Money market accounts are increasingly popular accounts among businesses. They provide better security and higher yields than most other accounts and are attractive savings instruments for businesses of all sizes. From small businesses to large multinationals, businesses can use a money market account to save and invest. Here’s a complete guide to understanding business money market accounts and how to make the most of them.
What Is a Business Money Market Account?
A business money market account is a type of savings account offered at most banks and credit unions. It typically offers higher interest rates than a regular savings account, but with restrictions on withdrawals and transfers. A business money market account earns interest on the balance, just like a regular savings account, but can provide higher yields.
Benefits of a Business Money Market Account
A business money market account provides a number of advantages for businesses of all sizes. Here are some of the main benefits of a business money market account:
• High yields: Business money market accounts usually offer higher yields than other types of savings or investment accounts. For example, some online savings accounts offer yields that are much higher than standard savings accounts.
• Liquidity: Business money market accounts are easily accessible and offer convenient withdrawal and transfer options. This makes them a great choice for businesses who need access to their money quickly.
• Safety: Business money market accounts are generally more secure than other investment accounts. They are insured by the FDIC or NCUA, so businesses can rest assured that their money is safe.
• Flexibility: As a business money market account is really just a savings account, businesses can easily switch between banks or transfer their money to other investment vehicles.
• Low fees: Most business money market accounts have no minimum balance requirements or monthly fees.
How to Choose the Right Business Money Market Account
When selecting the right business money market account, businesses should consider factors such as the interest rate, minimum balance requirement, fees, access to funds, and customer service. Here’s a closer look:
• Interest rate: The interest rate is usually the most important factor to consider when selecting a business money market account. Businesses should compare yields from different banks to ensure they are maximising their returns.
• Minimum balance requirement: Many business money market accounts have a minimum balance requirement. This means the business will be required to keep a certain amount in the account at all times. This requirement is not always a bad thing – it may help businesses from withdrawing funds too quickly.
• Fees: Many business money market accounts have no fees, but some may charge for certain services such as check writing or transfers. Businesses should check the fee schedule to make sure they are not paying too much for the services they need.
• Access to funds: Businesses should also consider the accessibility of the account. Some money market accounts may limit the number of times businesses can withdraw or transfer their funds.
• Customer service: Finally, businesses should consider the customer service offered by the bank or credit union they choose. Most banks offer 24/7 customer service, so make sure to find one that best meets your business’s needs.
How to Get the Most From a Business Money Market Account
Once a business has chosen the right money market account, there are still a few steps to ensuring they maximize their returns. Here’s how to get the most from a business money market account:
• Set up automatic deposits: Businesses should make use of the automatic deposit feature offered by most banks. By setting up regular deposits from the business’s checking account, businesses can ensure their money market account balance is always growing.
• Increase the balance: Businesses should strive to increase the balance as much as possible. A higher balance will lead to a higher yield.
• Take advantage of bonuses: Many banks offer bonuses for businesses that open money market accounts. Make sure to take advantage of these offers to receive an extra boost in returns.
• Stay in the account: The longer the business keeps their money in the account, the higher their yield. Businesses should try to keep the money in the account for as long as possible.
Business money market accounts are a great savings vehicle for businesses of all sizes. They provide higher yields than regular savings accounts and offer convenient withdrawal and transfer options. With just a few steps, businesses can ensure they’re getting the most from their accounts. By choosing the right account and maximizing returns, businesses will be well on their way to achieving their savings goals.
