The benefits of cash accounts for businesses

July 11, 2023

The benefits of cash accounts for businesses 

With a recession possibly looming, it’s important for CFOs to ensure their firm’s cash is both safe and available. And while there are several types of cash accounts available to businesses, CFOs need to consider what works best for their particular organization. 

Why cash accounts?

In a sense, cash accounts offer the best of all worlds for businesses, and even more so if there are fears about a looming recession. When cash is merely sitting in a checking account, it's losing value through inflation (a particularly acute problem at the moment). When it's locked away in a money market fund or in government securities, it's still relatively accessible, but less liquid than a cash account, and subject to credit and price risk.

Cash accounts, on the other hand, offer a higher annual percentage yield (APY) and ready access to funds whenever required. Think of them like more advanced savings or checking accounts designed specifically for businesses: the money's always there to be withdrawn, but instead of earning a 0.07% APY, it's earning significantly more, all while facing lower risk than the alternatives. Some of these accounts can also offer automated treasury management to remove part of the administrative burden sometimes associated with optimizing cash holdings.

The options

CFOs seeking higher yields on their cash have quite a few choices, but unless they have unusually specific expertise in choosing between the different alternatives in terms of underlying risks, maturities, and yields, they are often significantly better off trusting a simple or automated cash management solution.

When researching available options, consider the team behind the offering and whether those individuals have strong backgrounds, capabilities, and expertise when it comes to cash management, and particularly investing (or they won’t understand the true underlying risks of various cash instruments, funds, securities, and banks). Look for markers of security and safety from the providers, such as strict account and data security protocols, and their ability to pick solid banking partners. A safe home for your company’s cash should tick all of these boxes, not just a few.

Recession or not

Economists say the financial system has a 64% chance of contracting—or nearing recession levels—by the end of 2023. Couple that with the fact that the Federal Reserve plans to leave interest rates at levels not seen in more than a decade for the foreseeable future to continue the inflation fight, and it becomes obvious that  businesses have a responsibility to prepare for the worst, or risk being caught off guard. 

It's possible the recession we're all dreading will never arrive, and business will proceed as usual. Interest rates will stabilize, inflation will drop, markets will calm, and supply chain issues will work themselves out. But even if that does happen—and the odds suggest otherwise—CFOs should still be looking to maximize the value of the assets their companies already hold. Crash or no crash, cash accounts are a wise investment and smart cash management should be the standard practice.

And cash accounts are exactly what Mayfair specializes in. Businesses choose Mayfair for their cash management needs because we offer a 4.42% APY* on balances. Not only do we offer a highly competitive yield, but your money also benefits from FDIC insurance, making cash management a profitable—and safe—option for your business. 

* For more information on the current annual percentage yield (APY) for Mayfair’s cash account products, please visit and read our disclaimers and terms of service.

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