financing process much smoother.
- Keep Your Money Safe. One of the major benefits of business money market accounts and business savings accounts is that they provide insurance on your funds. Deposits made into these accounts at FDIC-member banks are protected up to $250,000 per bank. And some banks, like BankFive, offer additional insurance protection, beyond FDIC limits. Through the Depositors Insurance Fund (DIF), all BankFive business deposit accounts are protected in full, regardless of the account balance.
- Quickly Access Your Funds. It’s not smart to have all of your business’ worth tied up in investments. A business money market account or a business savings account provides you with liquid assets that you can tap into as needed. Having easy access to your funds can help you navigate cash flow issues, cover unexpected costs, and take advantage of growth opportunities as they arise.