What are the best deposit options for small businesses?

As a small business owner, you want to make the most of your money and avoid unnecessary fees and risks. Choosing the right deposit option for your business can help you manage your cash flow, save for future expenses, and earn some interest. But with so many options available, how do you decide which one is best for your needs? In this article, we will compare some of the most common deposit options for small businesses and explain their pros and cons.

1 Checking accounts

A checking account is a basic deposit option that allows you to access your money easily and pay for your everyday expenses. You can use a debit card, checks, online banking, or mobile apps to make transactions. A checking account is convenient and flexible, but it usually offers low or no interest and may charge fees for maintenance, overdraft, or ATM usage. You should look for a checking account that has low or waived fees, a high transaction limit, and a good customer service. A checking account is best for your daily operations and short-term needs.

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2 Savings accounts

A savings account is a deposit option that pays you interest on your balance and helps you save for your goals. You can transfer money from your checking account to your savings account and withdraw it when you need it. A savings account is safe and simple, but it usually has a lower interest rate than other options and may limit the number of withdrawals you can make per month. You should look for a savings account that has a high interest rate, a low minimum balance, and no fees. A savings account is best for your emergency fund and medium-term needs.

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Anjali Goyal

Chief Revenue Officer (CRO) | Revenue Strategy | Business Development | Sales Leadership | IAPL Institute
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One of the most popular options is a fixed deposit. A fixed deposit is a type of savings account where you deposit money for a decided period with an already fixed interest rate. Fixed deposits are offered by all the significant banks and money-related foundations. In this plan, you can contribute a particular amount, and on the amount contributed, you will get a fixed interest. Investing in a fixed deposit means you cannot withdraw your money invested before the maturity period. People who choose to put their funds into fixed deposits should pick a term between 7 days to 10 years. And the tenure you choose will pre-determine your interest rate.

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3 Money market accounts

A money market account is a deposit option that combines some features of a checking account and a savings account. It pays you interest on your balance and allows you to write checks or use a debit card, but it may also require a higher minimum balance and limit the number of transactions you can make per month. A money market account is flexible and rewarding, but it may have higher fees than a checking account or a savings account and may not be insured by the FDIC. You should look for a money market account that has a competitive interest rate, a reasonable minimum balance, and FDIC insurance. A money market account is best for your surplus cash and long-term needs.

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Anjali Goyal

Chief Revenue Officer (CRO) | Revenue Strategy | Business Development | Sales Leadership | IAPL Institute
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A money market account (MMA) is a type of interest-bearing deposit account offered by banks, thrifts, and credit unions. It is a hybrid account that combines the features of both savings and checking accounts . MMAs generally pay higher interest rates than traditional savings accounts and can be accessed through checks and debit cards . However, they may come with restrictions that make them less flexible than a regular checking account. MMAs are suited for individuals who want to earn more interest than they would with a savings account with short-term goals in mind.

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4 Certificates of deposit

A certificate of deposit (CD) is a deposit option that locks your money for a fixed period of time and pays you a fixed interest rate. You can choose the term of your CD, from a few months to a few years, and the longer the term, the higher the interest rate. A CD is secure and predictable, but it also has a penalty for early withdrawal and may not keep up with inflation. You should look for a CD that has a high interest rate, a low minimum deposit, and a flexible term. A CD is best for your specific goals and time horizon.

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5 Business credit cards

A business credit card is not exactly a deposit option, but it can help you manage your cash flow and earn rewards. You can use a business credit card to pay for your expenses and defer the payment until the due date. You can also earn cash back, points, or miles on your purchases and redeem them for discounts, travel, or other benefits. A business credit card is convenient and lucrative, but it also has a high interest rate, fees, and risks. You should look for a business credit card that has a low APR, a high credit limit, and a generous rewards program. A business credit card is best for your short-term financing and spending needs.

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Anjali Goyal

Chief Revenue Officer (CRO) | Revenue Strategy | Business Development | Sales Leadership | IAPL Institute
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Business credit cards in India is one of the most popular options is a business credit card from Banks. Banks offers a range of business credit cards for proprietors, partners, directors, and employees of SMEs and the self-employed segment. These cards come with interest-free credit periods, online expense tracking, and cashless purchases.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What are the best deposit options for small businesses?

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1 Checking accounts

2 Savings accounts

3 Money market accounts

4 Certificates of deposit

5 Business credit cards

6 Here’s what else to consider

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