If you’re a small business owner, it might feel counterintuitive to have a business checking account with the goal of keeping a $0 balance.But that’s actually the whole point of a Zero Balance Account: You use that dedicated checking account to fund a specific expense, such as payroll, departmental spending, petty cash, travel reimbursement, or any other business need. Funds are sent to a particular Zero Balance Account only when necessary to cover checks or debits. At the end of every day, any money in the Zero Balance Account is transferred back to the primary account.
Small businesses often use these types of accounts because they help control finances, increase efficiency, and allow all funds to take advantage of higher interest rates.
Running a small business is an intense, but rewarding undertaking. Most owners and operators start their business out of passion. Some smart financial moves and optimized cash management can support that passion and help your business grow. The right bank can offer you solutions you may not have known about. One key example is a sweep account. In the following article, we’ll answer basic questions like “What is a sweep account?” “What are the benefits?” and “What are the drawbacks?” By the end, you should have a clearer understanding of how this type of account can benefit your small business.
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