Structured Deposits for Business Savings Accounts Explained

The Structured Deposit Account

A structured deposit account is a long term account, usually with a 3 to 6 year term. During this term, the investor has no access to any of the funds. However, a structured deposit account guarantees the return of capital to the investor upon the maturity date, and has the potential to earn considerably more interest than a normal savings account because of its investment component.

There are many types of structured deposit accounts, with the main difference between them being what the investment component has as its underlying investment. There are index based structured deposit accounts in which the investment arm is tied to an index, such as the FTSE 100. There are also commodity based structured deposit accounts, in which the investment arm is tied to a particular commodity, such as silver or gold.


The Business Savings Account

A savings business account is simply a savings account for a business. They are similar to normal accounts except that they are owned by the business itself and not any of the individuals within the business personally. Many times business accounts will offer a slightly higher interest rate than personal savings, although this is not necessarily true on all accounts.


Structured Deposit Business Savings Accounts

Combining the two ideas of deposit and all the business savings gives you a structured business saving account. This type of saving account holds many advantages for a business, while one or the other may not necessarily.

Savings which pay around 1% interest (an average on the going market rate at the time of this writing), are hardly worth it to the successful business owner, who would much rather reinvest his or her funds back into the business for returns far outstripping many saving accounts. Most business accounts are held solely for the purpose of emergency funds, and rarely tapped.

However, if the idea of the structured deposit is combined with the business account, now the business owner has a much better chance of seeing a good return on money that he or she would not have used anyway. And with the guaranteed return of capital, this tends to be a good investment for the business owner with expendable income.

The downside is that funds cannot be accessed by the business owner during the term of the structured deposit. However, as most business owners are funding this account with money that they do not need in the short term, this is a moot point. Business owners must be very careful to make sure that the funds that go into it one is truly expendable, and always to have emergency cash available.