If you have been in business for a while, you know that you have what are called operating expenses (OPEX). If you use the pay-yourself first method, you are using the cash you make in previous months to pay for the next month with the goal never to need the next payment to come in immediately just to pay your credit card bill or payroll. That requires keeping some short-term cash (capital held for less than one year) on hand ready to be used.

Now, most of you probably have a business savings account, right? As you should! It’s a great first step to get a business checking and savings account. BUT, I can probably guess that your business savings account does not give you a ton of interest for storing your money there… The business bank account we had previously would give us around $15-$20 a month in interest for letting them hold our hard earned business savings. While that’s nice, that is $240 a year in money for you, while the bank is using your money to make a LOT more than $240.

If only, there was a savings account that could give you MORE for your trust, and stops short of being an investment account (where your investment may lose value).

Enter the Wealthfront Cash Account! Wealthfront is an automated investment service firm. These are better known as Robo-advisors. These are a class of fiancial advisor that provide financial advice and investment management online with moderate to minimal human intervention.

Now I know what you are thinking… “Drew, that’s an investment firm, I don’t want to invest my short term savings…” I get that! That is why I don’t actually use Wealthfront for investing. I can’t speak to their investment strategies. I can speak about their Cash Account! The Cash Account tracks the federal funds rate and offers account holders a significantly higher interest rate for holding their cash. As of this writing, the interest rate is 4.3%! This is substantially higher than other banks offer.

Keeping your short term cash here (you can set up payments from this account if you want as well!), and transferring it to and from your business checking and savings accounts when needed is a great way to help your cash grow faster but also keep it safe (FDIC Insurance).

Interested in learning more about Wealthfront? Check them out at wealthfront.com.

I was not paid by Wealthfron to write this blog. All opinions are my own. I am also not a financial advisor or CPA. Any opinions listed here are my own and if you want to consider investing, talk to a licensed financial advisor!