As we all know, almost all companies have their business accounts to have an overview of their company financial performance, the incoming and outgoing remittances… But what about savings accounts? What roles do savings accounts take in the success of enterprise financial management? Business owners that are using cryptocurrency in their transactions may wonder if opening a savings account for crypto businesses is necessary at all.
The need for Savings accounts
There are a diversity of reasons that convince people in business to establish a savings account for their own company:
- For speculative reasons
We all agree that doing business is full of rises and falls, so stocking up on your assets and money is always a wise choice. If economic recession, drastic market changes, and company downturn, you may find this savings a safety net when the revenue turns terrible. You still have to pay expenses like employees’ paychecks, premises’ rents, utility expenses, etc…
Even when your company is still performing brilliantly, an on-the-side budget sometimes is still of necessity once your transactional business account has been out of credits due to the regularly automated transfers.
- Company expansion
Ambitious entrepreneurs want their enterprises to lead the market, keep on expanding their influence and customer base. In this case, accruing funds for further steps in the future is in need. If you want to open more opportunities to your company, it doesn’t mean that you have to get into debt. Putting aside a budget for your new projects is a very cautious strategy for the development of your business.
- Regular Interest
Savings accounts are always known to provide the account owners with a higher percentage of interest than the accounts used for transactions. Especially for Bitcoin, Ethereum,… holders, a savings account promises to return an outstandingly high interest rate compared to a conventional bank savings account.
- Insulating money against cyber frauds
A transactional account is more susceptible to online phishing, cybercriminals’ swindles than a savings account. Transferring money from the account can accidentally cause data breaches if the users are not vigilant enough about getting their information highly protected.
Crypto Business savings account
So why should a business save its money in Cryptocurrency and keep a savings account? Some compelling reasons back up the idea:
Extremely high interest
Putting money in a bank has been expected as a means of speculation both for individuals and companies. While it is considered relatively safe, many business holders still stake their money in the stocks and bonds market. Banks’ interest to bank account owners is relatively low (about 0,1% to 0,6% a year). For entrepreneurs that want to take adventures and make their businesses big in a short time, it is not enough. Bitcoin takes the world by storm when on average, crypto providers offer interest rates from above 0,6% to 40%.
The interest rate is determined by a range of factors such as savings terms the currency,…
Tempting investment yield
Ever since its introduction into the financial market, Bitcoin, one of the most widely-favored digital virtual coins, has swung drastically in value. Although it has been through plunges and surges a lot, considering its 2015 value equivalent to 300$ a coin and its present value as over 30,000 a cash, the escalation in cryptocurrency price and the growing fancy people have given to the Blockchain-backed currency is pretty evident.
Many investors have grasped the opportunities to diversify their investment portfolio by joining crypto exchanges, especially when crypto exchanges can sometimes bring in investment yields that are even more attractive than their amounts of return from money put in stocks and bonds.
Virtual money has not ceased to gain more and more attention from investors, businesses, and financial companies. A myriad of Defi platform and digital wallet providers have been born, followed by a range of initiatives and upgraded tools that help to refine Crypto exchanges and satisfy the Crypto fundraisers and holders. Along with that, several big names like Microsoft, Paypal, Xbox have accepted virtual money in transactions with their customers. It is predicted that Bitcoin and other Cryptocurrencies will be expanding their influence more and more strongly in the following decades.
As the Crypto market is getting more and more updated with advanced technology, protocols, and algorithms, the prospects of its booming and going mainstream worldwide are entirely feasible. Hence, investing in a Crypto savings account is not a bad idea because it seems that Crypto will develop more and more strongly shortly.
Virtual coins have a variety of solid points that tempt business owners to keep their savings account in these exchange currencies, but there are some glitches that we should watch out for when speculating on Crypto tokens.
- Promise high-interest income.
- It is expected to increase drastically in value in the near period.
- Speculation on Bitcoin can bring a source of high income regularly to the company.
- Sudden changes in the value of Crypto tokens may pose a threat to money savings.
- Not FDIC-insured. A bank, a government does not regulate it, and of course, you can not get insurance compensation from them if your platform provider is a swindler or goes bankrupt.
The theory of Cryptocurrency and the high annual percentage yield that crypto providers offer sound fascinating, and a high return source of income absolutely can come to you if you already have an insight into crypto exchanges and know all about how it works how to make profits from it. However, if you are still not so sure about all the concepts of Blockchain, Bitcoins keeping a savings account in a conventional bank would be a better choice for your company until you comprehend digital virtual coin exchanges.
A business banking account is never too small for your company, and there are numerous reasons to open one. Creating a business bank account takes time, but it only requires a minor change in how you run your business. Establish good business financial habits by keeping your personal and business finances separate from the start. This will make record-keeping, accounting, filing taxes, and applying for business credit as simple as possible as your business grows and your financial needs expand.
Danis Woods in Businessman, investment banker and stock exchange traders. On the same time he loves writing financial blogs to shed lights on different aspects that new and existing businessman are not aware of.