Business Savings Account - Interest and Multiple Banks

[NEF]

Hello just after some advice and feedback regarding saving money in a business.

How do people save there business cash that is surplus. Do they split the money across multiple business accounts? I see online that there are quite a lot of business banks offering higher interest rate options, but my main concern is security of savings if any of these banks have issues... Would it be a good idea to put upto the FSCS assured limit in each bank and split this across multiple banks ?

 

[MyAccountantOnline]

Hello just after some advice and feedback regarding saving money in a business.

How do people save there business cash that is surplus. Do they split the money across multiple business accounts? I see online that there are quite a lot of business banks offering higher interest rate options, but my main concern is security of savings if any of these banks have issues... Would it be a good idea to put upto the FSCS assured limit in each bank and split this across multiple banks ?

I suspect for most of the typical forum users here the FSCS compensation limit isn't an issue but certainly it's something to consider if you are saving more than £85,000.

 

[NEF]

There must be a lot in similar positions as looking across many main distributors online, they all have a large amount of cash surplus in there businesses.

 

[macScot]

We chose to invest our surplus cash into stocks and shares, however, that has its own risks.

So if you do not want to risk the capital in any way and do not want to use it to expand the business it would be best to split it between different bank accounts to keep below £85k and possibly put some in fixed deposit savings if the cash is not required back in a rush and you have adequate access to some for your business cashflow.

 

[NEF]

We chose to invest our surplus cash into stocks and shares, however, that has its own risks.

So if you do not want to risk the capital in any way and do not want to use it to expand the business it would be best to split it between different bank accounts to keep below £85k and possibly put some in fixed deposit savings if the cash is not required back in a rush and you have adequate access to some for your business cashflow.

This is exactly what I was thinking, just split between different banks upto the FSCS limit, the interest rates are upto 4% now on some of them on bond saving accounts fixed for a year.

 

[The Byre]

It matters little where and how you store money - money in the form of currency is losing its value at the rate of about 15% p.a. If you can find a T-Bill giving you more than that, well, do let me know!

As for stock/shares - PE ratios would have to be in single figures and the companies issuing them would have to have real assets and be mostly free of debt before they make sense!

That just leaves gold coins. We converted our long-range cash six months ago - 11% rise in price and far higher rises predicted this year. And any increase in nominal value for UK gold coins is tax-free. Our short-term cash has to obviously remain in Euros and Pounds.

Of course, gold does not really increase in value, it's just that currencies decrease in purchasing power. It cost c.a. 160 ounces to buy an average house in 1950, it still costs 160 ounces to buy the average house.

 

[NEF]

It matters little where and how you store money - money in the form of currency is losing its value at the rate of about 15% p.a. If you can find a T-Bill giving you more than that, well, do let me know!

As for stock/shares - PE ratios would have to be in single figures and the companies issuing them would have to have real assets and be mostly free of debt before they make sense!

That just leaves gold coins. We converted our long-range cash six months ago - 11% rise in price and far higher rises predicted this year. And any increase in nominal value for UK gold coins is tax-free. Our short-term cash has to obviously remain in Euros and Pounds.

Of course, gold does not really increase in value, it's just that currencies decrease in purchasing power. It cost c.a. 160 ounces to buy an average house in 1950, it still costs 160 ounces to buy the average house.

Where would you buy and sell the likes of gold coins ?

 

[WaveJumper]

https://www.royalmint.com/gold-price/how-to-sell-your-gold/

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@The Byre I am sure will have some more tips

 

[The Byre]

Atkinson's are good value - others such as Bullion By Post are available.

Just remember that it costs to buy and sell and there is some short-term volatility, so you make up for the costs of trading by timing the buying and selling points carefully (if possible!) Gold is not there to make a short-term win, but to hold for several years.

Gold only serves to freeze the underlying real-world value of what otherwise would be mere tokens after a few years, as inflation is constantly being fed by the creation of new currency.

Also, it is important to remember that the inflation figures are doctored by repositioning the basket of goods and services, i.e. taking things out that people buy less of and introducing goods that people are buying more of - conveniently ignoring the obvious fact that people buy less of something when the price goes up! So the £20 weekend steak is replaced by the £5 weekend roast chicken.

You can safely probably double the official ONS figures - houses and gardens are today much smaller, staple foods like a fresh kipper or a cauliflower of reasonable size have vanished from the shelves, taxes are far higher, public amenities such as swimming pools, youth centres and libraries have been trashed - but silly toys like iPhones linked to contracts are in that basket.

You personally only have one real asset and that is Time. The one physical asset that you can pass on to your heirs is land that is unencumbered by debt. A good education - formal or informal, it matters less and less today, is another. Everything else is just so much fugazi - tokens and toys that in reality are liabilities and not assets.