Thanks for sharing this. I that info about good financial practices are being shared here. I have two questions that you might be able to answer.
First, what specific options are available? As an individual I can open a high yield savings account with Ally (or I can refer to NerdWallet for a list of other high yield savings accounts). But If I am running an NGO I can’t legally use accounts intended for individuals, right? Could you provide a list of options?
Second, these ideas are fairly limited to cash held in USD in the United States, right? For organizations that have operations (and thus which keep funds) in other countries and other currencies, are you able to recommend any options? I am concerned that both the lack of high yield savings accounts in those countries and the cost of international transactions would prevent organizations from using this method.
First, what specific options are available? As an individual I can open a high yield savings account with Ally (or I can refer to NerdWallet for a list of other high yield savings accounts). But If I am running an NGO I can’t legally use accounts intended for individuals, right? Could you provide a list of options?
Exactly, in most jurisdictions, NGOs must create savings accounts meant for organizations. In the United States, those accounts would be called business savings accounts. In the U.K., those accounts would be called charity savings accounts, but some business savings accounts might work depending on the terms and conditions.
Second, these ideas are fairly limited to cash held in USD in the United States, right? For organizations that have operations (and thus which keep funds) in other countries and other currencies, are you able to recommend any options? I am concerned that both the lack of high yield savings accounts in those countries and the cost of international transactions would prevent organizations from using this method.
The ideas expressed here are applicable to any country that has accounts or investment options available that pay more interest than the default accounts in use by most people/organizations. This likely holds true for most/all countries that have an established financial system.
In terms of offering recommendations, it would depend on the currency and country in question. The Flagstone option I mentioned in earlier comments works for GBP, EUR, and USD (they may be limited to UK-based clients, I don’t recall off the top of my head). Feel free to mention specifics in a follow-up comment or email us at support@antigravityinvestments.com. I’ve historically researched the US, UK, and Canada, but I’ll see what we can do if there’s another country in question!
For countries that have less established financial systems, I agree, they may be unable to find a suitable alternative in their base currency that pays a high rate of interest, or be unwilling to take on currency risk and currency conversion costs by opening an international account likely denominated in another currency.
Besides opening an international account in USD, for instance at StoneCastle, an organization could also open an account at a brokerage firm that supports international clients like Interactive Brokers (I believe they support 19 currencies) and access various investment options. That is getting to a pretty high level of complexity though.
Thanks for sharing this. I that info about good financial practices are being shared here. I have two questions that you might be able to answer.
First, what specific options are available? As an individual I can open a high yield savings account with Ally (or I can refer to NerdWallet for a list of other high yield savings accounts). But If I am running an NGO I can’t legally use accounts intended for individuals, right? Could you provide a list of options?
Second, these ideas are fairly limited to cash held in USD in the United States, right? For organizations that have operations (and thus which keep funds) in other countries and other currencies, are you able to recommend any options? I am concerned that both the lack of high yield savings accounts in those countries and the cost of international transactions would prevent organizations from using this method.
Thanks for commenting!
Exactly, in most jurisdictions, NGOs must create savings accounts meant for organizations. In the United States, those accounts would be called business savings accounts. In the U.K., those accounts would be called charity savings accounts, but some business savings accounts might work depending on the terms and conditions.
For the U.S., here’s a link to some examples of business savings account (online sources may be somewhat biased in choosing recommendations due to affiliate links, although this source seems decent): https://www.magnifymoney.com/blog/best-of/best-business-savings-accounts625269146/
The ideas expressed here are applicable to any country that has accounts or investment options available that pay more interest than the default accounts in use by most people/organizations. This likely holds true for most/all countries that have an established financial system.
In terms of offering recommendations, it would depend on the currency and country in question. The Flagstone option I mentioned in earlier comments works for GBP, EUR, and USD (they may be limited to UK-based clients, I don’t recall off the top of my head). Feel free to mention specifics in a follow-up comment or email us at support@antigravityinvestments.com. I’ve historically researched the US, UK, and Canada, but I’ll see what we can do if there’s another country in question!
For countries that have less established financial systems, I agree, they may be unable to find a suitable alternative in their base currency that pays a high rate of interest, or be unwilling to take on currency risk and currency conversion costs by opening an international account likely denominated in another currency.
Besides opening an international account in USD, for instance at StoneCastle, an organization could also open an account at a brokerage firm that supports international clients like Interactive Brokers (I believe they support 19 currencies) and access various investment options. That is getting to a pretty high level of complexity though.