It’s not mandatory for every business owner to open a business savings account. However, it is always a good idea to open one. It could prove to be helpful for your business during unexpected times. All you have to do is specifically mention it while opening a new account with your bank. Such an account can provide you with an extra cushion of cash that will help you deal with certain out-of-the-blue expenses.
This applies to all kinds of business owners, entrepreneurs, sole proprietors, and freelancers. Even if you don’t operate a business right now, it doesn’t matter. It’s still best to grab this piece of useful information.
If you’re running or looking to run a business, then you need to optimize your finances as much as possible. It’s always good to have extra money for your business so that you can address any type of situation that comes up.
Let’s cover some basics.
What Exactly Is A Business Savings Account
You must already have a personal savings account. Business savings accounts are conceptually the same thing, except it’s obviously meant to help run your business. With this account, you will still be able to store cash and still make deposits, withdrawals, and transfers as required.
So that all makes sense. Now, what are the benefits of opening a business savings account?
Ask For A Business Savings Account Specifically
While opening a new business account, the employee may or may not ask you if you’d like to open a checking and savings account. They generally, by default, open a checking account. Often business owners don’t realize this and think they signed up for both checking and savings accounts.
You must specifically ask for a savings account while opening accounts for your business. Business savings accounts can have better interest rates depending on your bank. You must get roughly up to 1.3 percent for the first year. Your principal amount will get compounded and the new amount reflected in your account every month will include the compound interest.
Benefits of A Business Savings Account
When you run a business such as high-ticket drop shipping or an eCommerce website, you should know you can prudently accumulate extra dollars per year in interest just by having a savings account.
If you’re already a business owner, you must know that sometimes suppliers won’t bill you till later. It really depends, but you know, sometimes you have extra cash in your account that you’re not going to be using to pay your credit card.
You may want to hold it for later, but you can transfer it to your business savings account and still make extra money via interest. It’s a nice little bonus you don’t want to miss out on. So ensure you have a business savings and checking account.
Saving money is never easy. Many small business owners essentially live hand to mouth. However, a change in mindset to include savings as part of a business’s budget is one great way to ensure that you’ll be able to control your business finances more efficiently.
Make sure you open your business savings account with banks that offer the best technology base rather than opting for cheaper fees. Doing so will ease banking operations as well as offer you better security from banking errors or cyber fraud. Also, the more you do business with community banks the more beneficial it is for both parties in the coming years. With recent technological advancements, growing public support, and ICBA’s advocacy process, community banks are looking to catch up with bigger banks.