Investment options for BUSINESS MONEY?

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Topic Author
mutuAL BUNDY
Posts: 20
Joined: Thu Jan 07, 2021 12:25 pm

Investment options for BUSINESS MONEY?

Post by mutuAL BUNDY »

Hello all, love this forum and I have learned a ton from you guys/gals!! So I am an LLC, taxed as an S-Corp. I am the only member, just me and no employees. I do payroll on myself/941's/W2 etc which probably doesn't matter to this topic, but just incase. Last year I was finally able to leave some money in the business and it looks like this year as well, and hopefully future years. This money is sitting on the sidelines in a local Vermont bank branch, sitting in a business checking account earning 0.00% interest with no perks/bonuses/etc. I am looking for an investment option for this parked cash?

I'm currently with Vanguard, and Fidelity for their HSA since Vanguard doesn't offer that.

I looked at Vanguard's corporate & other assets link aka https://institutional.vanguard.com/asse ... ssets.html but I don't know if that applies to my situation...

Ideally this business money I would like to put in an equivalent of Vanguard's settlement fund, which is somewhere around 5.27-5.29% last time I looked... I know Fidelity and others aren't as high as Vanguard which is fine.

This money could stay parked wherever it may go for quite some time. If it took a week or two to get the $ transferred back that would not be a big deal...

Please give me some recommendations for what I can do with this business money? I don't really want to take it as payroll. At some point a new business vehicle might use all and/or some of this money. I get 50% down from homeowners for each job which covers all materials so I don't need lightning fast access to the money....

Moderators move to the correct index header if this is the wrong one, this looked like the closest match....

Thanks all, I will check back in on Tuesday night when their is no NHL or NBA finals game. :sharebeer
fyre4ce
Posts: 2616
Joined: Sun Aug 06, 2017 11:29 am

Re: Investment options for BUSINESS MONEY?

Post by fyre4ce »

Do you realize that business profits in a given year are taxable to you, whether you pay them out as payroll or not?
BirdFood
Posts: 493
Joined: Sat Mar 23, 2024 12:15 pm

Re: Investment options for BUSINESS MONEY?

Post by BirdFood »

I assume there are business/legal reasons why it's parked in a checking account instead of being parked in Vanguard's sweep fund?
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retired@50
Posts: 13656
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Investment options for BUSINESS MONEY?

Post by retired@50 »

I think it's probably disallowed at Vanguard because it's a business account.

See this thread: viewtopic.php?t=422686

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
chassis
Posts: 2339
Joined: Tue Mar 24, 2020 4:28 pm

Re: Investment options for BUSINESS MONEY?

Post by chassis »

mutuAL BUNDY wrote: Sun Jun 09, 2024 5:56 pm Hello all, love this forum and I have learned a ton from you guys/gals!! So I am an LLC, taxed as an S-Corp. I am the only member, just me and no employees. I do payroll on myself/941's/W2 etc which probably doesn't matter to this topic, but just incase. Last year I was finally able to leave some money in the business and it looks like this year as well, and hopefully future years. This money is sitting on the sidelines in a local Vermont bank branch, sitting in a business checking account earning 0.00% interest with no perks/bonuses/etc. I am looking for an investment option for this parked cash?

I'm currently with Vanguard, and Fidelity for their HSA since Vanguard doesn't offer that.

I looked at Vanguard's corporate & other assets link aka https://institutional.vanguard.com/asse ... ssets.html but I don't know if that applies to my situation...

Ideally this business money I would like to put in an equivalent of Vanguard's settlement fund, which is somewhere around 5.27-5.29% last time I looked... I know Fidelity and others aren't as high as Vanguard which is fine.

This money could stay parked wherever it may go for quite some time. If it took a week or two to get the $ transferred back that would not be a big deal...

Please give me some recommendations for what I can do with this business money? I don't really want to take it as payroll. At some point a new business vehicle might use all and/or some of this money. I get 50% down from homeowners for each job which covers all materials so I don't need lightning fast access to the money....

Moderators move to the correct index header if this is the wrong one, this looked like the closest match....

