Business owners usually cannot get the same interest rates as private individuals on a savings account. To still get an attractive rate, they have to go an extra mile.
The reason that business savers are at a disadvantage over individuals, is that savers are willing to open an account with a bank when it offers a higher interest rate than competing banks. But if the return drops, business savers rapidly take their cash elsewhere since many businesses actively manage their excess cash.
For private savers that may be different. They have other things on their minds and do not always have the time or appetite for looking for the best rates. Once their account is opened, the majority remains loyal even when competitors come up with better interest rates. Banks take advantage of this stickiness by introducing new savings accounts with attractive rates while gradually lowering the rates on existing accounts.
If you manage an entity with lots of cash like for example a private pension vehicle or private pension trust, it is sometimes easier. Some banks offer the same rates as for private savings accounts for these vehicles since they are usually managed by individuals instead of companies.
The most convenient solution is to open an account with the same commercial bank where you have your current account. In that way you can make transfers between your own bank accounts within the same internet banking application. To benefit from an attractive rate, it is better however to do some comparison shopping. Though interest rates are lower for business customers than for private customers, they usually fluctuate less. Niche players like ING Direct usually offer better interest rates than main street banks. The latter leverage their current account holders who keep loyal to them for the convenience reasons mentioned before.
You have the reassurance that your cash is guaranteed by the Federal Deposit Insurance Corporation (FDIC) for deposits of up to 250,000 dollar. If your savings exceed that limit, it is wise to spread it over two or more banks as the FDIC limit applies to individual savings banks (not to branches of the same commercial bank). Also, it is always a good idea to deposit your money with a solid bank. Although unthinkable some years ago, a guarantee from the US (or any government) is not a hundred percent fail safe protection anymore.
When you have chosen a savings account, prepare for some forms to be filled out. Usually you can take the initial step online but the odd paper form cannot always be avoided and copies of business and personal identification documents are needed as well. Of course, if the bank you have chosen has a branch near where you live, you can always just go there for assistance in person. A few of the best interest rates however can only be obtained online.
In these times of low returns, you can only benefit from an attractive interest rate if you actively chase high interest savings accounts. Common sense and Google are your best friends.
Further information (Dutch and English): spaarrekening stamrecht BV
