How Low Interest Impact Small Business

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Ever wanted to fire your bank?

If you’re like millions of business owners, you likely look at the bank as a necessary frustration. You drive up, give them your money, and quietly accept their wait times and lofty fees.

Most importantly, it is the interest rates that most affect small businesses, whether the owners understand the real implications of the numbers or not. So, why are interest rates today so low? To answer that question, we’ll have to look at the Federal Reserve. The Federal Reserve oversees banking in the United States, and is supposed to protect American consumers from unfair banking practices. But, it turns out, the Federal Reserve is actually intimidated by today’s big banks, and is concerned that they do not have the infrastructure in place to protect the country from the banks’ nefarious methods. In response, the Federal Reserve acts in a fearful, cowering manner, rather than trying to fix the broken banking system. Ultimately, it’s up to American consumers to look out for themselves. Even though you have so much already on your plate as a business owner, add this banking concern to your list of worries.

It wasn’t always this way.

Back in the day, if a business owner put $20,000 into a savings account, a healthy 5% return would yield them $1,000 a year. Business owners could then use that $1,000 for working capital to run their business better, or to head out on a much-deserved vacation.

Today, we are living and working in a low interest rate environment. In today’s banking culture, most banks, like Bank of America, Chase, PNC, and Wells Fargo offer customers a pathetic .01% interest, which would give that same small business owner mentioned earlier about $2.00 a year on that $20,000 they deposit. Two dollars. That $2.00 might be worth a coffee at a fast food joint. And while many online banks offer 1%, the outlook still isn’t great. These banks get the privilege of using your money for their own gains, and don’t even think of paying you fairly for it. They’re just getting richer, and basically robbing customers of their much needed vacations and potential working capital. And, strangely, nobody is really doing anything about it. Getting frustrated, yet?

To banks, your money – sitting in their bank – is theoretical. But, for you and me, it’s completely real.

Now, there is an alternative: a concept known as self-banking. Let’s cut to the chase – there are secret savings accounts that almost no one knows about from companies like NetSpend, that offer 5% interest. Yes, that’s a 5 with no points before it. Five. While NetSpend is certainly not an ideal company, with their lofty fees and enticing accounts meant to draw you in, customers can benefit from using this tool, depositing money in the savings account, and leaving it alone. NetSpend is a company with over 10 million customers, who tries to reel people in with their generous savings accounts, expecting that customers will end up paying them much more over their lifetime in ongoing fees. So, while this account is attractive and useful, if you aren’t certain on how to avoid the pitfalls, NetSpend will try and trap you the best way they can, and you certainly won’t benefit in the long run.

By utilizing hidden online banking companies, rather than relying on more traditional avenues, you can finally take the power out of their hands, fire them, and put yourself back in control of your financial destiny. Problem is, you’re left to research this on your own, and take some calculated risks. Unless, of course, you contact me. And I’ll be happy to get you pointed in the right direction.

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