Balancing Security and Growth: Smart Deposit Strategies for Florida Businesses

In a fast-paced economy where opportunity can arise at any moment, a smart deposit strategy can help businesses promote growth and stability. For commercial enterprises in Florida, unpredictable weather and seasonal cycles mean smart treasury management is even more important. That’s why Seacoast Bank is committed to secure, growth-oriented business banking, providing enterprises with both business banking tools and helpful guidance on commercial deposit strategies.

Understanding Deposit Needs for Commercial Enterprises

Running a successful business requires careful cash flow management. While a business needs some cash to meet its operational expenses — like rent, insurance and payroll — long-term capital growth can help pave the way for investments in the business’s expansion.

A company’s short-term liquidity needs can vary based on the business lifecycle, risk tolerance, economic fluctuations and other factors. For example, Florida-based businesses in seasonal industries, such as tourism or agriculture, might need to save more during their busy season so they can sustain themselves during the offseason. Alternatively, a business facing a downturn might need to tap into those reserves to weather the slow season or prepare for the next opportunity.

An important first step for every business is to recognize and plan around individual deposit needs, including choosing the types of accounts to open, how much money to set aside to cover recurring expenses, how quickly it might need to access the money and how best to put those funds to work.

Deposit Account Options for Florida Businesses

There are a variety of commercial banking solutions designed to address the unique needs of Florida businesses, from savings accounts to sweep accounts and other cash management solutions. These accounts allow businesses to tailor their saving, spending and investment strategies to match their needs and risk tolerance, and include:

• Business Checking and Savings Accounts: Business checking and savings accounts help businesses secure and manage finances, with convenience features that allow companies to streamline cash flow.
• Business Money Market Accounts: Money Market Accounts offer higher interest rates than traditional savings accounts, along with some checking account features. These accounts may feature a tiered interest structure and a limited number of free withdrawals for each statement cycle.
• Certificates of Deposit (CDs): If you’re looking for security and a higher yield on money you know you won’t need until a specific date in the future, commercial CDs offer a guaranteed fixed interest rate and different maturity terms. CDs, like bank accounts and money market accounts, are insured by the Federal Deposit Insurance Corporation (FDIC), though they may come with early withdrawal penalties.
• Sweep Accounts: Sweep accounts can help optimize cash balances by automatically moving extra money from a primary account — like a checking account — into an account that yields more interest or pays down debt.
• Investment Sweeps: Investment sweeps transfer money into short-term, liquid investments, such as money market funds or high-yield savings accounts. These accounts can offer a competitive annual percentage yield (APY) that will vary depending on market conditions.
• Loan or Debt Sweeps: Loan or debt sweeps help pay off loan balances by automatically transferring extra cash from a primary account toward money the business owes on loans or lines of credit.
• Zero-Balance Accounts: Zero-balance accounts (ZBAs) give businesses a clearer view and more control over their money by centralizing cash from multiple subaccounts in a single master account.
• Hybrid Sweeps: Hybrid sweeps combine some of the features of investments sweeps and debt sweeps. Businesses can use hybrid sweeps to automatically move money into both accounts that can earn a competitive APY and pay down debt.

FDIC Insurance: Protecting Your Business Deposits

The FDIC is an independent government agency that insures customer deposits at member banks. Though the FDIC coverage limit is $250,000 per depositor per ownership category (per bank), there are a couple of strategies that allow you to potentially increase FDIC coverage on your assets without having to open accounts at multiple banks.

• Diversifying ownership categories: The FDIC has 12 ownership categories, each of which offers a maximum $250,000 limit. For example, if you have a business bank account, an employee benefit plan account and a mortgage servicing account at a single bank, you’ll have up to $750,000 in combined FDIC coverage ($250,000 per account) because each of these three accounts fall under three different ownership categories.
• Diversifying accounts: If you want to increase FDIC coverage on assets that are in the same category, you can diversify among separate “fully insured” accounts. Seacoast Bank offers additional FDIC coverage through the IntraFi Cash Service (ICS) and Certificate of Deposit Account Registry Service (CDARS). These services work by taking your assets from a single bank, dividing them into amounts below the standard FDIC limit and placing them in deposit accounts at participating banks in the IntraFi network.

Managing Large Business Deposits Securely

To manage large deposits securely, businesses can use strategic cash segmentation to divide assets among different individually insured accounts. By segmenting deposits, you can increase FDIC limits beyond the standard $250,000, providing additional security for your assets.

When making any deposit, businesses should also focus on preserving account security and leveraging tools like Remote Deposit Capture to reduce fraud and improve efficiency. Remote Deposit Capture is a convenient solution that allows businesses to securely deposit checks using a computer, tablet or smartphone, saving both time and money.

Growth-Oriented Strategies

Treasury management is a key part of running a business, and when executed strategically, can help balance liquidity management and optimize surplus funds.

There are many deposit growth tactics businesses can use to manage cash flows and put any excess funds to work. Bundling deposit products with lending and treasury services can improve visibility and security for businesses and empower commercial bankers to offer tailored solutions for each business’s unique needs.

Bundling products may also help reduce costs through an earnings credit rate (ECR). An ECR generates a credit to offset banking fees on non-interest-bearing deposits, defraying costs for the business. These rates are typically based on a benchmark, such as U.S. Treasury bill rates.

In addition to offering an ECR, banks can help businesses grow commercial savings with solutions like money market accounts, savings accounts and CDs. These products allow businesses to maintain operational liquidity while putting additional funds to work supporting short and long-term goals.

Florida-Focused Banking Solutions

Florida’s fast-growing economy offers countless opportunities for business owners, along with some unique challenges. The Sunshine State’s seasonal shifts demand a localized approach that accounts for unpredictable events, from tourism trends to severe weather events and rising insurance costs.

As a Florida-based bank, Seacoast’s local market expertise can help businesses prepare for the unexpected and stay ahead of market trends. By understanding regional deposit trends and personal preferences, Seacoast’s team of commercial bankers can support your business’s growth and security with a full suite of financial products.

Conclusion

Seacoast’s community-focused approach offers Florida businesses a relationship banking experience and personalized financial solutions. With 100 years of experience helping Floridians and nearly 100 branch locations throughout the Sunshine State, Seacoast provides comprehensive business banking on your terms.

Ready to connect with one of Seacoast’s commercial bankers to discuss your needs and options? Schedule a consultation online or fill out the form below.