What is interest business checking?
Interest business checking is a checking account that has an annual percentage yield (APY) and accrues interest based on your account balance, typically calculated on a monthly basis. By having a business checking account that earns interest, your balance can grow overtime, rather than having your money simply sitting in an account.
Benefits of Interest Business Checking
- Profit: With interest business checking, you can put your money to work for you and continuously improve your financial stability. Having an interest-bearing checking account provides you with an opportunity to grow the money you have already earned and reinvest it into your business.
- Flexibility: To earn interest, certain financial institutions may limit your withdrawals, which can make it difficult to access your money. With an interest-bearing checking account at Grasshopper, you will have the ability to withdraw your money whenever and wherever you like. The money you don’t spend will earn interest.
- No Fees: Many interest-bearing checking accounts, such as Innovator Business Checking, offer little to no fees when you open an account. Having a free or low-fee checking account allows you to grow your finances at no cost and bank on your terms.
- Access: An interest business checking account can also provide you with access to other financial benefits, including online banking, mobile banking, overdraft protection, merchant card services, cash management tools, financing solutions, and more.
What is APY?
The Annual Percentage Yield (APY) is the real rate of return on your balance, taking into account the effect of compounding interest. This rate will vary depending on which financial institution you open your account through, meaning some interest business checking accounts will accrue more interest than others.
By opening an Innovator Business Checking Account at Grasshopper, you will have the ability to earn up to 1.00% APY, which is more than 25x the national average rate for accounts with a balance over $100,000.
What makes a good APY?
When determining the best APY for your business, it’s important to take into account any restrictions there may be on how much interest you can earn. Some accounts will have tiered interest rates, meaning you may start at a higher APY, but the percentage will go down as your balance increases. Some financial institutions may also limit how much money can gain interest. For businesses with higher account balances, this results in a portion of your money not being utilized or included in the calculation of interest. To ensure that you’re not limiting your potential to earn interest, it’s best to look for an interest-bearing account with unlimited APY, such as Grasshopper’s Innovator Business Checking. An unlimited APY will allow you to earn a limitless amount of interest on your account balance, regardless of how high it may get. This is why Innovator Business Checking is the best option for businesses.
By Michaela Lenahan in Business Checking