If you are one of those who run a business, you would definitely know that it’s a challenging task to handle and manage your business.
You are required to do a lot of things at the same time to make sure that your business is in perfect shape and order.
You have to meet the demands of your customers, then you have to streamline your staff so that they perform at their best and then there are hundred other things that you have to keep your eye on constantly in order to run your business smoothly. Whether you run a floral shop, or own a small or medium scale enterprise, you have to manage all the tasks perfectly to make sure that your business is delivering its best.
One such important aspect related to business management is cash-flow.
You want to manage the cash-flow so that you are able to meet the various demands of your business timely.
Moreover, you would never want to waste your business cash.
One of the perfect ways to manage your business cash-flow is by opening up a business savings account.
So if your business injects excess cash that is not needed in day to day operations, then the best way to manage it is by having a business savings account.
Usually, most of the businesses have a current account to manage their cash-flow, but it is not the best way to handle excess finance. Your cash is idle in a current account and earns no interest. By having cash in your business saving account you ensure that your money is working for you and earning a decent interest.
Now after knowing that business savings account is the best and the most efficient way to manage your business cash-flow you will surely be interested in business savings account.
So what exactly is a business savings account?
Business savings account is nothing but a specialized savings account designed to meet your business needs and requirements. Like any other savings account, you get interest on the money you hold in your business savings account. You can directly link your business savings account to your current account so that you can transfer excess funds easily and quickly to your business savings account.
If you are interested in business savings account, the next step comes in choosing the most appropriate business savings account. In fact, there are various types of business savings account and so you can pick the most suitable one that fulfills your business requirements.
Here, we list down the most popular types of business savings account.
Instant or easy access accounts – It is simplest and straightforward business account. Although ideal for businesses which have fast moving cash flow, they offer low rate of interest when compared to other types of business savings account.
Notice Accounts – By opening notice accounts you earn a higher rate of interest on your deposits. However, you have to give prior notice when you want to withdraw money from such accounts.
Fixed rate Accounts – Such business savings accounts pay the best rate of interest, but you need to lock your money in fixed rate accounts. You need to choose your investment period which can range anywhere from overnight to one year and get to earn a fixed interest on your deposit.
Partial Withdrawal Fixed Rate Account – In this type of business savings account, you earn a fixed rate of interest on a 12 month deposit term plus you get the benefit of withdrawing upto 20% of your funds held in these types of accounts.
Now, after knowing what is a business savings accounts and its types, it’s would be appropriate to know its benefit.
So let’s come up with the benefits of having a business savings account:
The biggest benefit of having a business saving account is the fact that you earn a decent rate of interest on the money that you hold in your business saving account. It is always beneficial to earn some interest on your (business) money than to leave it in a business current account which pays no interest at all.
Then by having a business savings account you are able to keep your savings separate from operational cash. This enables to organize your funds in an efficient way. Also, in times of economic uncertainty, you are always wary of spending money. In such times, putting your money in a business savings account guarantees you safety and you also get a good rate of return on your money.
Having said that, you should also know that business saving accounts levy various charges and fees for accessing your money including transaction costs in the form of receiving payments or withdrawals. You are also required to maintain minimum deposits in business savings account. So you should research a bit and find a suitable business account in which free business banking is available.
On the whole, business savings account is a must if you want to manage your business cash-flow. Moreover, your excess funds are kept safe in a business savings account, and you also earn interest rather than keeping money idle in a business current account.