Where Should You Invest Your Business Savings?

Where Should You Invest Your Business Savings?

on Feb 27, 2021 in Small business

Building up savings within your business could help you to expand without having to take out a loan. Alternatively, savings could be useful for offering a safety net if disasters arise and you need access to extra funds. 

When building these savings, it can be worth finding ways to invest them. This can allow you to grow your savings more rapidly. Below are just a few ways to invest your business savings.

Savers

Savings accounts are the most basic way to invest savings. A good savings account will have high interest rates, allowing you to make a little extra on your savings. Savings accounts are a risk-free way to invest your savings (there’s no way you can lose your money).

There are business savings accounts specially designed for businesses. It’s worth shopping around banks and comparing interest rates to find the best one. 

Bonds

When you invest in a bond, you’re essentially giving out your money as a loan. You cannot access your money until the bond has matured. Interest rates are usually greater than on savings accounts.

Most bonds are low to no risk – these include government bonds and large company bonds. Small company bonds can be a little riskier. This higher risk may come with greater interest rates, which is something worth weighing up.

 

Stocks

Investing in stocks is another way to invest your savings. Stocks have the ability to generate bigger returns than savings accounts and bonds. They are however a little riskier.

Some people will take out a stocks and shares saver or hire a stockbroker to invest stocks for them. In such cases, there may be fees involved that you should be wary of. Another option is to invest in stocks yourself using a free or cheap trading platform. High-growth stocks will make you the biggest return, however higher returns generally means a risk of greater falls too. 

Crypto

Cryptocurrencies are digital currencies. They include the likes of Bitcoin and Ethereum. By buying a cryptocurrency that is rising in value and then selling it, it’s possible to make a large profit. Cryptocurrency values can be quite volatile, so there is some risk involved with this. 

You can sign up to buy Bitcoin and other cryptocurrencies using an online cryptocurrency exchange. These exchanges may come with fees that are worth comparing. After buying crypto, make sure to store it somewhere secure (it could be worth using a digital wallet to store your crypto). 

Forex

Forex trading involves buying foreign currencies. Just like crypto trading, you can make a return by buying a currency that is rising in value and the selling. This could be another effective way to make a big return on your business savings. Just be wary that like crypto and stocks, there are risks to this type of investing.

You can buy foreign currencies using a forex broker. It’s worth comparing broker fees to find the cheapest one. 

Image source: Pexels.com

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