Ensure your business funds are FDIC-insured by utilizing treasury management services

No matter the size of your business, one thing is certain — keeping your funds FDIC-insured is always top-of-mind.

“We understand how important it is for business owners to keep their deposits safe, especially through any uncertainties,” says Alix Kaufmann, VP, treasury management leader at First Federal Lakewood. “That’s why we always encourage them to take advantage of treasury management services, especially ICS/CDARS products, to have peace of mind.”

Smart Business spoke with Kaufmann about how businesses can keep their funds FDIC-insured with Insured Cash Sweep (ICS®) and Certificate of Deposit Account Registry Service (CDARS®) through the IntraFi® network, and what other treasury management services they can utilize.

How do ICS/CDARS services make sure money is FDIC-insured?

ICS/CDARS services give business owners the opportunity to diversify their large deposits quickly and efficiently. When large deposits are placed at participating IntraFi network banks, ICS/CDARS places that money into other financial institutions within the same network — all through one relationship with their main bank. This means their money is divided into FDIC-insured amounts at or under $250,000.

What are some misconceptions about these services?

The most common misconception about ICS/CDARS services is that a business’s deposits aren’t easily accessible. Business deposits sit in the available balance and are usable when needed. Plus, making transfers is simple since they can be done any time of day.

Another misconception is that there are monthly service fees associated with ICS/CDARS services. There are no service fees to take advantage of these products.

What other treasury management services should businesses consider?

Treasury management services provide the tools to take your business to the next level by saving time, streamlining workflow and preventing fraud. From ACH origination to Positive Pay and zero balance accounts, there isn’t a shortage of useful and time-saving treasury management services. Plus, utilizing these services may alleviate inefficiencies within the cash management and accounting sides of your business.

One service that helps with managing cash flow is ACH origination, which electronically issues payments to or from an external account as a same-day transaction. ACH also keeps your company’s information protected because it travels through an encrypted system.

If you want to stay ahead of fraud, Positive Pay helps save you time and money by monitoring your account for both checks and ACH transactions. This service makes sure you’re paying the right person the right amount by alerting your banker which companies, vendors or individuals need access and are allowed to take money from your account.

Being short on time is a common struggle for many business owners. When looking for a banking partner, it’s important to understand if they have remote deposit available. This helpful tool allows you to scan multiple checks at a time using a machine that’s connected to your computer — saving time and a trip to the branch.

Additionally, some treasury management tools have a reporting aspect that can be incorporated into QuickBooks®, meaning that when transactions have cleared your account, or payments have been stopped or voided, the treasury management system will also register that change. This efficient service helps you determine which items marked in QuickBooks are clearing or being rejected. Plus, QuickBooks syncs and streamlines transaction information while eliminating manual accounting tasks, saving you even more time.

Lastly, zero balance accounts can help by removing manual work and are beneficial if you have multiple accounts that you use for operating transactions, payroll and other miscellaneous pay tables. Zero balance accounts are designed to prevent overdrafts and manual transfers while carrying a zero balance.

Overall, treasury management services are designed to help make your life easier. The right banking partner will help guide you toward the best service for you. ●

INSIGHTS Banking & Finance is brought to you by First Federal Lakewood

Alix Kaufmann

VP, treasury management leader


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