It’s likely that since the Silicon Valley Bank collapse in March, you are fielding more questions than usual from small business clients about measures they should be considering to protect their bank accounts. It’s tax season so you don’t have extra time to be researching this topic. We’re always thinking of ways to support our CPA network, so here are seven ideas CPAs can share with business and individual clients.
Guidance on how to protect bank accounts
If you have bank accounts with more than $250,000, it's important to protect your funds. It’s always a good time to make sure your financial plan is in place. As a business owner, a review of your accounts and processes will ensure you are prepared for whatever might happen. Protecting yourself, your business and your employees from scams, phishing attempts and banking changes will help to protect your funds.
Here are some ways to do protect bank accounts:
FDIC Insurance: The Federal Deposit Insurance Corporation (FDIC) insures deposits of up to $250,000 per depositor, per FDIC-insured bank. Make sure your bank is FDIC-insured and that your deposits are within the insured limit.
- Diversify your accounts: Consider spreading your deposits across different banks or different types of accounts, such as checking, savings, and certificates of deposit (CDs). This way, if one bank fails, you won't lose all your funds.
- Understand bank ratings: Check the financial health of your bank by reviewing its rating from a reputable credit rating agency. A high rating indicates that the bank is financially stable and less likely to fail.
- Monitor your accounts: Regularly review your bank statements and account balances to make sure there are no unauthorized transactions or errors.
- Use strong passwords and two-factor authentication: Create strong passwords for your online banking accounts and enable two-factor authentication. This adds an extra layer of security to your accounts. Consider using a password manager to help securely keep track of all your passwords.
- Be wary of phishing scams: Be cautious of emails, texts, or phone calls that ask for personal or financial information, or changes to direct deposits for employees. Don't click on links or provide any information unless you are certain it is legitimate. If an employee asks for a direct deposit change over email, pick up the phone and speak with them directly to confirm any banking changes prior to contacting your payroll company.
- Seek advice from a financial advisor: Consult with a financial advisor to discuss strategies for protecting your wealth, including diversification and risk management.
At ConnectPay, security is our top priority. Helping small businesses succeed and prepare for any occasion not only helps protect payroll, but also the business itself.
Drew Schildwachter is the Chief Operations Officer for ConnectPay. Drew joined the team in 2014 with years of experience as a contractor, video retail franchisee partner, operations director, and turnaround specialist for small businesses. Drew specializes in communicating with entrepreneurs about industry challenges that they encounter, and how aligning the best practices in payroll and business administration can alleviate pain points for small business owners.