I want to park my business savings in an interest earning business account but I can't find any decent ones. Where's the logic in this?
Why Aren't There Any Business Accounts That Offer Savings Interest Rates?
tommynolips on 20/07/2023 - 16:20
Comments
Macquarie has a good looking account, can't remember the details now but I looked at it a few weeks ago. (Did not cater to single director entities where their shareholding is over 40% or something like that.)
Edit - see above comment
(Did not cater to single director entities where their shareholding is over 40% or something like that.)
I’m assuming you’re talking about the Macquarie cash management account+accelerator account. Where does it say it doesn’t cater to single director entities where their shareholding is over 40%?
I’m in the middle of opening a trust with corporate trustee account with them and once that is completed, I’m going to open another account for my bucket company(where I’m the sole director and shareholder) hence my curiosity.
Edit: just looked at Macquarie business offerings and maybe you’re talking about the Macquarie Business Savings account instead with a 4.1% interest rate? I’m still curious about where it might specify that it doesn’t cater to single director entities with specific shareholding thresholds..
Yes, business savings account. I'm not sure if it's 40%, maybe it was 49%, or something to that order. It was stated at the start of the application. I tried with a company that had a director and an alternative director, both 50% - everything was going OK till they performed an automatic (assumedly ASIC) search at which point the application stopped with a message that the business was ineligible due to having the single director with the large shareholding.
Sorry, now I'm even more confused. You say your company has a director AND an alternative director but its a single director entity, that seems like some sort of paradox of directors. I'm not even sure what an alternative director is, a person is either a director or not a director. Can I take a wild stab in the dark here and guess at your company structure? You have one director(ie. the single director), Director A who owns 50% of the shares. You also have another person, I'll call this person Owner B, who IS NOT a director, but owns the other 50% of the shares.
I noticed this in the eligibility of the business savings account:
This product is not offered to any AFS licence holders and is not yet available to for companies with non-beneficial shareholders or those which have a significant shareholder who is not also a director
If my guess about your company structure above is correct, thats why your application was ruled ineligible, because you have a significant shareholder, Owner B, who owns 50% of the shares(ie. a significant shareholder), but is NOT a director.
I don't think there is anything stopping a company with a single director who also owns 100% of the shares from opening the business savings account with Macquarie. I have a couple of colleagues who have this exact setup and were the ones who recommended Macquarie to me in the first place.
@Kenb0: You guessed company structure right.
Yeah you're probably right. It was a few weeks ago and I've forgotten the specifics but that sounds familiar. I take back my original claim. Apologies for misleading. Still something for some to watch out for.
Websearch "alternative director" to answer your first question.
@fantombloo: Very interesting, thanks for the prompt to look it up, i learn something new every day and isn’t that what makes life wonderful!
I’ve run/had company structures as part of my investing/working life for 20 years now and have honestly never heard of an alternate director before and now I have. Like the name implies, it’s kinda like a “backup” director who can be appointed for a period of time to do stuff that a “normal” director can. But until they’re actually appointed as an alternative director officially, they’re just like any other person who’s not a director.
I’m wondering in your case, was your alternative director official(ie. logged against ASIC as the alternative director) or was it just the other shareholder who was potentially a candidate for alternative director but not actually appointed as such yet? Just trying to understand if Macq view official alternative directors as not permanent enough to suit their eligibility criteria.
@Kenb0: ASIC official.
In this case I and a partner share in a business. He does the day-to-day running of it, I just come and go as required - he doesn't need me to get various things done (like all directors signing a form), I don't need to be lumbered by that crap - but I'm ready for when he has an extended time away, etc.
@fantombloo: Awesome, thanks for the clarification. Sounds like an appropriate setup for your business and also good to know that Macq views that position the way they do just in case I ever make a similar appointment for any of my setups.
i think macquarie is pretty good
Edit - see above comment
Edit - see comment above commentAre you a sole trader? If so, just park it in a personal account
I am an ACN. Sole director so unfortunately the Macquarie Business account isn't an option
What about using a director loan account provided you take proper advice about Div 7A and how to avoid it?
Doesn't the director have to pay interest on this loan at an ATO prescribed rate? Which for FY ending Jun 2024 is a staggering 8.27%.
https://www.ato.gov.au/Rates/Division-7A---benchmark-interes…
@maverick1: Yes but you can repay the loan by the lodgement date and still avoid the imposition of Div 7A interest - get accounting/tax advice.
If you’re ACN, then you can open Macquarie cash management account(2.75% interest rate) in the name of the company and then link a cash management accelerator account to it(4.1%) which is what I think the other commenters are also saying.
You can use the cash management account as a business account, just won’t have a debit card facility on it, but to be honest, I’ve never used the debit card on my business accounts before.
Thankyou - I'll contact Macq and find out if I'm eligible for this setup!
@tommynolips: Can I ask why the macq business savings account(4.1%) isn’t suitable for your scenario?
Sole director so unfortunately the Macquarie Business account isn't an option
From the eligibility section of that product, it doesn’t mention anything about sole or multiple directors, just something about shareholders:
This product is not offered to any AFS licence holders and is not yet available to for companies with non-beneficial shareholders or those which have a significant shareholder who is not also a director.
Is it your ACN shareholder setup that’s causing the issue?
@Kenb0: There was a post above which stated the below:
Macquarie has a good looking account, can't remember the details now but I looked at it a few weeks ago. (Did not cater to single director entities where their shareholding is over 40% or something like that.)
edit: just checked the new comments above. i'm a sole director entity (ACN) and own 100% of the shares. hopefully this means i'm eligible. either way, i'll contact macquarie directly and confirm. thankyou everyone for the reccommendations
I've been getting 0% for the last 3 years with cba.
Added bonus you get to stand in line for over 20 minutes if you need to make an over counter deposit or withdrawal.
I used to get about $3 a month with around 59k in therecurrently with AMP, their saver account at 2.65%. There might be additional bonus for new signup's. Ideally want to switch to Macq at 4.1%.
Macquarie 4.1%, no fee