Thanks all, I will check back in on Tuesday night when their is no NHL or NBA finals game. :sharebeer
Fidelity offers its Cash Management Account (CMA) for businesses. https://www.fidelity.com/open-account/f ... businesses

In the CMA you can hold cash in a money market position paying around 5% per year, or you can hold stocks, bonds, or etfs.
realclemsongrad
Posts: 384
Joined: Sat May 16, 2020 4:37 pm

Re: Investment options for BUSINESS MONEY?

Post by realclemsongrad »

chassis wrote: Sun Jun 09, 2024 7:50 pm
mutuAL BUNDY wrote: Sun Jun 09, 2024 5:56 pm Hello all, love this forum and I have learned a ton from you guys/gals!! So I am an LLC, taxed as an S-Corp. I am the only member, just me and no employees. I do payroll on myself/941's/W2 etc which probably doesn't matter to this topic, but just incase. Last year I was finally able to leave some money in the business and it looks like this year as well, and hopefully future years. This money is sitting on the sidelines in a local Vermont bank branch, sitting in a business checking account earning 0.00% interest with no perks/bonuses/etc. I am looking for an investment option for this parked cash?

I'm currently with Vanguard, and Fidelity for their HSA since Vanguard doesn't offer that.

I looked at Vanguard's corporate & other assets link aka https://institutional.vanguard.com/asse ... ssets.html but I don't know if that applies to my situation...

Ideally this business money I would like to put in an equivalent of Vanguard's settlement fund, which is somewhere around 5.27-5.29% last time I looked... I know Fidelity and others aren't as high as Vanguard which is fine.

This money could stay parked wherever it may go for quite some time. If it took a week or two to get the $ transferred back that would not be a big deal...

Please give me some recommendations for what I can do with this business money? I don't really want to take it as payroll. At some point a new business vehicle might use all and/or some of this money. I get 50% down from homeowners for each job which covers all materials so I don't need lightning fast access to the money....

Moderators move to the correct index header if this is the wrong one, this looked like the closest match....

Thanks all, I will check back in on Tuesday night when their is no NHL or NBA finals game. :sharebeer
Fidelity offers its Cash Management Account (CMA) for businesses. https://www.fidelity.com/open-account/f ... businesses

In the CMA you can hold cash in a money market position paying around 5% per year, or you can hold stocks, bonds, or etfs.
Please note that not all money market funds are eligible for business account esp the tax free ones. I learned it the hard way.
gionnovi
Posts: 48
Joined: Wed Dec 01, 2021 8:24 pm

Re: Investment options for BUSINESS MONEY?

Post by gionnovi »

https://www.getcrescent.com/
https://americandeposits.com/

I have taken demos on these two services but do not currently use. Both take your balance and sweep to high yielding accounts and manage fdic insurance limits for you. When I did the demos both were around 5%.

We pay for a service at PNC that sweeps our checking account balance into a fidelity money market and that works better for our company but I think the two I cited above would work okay for you.

I also have a vanguard brokerage and Schwab brokerage for two small LLC’s I have. Schwab lets your purchase money market funds in it and gives check writing. Vanguard has no check writing but the settlement fund works well and you can ACH.
magnusw
Posts: 30
Joined: Wed Dec 29, 2021 10:40 pm

Re: Investment options for BUSINESS MONEY?

Post by magnusw »

Hey there. I have the same issue. Hopefully by sharing what I do, that will help you make a plan.

I'm not great at budgets, so every month I withdraw money from the business based on the previous years sales. So last year we sold 1.7m so I keep 170,000 in the checking account. This is not super smart but conservative and I'm working on it, and I have very large purchases from time to time and employees. So say at the end of the month there is 220,000 in the account. I withdraw 50,000. That is all transferred to my personal vanguard account. From there, 40% goes to vmfxx for tax liability, 20% goes to me personally, 20% to my taxable retirement, and 20% goes to capital reserves. It all gets invested but for vmfxx tax liability (but it's at 5% so great).

My philosophy is to always get cash out of the business asap. I leave questionably too much as my baseline, but it prevents me from worrying.

I hope that helps. I feel your pain of having cash sitting there doing nothing but it's actually working for you by being there.
ttboy
Posts: 67
Joined: Sun Jan 01, 2023 5:50 am

Re: Investment options for BUSINESS MONEY?

