Note: This post was originally published on OPEN Forum.Growing your small business’s money in a savings account isn’t as quick and easy as it used to be. Unfortunately the options don’t offer the same ease and confidence they did a few years ago.
In today’s market, safety and speed are critical when choosing the right place to put your money. Here’s what you should look for to get the best of the lot:
Look online. Some of the better savings accounts can be found online. Cast aside any fears of online banking and recognise that these days, the online experience is as safe as the in-person bank visit. Online banking offers the same services with even higher interest rates. Many don’t require a minimum balance either.
Protect your money. Putting your money into a savings account is a safe move. A good savings account insures up to $250,000 under FDIC.
Seek out competitive interest rates. You want liquidity and a higher interest rate so a savings account makes sense. Letting your money just sit there when you aren’t using it or investing it is easy and rewarding. Receiving a rate of return on the dough in your savings account brings in more than if you just stash it in a shoebox.
Decide how quickly you need your money. Banks offer different limits and transfer times. Choose one that accommodates your needs.
Choose accounts with amenities. Excellent interest rates are obviously what you are looking for. But once that’s squared away, you want to look at what else your bank can offer you to make your banking experience a one-stop, uncomplicated relationship. Many banks and credit unions offer add-on benefits. Look for perks like free or discounted safety deposit boxes, free payroll processing and for the culturally curious: free admission to museums or discount tickets to theme parks.
Be wary of freebies and fees. Nothing involving a bank is free. The bank is a business selling a product just like you. Be wary of promotions like no maintenance fees and monthly service charges – they often last for a limited time. Get all the details, limits and read the fine print before opening an account.
Think big. Big online banks can provide excellent savings. ING Direct Orange Savings Account and HSBC Online Savings Account are great options (although their rates aren’t terribly impressive lately). Consider Capital One InterestPlus. It earns 1.6 per cent with a quarterly bonus of 10 per cent of the interest earned in the previous quarter.
Investigate high yield savings accounts. Savings accounts with high annual percentage yields are ideal. That means you have to stay on top of things and be fiscally responsible though. Scoring a high yield savings account may require you to keep a high balance over a period of time, limit transactions, and maintain more than one account. Research the high yield savings account offered at the banks you check out.
Consider a hybrid account. That way you can pay your bills like you would with a checking account but you can also earn interest like it’s a savings account. A perfect example of this is the CapitalOne High Yield Money Market Account.
Do further research on Deposit Accounts. The site is an easy and fast way to find the best rates available. Deposit Accounts monitor over 25,000 rates from nationwide and local banks, and then sums up the data translating it into tables that can be sorted and filtered. There are bank, product, and user reviews too.
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