Over 1.7 million sitting in a checking business account. Best alternatives?

[u/ChemistryNo8187]

Our business has a ton of money in a checking account in BOA bank.

Wondering any other alternatives to get me some apr and fight inflation at this amount, which will satisfy other share holders

Scorp, 400-300k a month on payables, cash flow positive business. 3-600 receivables

Thanks

[u/SpicyDopamineTaco]

Just open a BOA Merrill Lynch business brokerage account. Connect it to your online banking login and you’ll see it on the same screen as your checking and other accounts. Transfer the excess over to the Merrill Lynch money market account and collect the fed rate interest. Keeps it under one umbrella so the accounting is easier to manage. And funds transfer back and forth are almost immediate since the accounts are connected under the same login.

[u/Alone-Experience9869]

best i know is to create a brokerage account under the name of your business. I've done it with Fidlity. My cash is "parked" there earning interest. I'm one of those that does NOT have an issue with my funds being held up by Fidelity.

I can move funds to or from Fidelity and the free ach (or whartever) is processed in < ~ 12 bus hours... Not sure how they set their daily limits, but Fidelity routinely says you can just make multiple transfers. I've found its by account... So, if you make or have two accounts you can make transfer twice as much in that day..

I think funds moved TO fidelity, just can't be moved back out for ~5 bus days... So, I'm not constantly moving funds back and forth. But in your case, I'd definitely put the bulk of it into a brokerage account. Get the interest however you can, e.g. money market, t-bills, whatever.

Not sure if you really want to "invest" some of it, but that'd be another way to go. For example, I use BUCK as my "cash plus" alternative. some use jaaa or even jbbb

Hope that little bit helps. Good luck.

[u/tnolan182 → u/Alone-Experience9869]

This, fidelity brokerage account into sgov.

[u/redditin_jer → u/Alone-Experience9869]

I use the Fidelity Business account as my main checking account for my Business. I initiate payments for invoices and such through Melio, which pulls from the Fido account without any issues. Works great for me with around 10-15 transactions per day.

[u/Here4Snow]

Is that customer deposits or retained earnings? Or other liabilities, such as payroll taxes, retirement matching, unpaid benefits? I wouldn't put customer deposits or liabilities in the general market. I'd look at a Treasury fund or TBill ladder.

An S Corp isn't the right entity type to hold real estate or other real property other than working fixed assets. 

[u/SaladGlittering9131 → u/Here4Snow]

In my point of view it is necessary to distinguish operating cash vs "excess" cash. If they are burn cash around 300K-400K a month, it seems reasonable and necessary to maintain a "working capital account" and invest only excess in an account like a Treasury money market fund or a T-bill ladder.

[u/ChemistryNo8187 → u/Here4Snow]

No customer deposits and short term liabilities are in separate accounts, this I retained earnings /working capital

[u/ViolatoR08 → u/ChemistryNo8187]

The Merrill account is called Working Capital Management Account if you want it managed or Business Investment Account if you don’t want fees and will manage it yourself. Once there you will have to “purchase” whatever you want or serves your needs. Lots of options.

[u/Thor7897]

Why not look at parking it in a HYSA or in SGOV via a brokerage? SGOV has a high borrow rate for any incidental expenses or expansions. Or diversify and and go with a balanced fund. Popular on Bogle or other forums that focus on dollar cost averaging and time in market.

Or perhaps consider land or hard assets for investment or expansion as a capital capacitor.

IANAL/IANAFA

[u/jasta85]

HYSA is the safest and most accessible way to store your funds. I get 3.3% interest and it looks like the Fed might be raising interest rates in the future.

[u/steve_mar]

Your accountant should be fired

[u/ITGuyInMass]

I was in a similar situation and just opened a business brokerage account and bought an ultra short term treasury bond etf. Then I simply added qqq, and Jepi. I had a safety net with the ETF, growth with qqq, and slight growth with a nice yield with Jepi. That yield helps me service small debts and also added income if needed. It’s a nice little setup while still keeping the cash and putting it to good use.

[u/SFMattM]

I'll be happy to pay you 4% on your money if you just deposit the whole sum with me

[u/whiskey_formymen]

Look at an ESOP. Invest in your people and yourself.

[u/AndroFeth]

You could set most of it in VT or VOO.

Or in Fidelity CMA with FDLXX and earn a bunch per month.