How to Save for Your BusinessFriday, May 14, 2021
Owning your own business is exciting, but navigating the financial pieces can be challenging. Separating your business and personal expenses can help you manage your business finances and stay on track. Opening a business savings account can help you save for the future of your business.
What's the difference between a personal savings and business savings account?
Both accounts help you to save money for the future. From saving for a big purchase to covering unexpected emergency expenses, a savings account makes it easier to manage your money.
Personal savings accounts are designed for personal, family, or household purchases and expenses while business savings accounts are made to cover and save up for your business’ expenses. For example, say you need to set up a point-of-sale system at your storefront. You can tap into your business savings to make the purchase without needing to take out a business loan.
Why should you open a business savings account?
A business savings account can help you to play for future financial needs. Benefits include:
Work-Life Separation: Having a separate savings account for your business from your personal account will make it easier for you to track the money coming into and going out of your business. Keeping accounts combined could also complicate filing your taxes. You risk overlooking business expenses or misreporting business income. This can make the process a lot more difficult if your business is audited by the IRS.
Prepare for the Unexpected: Like a personal savings account, your business savings can serve as a rainy-day fund for your business. If you experience an unexpected emergency, you can use money from your business savings to cover the expense without disrupting cash flow. For example, say one of the vehicles owned by your business breaks down and needs repairs. You can cover the repairs with money from your savings account rather than relying on financing from options such as a business loan.
Save for the Future: As your business grows, your needs will change. You may find yourself needing a bigger space, more employees, or new equipment. A business savings account makes it easier to plan for future needs and expenses. You can set a savings goal and set aside money in your business savings, an account designated to keep you from spending money on other things.
Strong Banking Relationships: By opening a business savings account at a local bank, you’ll establish or further strengthen your relationship with a business banker. Your banker can help you navigate the financial needs of your business both now and in the future. When you need additional financing or services, such as a business loan or merchant services, you’ll already have a relationship with your business banker and your bank.
Compare Business Savings Accounts*
Similar to a personal savings account, a business account can help you earn interest on your money. That means that the more your business puts into savings, the more the money will grow. As your savings increase, your business earns more cash that will help you reach your goals and allow you to have money for the things you need, such as broken equipment or a new product line.
Where business checking accounts help you manage business transactions, a business savings account helps you plan for future money needs. At ASB, we offer three types of savings accounts for local businesses. All of our accounts feature low opening balance requirements — meaning you can start saving for the future of your business, even if cash flow is tight.
Biz Statement Savings
Are you looking for a basic business savings account that can earn interest with little to no fees? Our Biz Statement account might be right for you. This simple business savings account lets you open your account with only a $100 minimum opening deposit. The monthly service fee is a low $4.50. You can waive this service fee by maintaining a daily balance of $300 or more. You’ll get access to your account anytime, anywhere with phone and online banking included at no extra charge. You can even earn more on the money you deposit through interest earnings. If your account balance is $100 or more, you’ll earn interest on the balance that’s compounded daily.
Biz Tiered Savings
Want to get a little more out of your business savings? Our Biz Tiered account rewards you with a higher interest rate when you have a balance above a certain amount. You can waive the $5 monthly service fee with a monthly average balance of $500 or more. Like our Biz Statement account, the Biz Tiered account gives you access to phone and online banking for easy, fast access to your account when you need it.
Biz Money Market
Do you need fast access to the funds in your business savings? With our Biz Money Market account, you earn interest on your balance and get access to your savings with checks. You can open a Biz Money Market account with a small $1,000 minimum opening balance. Like our Biz Tiered savings, you’ll earn higher interest rates on higher balances. The $10 monthly service fee can be waived by maintaining a $1,000 minimum daily balance or a $2,500 average monthly balance.
How to open a business savings account
There are a lot of options out there when it comes to business savings accounts. Consider choosing local and working with a bank that truly understands your business needs and your community. At ASB, any one of our business bankers can walk you through the process of setting up accounts, applying for financing and managing business funds in Hawaii. They know and understand our local business requirements, and will ensure that your application is submitted smoothly.
Contact a business banker to make an appointment and open a business savings account today.
*Regulatory limits on withdrawals apply.