Post by ttboy »

I have a Vanguard single member titled LLC brokerage account. Approx $1mm total balance which i roll 17week tbills and about 150k is in settlement fund (5.27% rate). Functions well. Linked to primary business checking at local bank, transfers take just 1-2 days. very happy with this set up.
magnusw
Posts: 30
Joined: Wed Dec 29, 2021 10:40 pm

Re: Investment options for BUSINESS MONEY?

Post by magnusw »

ttboy wrote: Mon Jun 10, 2024 6:22 am I have a Vanguard single member titled LLC brokerage account. Approx $1mm total balance which i roll 17week tbills and about 150k is in settlement fund (5.27% rate). Functions well. Linked to primary business checking at local bank, transfers take just 1-2 days. very happy with this set up.
Why do you keep this in the business as opposed to personal?
ttboy
Posts: 67
Joined: Sun Jan 01, 2023 5:50 am

Re: Investment options for BUSINESS MONEY?

Post by ttboy »

magnusw wrote: Mon Jun 10, 2024 7:23 am
ttboy wrote: Mon Jun 10, 2024 6:22 am I have a Vanguard single member titled LLC brokerage account. Approx $1mm total balance which i roll 17week tbills and about 150k is in settlement fund (5.27% rate). Functions well. Linked to primary business checking at local bank, transfers take just 1-2 days. very happy with this set up.
Why do you keep this in the business as opposed to personal?
I take a large draw once a year and just dca the draw into 3 Fund Port. Business is low income real estate rentals so would need cash if bargain property(ties) become available.
Have considered increasing annual draw…
fullham
Posts: 202
Joined: Thu Jan 23, 2020 7:18 pm

Re: Investment options for BUSINESS MONEY?

Post by fullham »

I use Live Oak Bank which offers online HYSA account for businesses. Current APR is 4%. Not quite as good as 5ish% in money market accounts but good enough for me. Very simple to set up and use, ACH withdrawals hit my external checking account next morning.
User avatar
vnatale
Posts: 3887
Joined: Sat Jul 31, 2010 8:50 pm
Location: Montague, MA

Re: Investment options for BUSINESS MONEY?

Post by vnatale »

I would definitely put all excess cash here:

https://investor.vanguard.com/investmen ... file/vusxx

VUSXX
Vanguard Treasury Money Market Fund

Almost maximum safety. Currently high paying.

Via ACH you can transfer funds back and forth between it and a checking account, which take about two days.

Takes a few minutes to make the transfer online. Most of the time is spent logging into your account via two factor authorization.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Topic Author
mutuAL BUNDY
Posts: 20
Joined: Thu Jan 07, 2021 12:25 pm

Re: Investment options for BUSINESS MONEY?

Post by mutuAL BUNDY »

mutuAL BUNDY wrote: Sun Jun 09, 2024 5:56 pm Hello all, love this forum and I have learned a ton from you guys/gals!! So I am an LLC, taxed as an S-Corp. I am the only member, just me and no employees. I do payroll on myself/941's/W2 etc which probably doesn't matter to this topic, but just incase. Last year I was finally able to leave some money in the business and it looks like this year as well, and hopefully future years. This money is sitting on the sidelines in a local Vermont bank branch, sitting in a business checking account earning 0.00% interest with no perks/bonuses/etc. I am looking for an investment option for this parked cash?

I'm currently with Vanguard, and Fidelity for their HSA since Vanguard doesn't offer that.

I looked at Vanguard's corporate & other assets link aka https://institutional.vanguard.com/asse ... ssets.html but I don't know if that applies to my situation...

Ideally this business money I would like to put in an equivalent of Vanguard's settlement fund, which is somewhere around 5.27-5.29% last time I looked... I know Fidelity and others aren't as high as Vanguard which is fine.

This money could stay parked wherever it may go for quite some time. If it took a week or two to get the $ transferred back that would not be a big deal...

Please give me some recommendations for what I can do with this business money? I don't really want to take it as payroll. At some point a new business vehicle might use all and/or some of this money. I get 50% down from homeowners for each job which covers all materials so I don't need lightning fast access to the money....

Moderators move to the correct index header if this is the wrong one, this looked like the closest match....

