Having a bank for your business is a no-brainer. It saves you money and facilitates your transactions. Choosing the right type of bank account is thus critical in order to take advantage of all the options available to SMEs.
Before selecting an account, SMEs should consider fees, access to funds, withdrawal limits, savings interest, minimum deposits, services offered by the account and bank, online and e-commerce features, and bank location. Here are the various types of bank accounts to consider:
SMEs require funds to conduct day-to-day operations. A checking account provides this option, and depending on the bank, it may also include other features such as the ability to earn interest. Checking accounts can assist SMEs in receiving funds from clients both inside and outside of the country.
Savings Accounts and CDs
As your business grows in profitability, a savings account can be a good place to keep your profits and grow them by earning interest. This money can be invested in new equipment, expansion, recruitment, and acquisitions. SMEs can save money in high-interest accounts such as a certificate of deposit (CD), depending on how much they can put away and for how long.
It is vital to have a bank account that collects digital payments from your clients. These merchant accounts allow SMEs to collect and process payments in exchange for a monthly, annual, or per transaction fee. Digital accounts offer various perks and innovative solutions.
So you are doing great and the business is flying! You can put some money aside to invest in a brokerage account that will build a profitable portfolio on the side by investing in EFTs, mutual funds, currency markets, bonds, and shares.
Foreign Currency Accounts
It is also wise for exporters and importers to keep cash in foreign currency. This facilitates transactions and lowers the cost of moving money across borders. Foreign currency accounts can hold multiple currencies and even earn a profit.
Bank accounts separately protect private assets from business assets and give the individual protection against liability. They also make a clear distinction between business finances so that SMEs can better assess their progress.
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