I’m curious how other small business owners handle their revenue. We have a significant amount (100K+) in a business checking account that gains minimal interest. But should we be keeping it in a high interest savings account or even some of it in a CD account instead? I’m concerned about our ability to keep up with inflation, but also need to keep a certain percentage liquid as well in case of emergency. Any advice?
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I was initially leaving it in a high yield savings account, wealthfront and mercury are great options for this, specially with the automated transfer. However, I would also discuss with an accountant to better offset taxes with property. Use the high-yield to save up for taxes, but if that can be safely allocated into a commercial property with a guaranteed 10-year lease, has much better returns on your money and tax free. Don’t forget to setup a 1031 exchange in case the economy turns or your business, so if you need to sell, specially with the added value of a long-term tenant, you can sell for a profit without being subject to capital gains tax!