Having a personal savings account is extremely important in case of emergencies, to plan head, and to make wise use of your income. Small businesses can also benefit from savings thanks to business savings accounts. If you’re wondering how business banking services can help you manage your money better, here’s what you need to know.
Do You Need a Business Savings Account?
Small business who have acquired more cash than they are able to spend should consider a business savings account. Instead of letting the money sit idly, you can earn interest on those funds and have savings put aside in case of a bad month or an emergency situation.
Benefits of Opening a Business Savings Account
Opening a business savings account gives you financial security and peace of mind. Knowing your money is in a safe place, away from your immediate use, and earning interest can help you feel at ease in times of emergency or when business is slow. Here are a few ways a business savings account can help you.
Firstly, savings accounts pay interest, which means you can earn more money for having a large sum stored in a savings account rather than a checking account.
Incentive to Save
Having a business savings account encourages you to save your money. Some banks have monthly limits on the amount of free withdrawals and transfers you can make from savings accounts. This built-in incentive encourages business owners to save money.
Backup for Major Purchases
If your company requires the purchase of special equipment, tools, or materials, a savings account allows you to put money aside for that purchase. It is recommended to use your immediate cash or checking account to pay for immediate and short-term obligations, and have a savings account for long-term purchases. Budgeting is paramount to your success as a business owner, and savings accounts are absolutely necessary.
Types of Business Saving Accounts
The three main types of savings accounts are money market accounts, certificates of deposit (CD), and sweep savings accounts.
Money Market Accounts
Money market accounts are similar to savings accounts, but there is a higher opening deposit and minimum balance required to activate it. Additionally, you can earn a slightly higher interest rate.
Certificates of Deposit (CD)
With a CD, you can deposit money into your account for a specific period of time, thus earning you a higher interest rate. If you remove the funds before the period, your bank will charge you a penalty.
Business Saving Account at LUSO Federal Credit Union
LUSO Federal Credit Union is a not-for-profit, member-owned financial cooperative dedicated to providing members with quality financial services and products. We provide our customers with our “Better Business” statement share account. It requires a minimum deposit of only $5.00, and you can benefit from our 0.10% interest rate on your deposits.
We at LUSO pride ourselves on serving the financial needs of our members and helping them manage their finances such as credit card debt. Our services and rates, which include business finance solutions, are available in Wilbraham and Ludlow, Massachusetts. Contact us at 1-(844) 587-6328 for inquiries about business savings accounts in Ludlow, or call our Wilbraham branch at 1-(800) 808-5876 to learn more.