Smart Strategies for Managing Your Business Cash Reserves

Hello everyone,

I find myself in a fortunate position where my business has seen remarkable growth over the past few years. This success has allowed me to accumulate a substantial six-figure balance in my business account. Currently, I’ve transferred most of these funds into various business savings accounts, where I’m enjoying an interest rate of about 4%. However, I’ve noticed a trend indicating that many of these rates are soon to drop to around 3%.

Given this situation, I’m exploring the best avenues for maintaining and growing this cash reserve. I’ve maximized my pension contributions for the year and I typically draw a modest salary of £12,000, along with dividends totaling approximately £37,000 annually.

While I’m open to taking on a small level of risk, my primary objective is to adopt a conservative approach with the majority of these funds.

I would greatly appreciate any insights or recommendations. From my preliminary research and discussions with my accountant, it seems the options are somewhat limited, but I’m keen on uncovering any potentially overlooked strategies. If you’ve navigated similar circumstances, I’d love to hear how you managed your business finances effectively.

Thank you in advance for your advice!