How Do Businesses Choose the Right Type of Deposit?
Choosing the right type of deposit depends on several factors:
Liquidity Needs: For businesses needing frequent access to funds, checking accounts are ideal. Savings accounts or CDs may be better for funds that can be set aside for longer periods. Interest Rates: Compare the interest rates offered by different types of accounts. Savings accounts and CDs typically offer higher rates than checking accounts. Fees: Some accounts may come with maintenance fees, transaction fees, or penalties for early withdrawal. It's essential to assess these costs. Account Limits: Be aware of any transaction or balance limits imposed by the bank.