Author Topic: Best place to park $50k in my business account?  (Read 1427 times)

51cent

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Best place to park $50k in my business account?
« on: February 28, 2018, 02:57:47 PM »
I've built up approx. $50,000 in my business checking account and would like to make a little interest on it as well as get it out of the account that I write checks from in case of fraud.
Most of the great savings accounts I find that pay 1.5% give or take are for personal accounts only.  For ease of accounting I don't want to borrow it personally and pay it back to get that rate.
Vanguard prime money market couldn't help me either.
I found a local bank that is 1.05%, but every 6 months I have to sign back up to keep that rate
A 7 month cd at that same bank is 1.55% so I could possibly do that I guess, but money market or savings would be preferred.

Am I missing and great ideas?  Better rates out there?

Thanks!

Mighty-Dollar

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Re: Best place to park $50k in my business account?
« Reply #1 on: March 01, 2018, 08:10:18 PM »
I would avoid little privately owned banks. You don't want your CD to turn out to be some guy's Ponzi scheme like Stanford Financial Group, which actually had 50 offices.
https://en.wikipedia.org/wiki/Stanford_Financial_Group
If you want higher returns then you're just going to have to take more risk. The lowest risk bond/stock allocation from 1970 to 2010 was 28% stocks / 72% bonds. Here's the historical annual returns...
« Last Edit: March 01, 2018, 08:12:25 PM by Mighty-Dollar »

nara

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Re: Best place to park $50k in my business account?
« Reply #2 on: March 01, 2018, 08:21:58 PM »
Banks like Wells Fargo and Chase offer $200-$300 for opening up a business account with them. I believe the minimum is about $15k and you would need to keep the balance for 6 months. You can do much better than a high interest savings or CD if you open multiple accounts depositing just the minimum into each.

51cent

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Re: Best place to park $50k in my business account?
« Reply #3 on: March 05, 2018, 10:15:13 AM »
Great info Mighty.... I'll look into that as a possibility.
Thanks to you both

chasesfish

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Re: Best place to park $50k in my business account?
« Reply #4 on: March 05, 2018, 06:38:56 PM »
Is your business a C-Corp or an S-Corp?

What is the realistic need for the money in the next 6-12 months?

If it's an S-Corp/LLC, personally I would just withdraw the money, put it in a Fidelity Brokerage Account, then request check writing access and a margin line.  What you invest in is up to you, anywhere from their version of a savings account, to brokered CDs, or stock/bond funds.

You can get to half of the account balance immediately through writing a check and depositing it in your business account as a contribution to your company.  Sell the stocks/bonds/mutual funds and you can get to all the funds within a week.

There's no real impacts to taking the distribution unless you have to show net worth in the company to borrow money, but that's a different discussion I can help with.

Just some advice from the soon to be retired commercial banker..

Rubic

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Re: Best place to park $50k in my business account?
« Reply #5 on: March 06, 2018, 10:54:41 AM »
I have $40K parked in two checking accounts drawing 3% interest.

$15K at Lake Michigan Credit Union:  https://lmcu.org

Here are the criteria to qualify for the 3% rate in an LMCU Max Checking account:
  • Sign up for e-statements.
  • Minimum of 4 logins to online banking per month.
  • Minimum of 10 debit card purchases per month.
  • Direct deposit in your account at least once per month.
I have my LMCU account linked to Mint.com, which handles the minimal required logins.

On the first Monday of each month, I reload my Amazon gift balance
with ten purchases of $0.50 each for a total of $5.00 to satisfy my debit
card requirement.

I also transfer $5 each month from my primary checking account into LMCU via
an automated ACH transfer which counts as a direct deposit.

The entire process takes less than 10 minutes each month after you've
got your account set up.  LMCU has a nice link on your account page to
confirm you've met all the requirements to qualify for the 3% rate.

I also have an account at Old Missouri Bank, which has similar terms to
LMCU, but pays 3% interest up to $25K with 12 debit charges per month.