How Companies Can Keep More Cash Insured

How can a company, nonprofit, or foundation make the most of its cash? It’s even easier to do now that Max partner American Deposit Management Co. has raised the rates it offers to Max members on FDIC-insured corporate deposits.

Now Max members using ADM’s AMMA savings account for their institutional cash will earn 0.85% — 85 basis points — on up to $25 million of cash, all FDIC-insured. That’s a considerable boost over most business bank accounts that pay close to zero.

As the Federal Reserve has raised rates over the past year, bank depositors have been among the last to benefit — but Max members have been able to take advantage of higher rates automatically. Now institutional clients can also enjoy higher rates.

To a corporate or nonprofit treasurer, or the trustee of a trust, this incremental interest income can make a significant difference. On every $1 million, that’s $8500 in interest each year, in perpetuity. In a regular business-savings account, that money would earn next to nothing.  Moreover, most bank accounts are insured to only $250,000, while the AMMA account can provide up to $50 million in insurance coverage.

Many companies and nonprofits are constrained when it comes to how they invest their cash, preferring safe and liquid instruments over riskier bets. They may use their cash for working capital, or may be required to keep in cash any funds they’ve raised from investors or donors.  

In these situations, it’s crucial to make sure this cash is safeguarded under FDIC protections, which are limited to $250,000 per depositor, per account type, per institution. When Max members use ADM for their corporate cash, they know their money is spread across multiple banks to maximize FDIC coverage.

We at Max use ADM’s solution for our own corporate cash, so we know how useful it can be. Many of our members, who find Max helpful for the cash they hold as individuals, also use ADM to manage cash for their companies, trusts, foundations, nonprofits, or residential associations, including co-ops. And financial advisors, who already use Max to help their clients earn higher yield on cash, often find they can add more value to their client relationships by delivering better solutions for corporate cash as well.

Learn more at MaxForBusiness.com.

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