Business Money Market Accounts
There are checking accounts, there are saving accounts, and then there are money market accounts, which combine features of the first two. A money market account is a savings account that comes with checks and/or a debit card and allows a limited number of transactions (withdrawals and transfers) per month. They’re insured by the NCUA (for accounts held at credit unions) for up to $250,000.
With its features, a money market account can increase cash flow for your small business and improve returns on money saved.
Why choose a money market account
The main attraction for businesses to these accounts is that they allow money to earn a relatively high interest rate—maximizing interest income—while remaining liquid enough for easy access in case of unexpected business expenses. If funds are tied up in investments or accounts with limited or delayed access, you could be in a pickle when a financial emergency strikes.
Separating your business finances from your personal accounts is very important to protect your personal assets from legal liability. A business money market account can be opened at the same credit union you personally bank at. Business transactions can be tallied by category and imported into accounting software when it’s time to review financial balance sheets.
Other benefits can include:
- Waived monthly fee with minimum balance
- Access to small-business banking specialists
- Daily interest rate accrual and monthly payouts
- Special interest rate bonuses for meeting pre-specified criteria
- Increased number of free monthly transactions
- Free or discounted checks
- Tiered interest—increased interest with higher balance or number of deposits
What you need to open an account
This list may vary by credit union, but a good place to start includes:
- Name of business
- Mailing address
- Proof of identity (e.g. driver's license)
- Federal tax ID number
- Business name filing document (e.g. a trade name certificate or limited liability partnership agreement) with both business and owner’s names
- Business organizing document (e.g. certificate of limited partnership) with business name and name of partners that is filed with and certified by a state official
A business money market account can be a valuable financial tool to have in your business toolkit for both stability, legal security, and business growth. Ask your credit union small business experts for help setting up an account for your small business.