Thanks all, I will check back in on Tuesday night when their is no NHL or NBA finals game. :sharebeer
Fidelity offers its Cash Management Account (CMA) for businesses. https://www.fidelity.com/open-account/f ... businesses

In the CMA you can hold cash in a money market position paying around 5% per year, or you can hold stocks, bonds, or etfs.
[/quote]
chassis wrote: Sun Jun 09, 2024 7:50 pm Thanks chassis, looks like some other posters mentioned I can do what I need to & fits my needs at Vanguard, I already have a SEP-IRA amongst other things with them as well. Fidelity is my other go to option if not.. :sharebeer
mutuAL BUNDY
Topic Author
mutuAL BUNDY
Posts: 20
Joined: Thu Jan 07, 2021 12:25 pm

Re: Investment options for BUSINESS MONEY?

Post by mutuAL BUNDY »

realclemsongrad wrote: Sun Jun 09, 2024 10:12 pm
chassis wrote: Sun Jun 09, 2024 7:50 pm
mutuAL BUNDY wrote: Sun Jun 09, 2024 5:56 pm Hello all, love this forum and I have learned a ton from you guys/gals!! So I am an LLC, taxed as an S-Corp. I am the only member, just me and no employees. I do payroll on myself/941's/W2 etc which probably doesn't matter to this topic, but just incase. Last year I was finally able to leave some money in the business and it looks like this year as well, and hopefully future years. This money is sitting on the sidelines in a local Vermont bank branch, sitting in a business checking account earning 0.00% interest with no perks/bonuses/etc. I am looking for an investment option for this parked cash?

I'm currently with Vanguard, and Fidelity for their HSA since Vanguard doesn't offer that.

I looked at Vanguard's corporate & other assets link aka https://institutional.vanguard.com/asse ... ssets.html but I don't know if that applies to my situation...

Ideally this business money I would like to put in an equivalent of Vanguard's settlement fund, which is somewhere around 5.27-5.29% last time I looked... I know Fidelity and others aren't as high as Vanguard which is fine.

This money could stay parked wherever it may go for quite some time. If it took a week or two to get the $ transferred back that would not be a big deal...

Please give me some recommendations for what I can do with this business money? I don't really want to take it as payroll. At some point a new business vehicle might use all and/or some of this money. I get 50% down from homeowners for each job which covers all materials so I don't need lightning fast access to the money....

Moderators move to the correct index header if this is the wrong one, this looked like the closest match....

Thanks all, I will check back in on Tuesday night when their is no NHL or NBA finals game. :sharebeer
Fidelity offers its Cash Management Account (CMA) for businesses. https://www.fidelity.com/open-account/f ... businesses

In the CMA you can hold cash in a money market position paying around 5% per year, or you can hold stocks, bonds, or etfs.
Please note that not all money market funds are eligible for business account esp the tax free ones. I learned it the hard way.
10-4 Thanks for the heads up :sharebeer
Topic Author
mutuAL BUNDY
Posts: 20
Joined: Thu Jan 07, 2021 12:25 pm

Re: Investment options for BUSINESS MONEY?

Post by mutuAL BUNDY »

ttboy wrote: Mon Jun 10, 2024 6:22 am I have a Vanguard single member titled LLC brokerage account. Approx $1mm total balance which i roll 17week tbills and about 150k is in settlement fund (5.27% rate). Functions well. Linked to primary business checking at local bank, transfers take just 1-2 days. very happy with this set up.
This sounds like what I'm after, I will look into it. Thank You :sharebeer
mutuAL BUNDY
Topic Author
mutuAL BUNDY
Posts: 20
Joined: Thu Jan 07, 2021 12:25 pm

Re: Investment options for BUSINESS MONEY?

Post by mutuAL BUNDY »

gionnovi wrote: Sun Jun 09, 2024 10:21 pm https://www.getcrescent.com/
https://americandeposits.com/

I have taken demos on these two services but do not currently use. Both take your balance and sweep to high yielding accounts and manage fdic insurance limits for you. When I did the demos both were around 5%.

We pay for a service at PNC that sweeps our checking account balance into a fidelity money market and that works better for our company but I think the two I cited above would work okay for you.

I also have a vanguard brokerage and Schwab brokerage for two small LLC’s I have. Schwab lets your purchase money market funds in it and gives check writing. Vanguard has no check writing but the settlement fund works well and you can ACH.
Thanks gionnovi! You and another poster have mentioned I can do what I was hoping at Vanguard. I will now look into it even more to try to set-up a business account with them. :sharebeer

mutuAL BUNDY
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