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Make Your Cash Worth More

Banking tips to help you cash in

One of the side benefits of inflation is that banks are finally beginning to pay interest on your savings. Here are some ideas to help you make the most of your banked cash:

  • Make Your Cash Worth More imageUnderstand your bank accounts.
    •  Not all bank accounts are created equal. Interest rates, monthly fees, minimum balances, direct deposit requirements, access to ATMs, other fees and customer service all vary from bank to bank and need to be considered. Start by digging into the details of your accounts. There may be some things you’ve been unnecessarily living with like ATM fees or monthly account charges. Once you have a handle on your current bank, conduct research on what other banks have to offer.
  • Know your interest rates. 
    • As a general rule, the more liquid an account, the lower the interest rate. Checking accounts offer the lowest rates, followed by savings accounts, which yield lower rates than Certificates of Deposits. Maximizing your earnings is as simple as keeping your cash in accounts with higher interest rates. While the interest rate may not beat inflation, they can vary dramatically from bank to bank. So take a look around. There are quality banks paying 3% or more than many other banks for the same account type.
  • Make smart moves.
    • There are a couple of things to take into account when making transfers. First, federal law allows for only six transfers from savings and money market accounts per month. If you exceed this number, you’ll be hit with a penalty for each transaction that exceeds six transfers. Second, if you invest in longer-term investments like CDs or bonds, there are penalties for withdrawing funds before the maturity date. So make sure you can live without the funds for the duration of the term.
  • Develop Relationships with the right banks for you.
    • Every businesses in a growth mode should know at least 2-3 bankers. Know what banks specialize in your industry.  This can go along way with them understanding your business when it is time for a loan.  Just as all people don’t like the same food, all banks don’t have the same appetite or taste for the same businesses sizes or industry.  Learn the about the banks and what is important for them to approve your loan.
  • Stay diligent.
    • Putting together a cash plan is just the start. The key to success is to be persistent. Besides losing out on potential earnings, mismanaging your cash can result in hefty overdraft fees. The more attention you devote to your cash, the more your money will grow.
  • Know What is Required
    • Know how much cash you really need! Know how much cash your business needs on a daily, weekly, monthly, and annual basis. Just as important, every Small Business Owner needs to know how cash is needed for their personal/household expenses as well.  Knowing both of these allows for better projecting required revenue and expenses to determine the level of expected profits.  Knowing this will play a big part in determining how much to borrow for today and tomorrow.

If you need assistance with preparing for a loan…tax returns, business plan, or bookkeeping, give us a call at 832-303-3995 or schedule an appointment