Are you a business owner looking for a place to park your company's excess cash? Brokerage accounts are great for that, giving you the chance to earn yields on low-risk assets or even on cash.
LYNX is a reliable broker to deposit your company's money, but there are better alternatives when it comes to costs or robustness of service. Check the best of these, or read on for details and comparisons.
I've reviewed dozens of brokers with retail investors in mind, but now I decided to size up whether they're also suitable for businesses. LYNX left me with mixed feelings:
- LYNX is a trustworthy broker that also offers investor protection.
- Trading fees at LYNX are average; it also charges an inactivity fee.
- You can earn interest on your uninvested cash at LYNX.
- See the top brokers for business investment accounts for better alternatives.
Before we begin, let's see if LYNX is available in your country
LYNX is a trustworthy broker
Choosing a legit and reliable broker is a top priority if you're a private investor. And maybe it's even more so if you're looking to manage and invest the cash holdings of a business that is responsible for the financial security of its employees and the prosperity of its shareholders.
We at BrokerChooser only recommend brokers that are regulated by at least one top-tier financial authority. Regulation by these bodies should ensure that the broker complies with relevant legal requirements and operates in a fair and transparent way. This, in turn, helps to protect account holders like you and maintain the integrity of financial markets as a whole.
LYNX has a long track record, having been around since 2006
Solid regulation is a must; but using a broker with sound and sustainable business practices can add another layer of security for your company's funds. Ideally, you'd want your broker to remain in business for at least as long as you keep your money there.
But how can you tell that in advance? In our view, a long and unblemished track record is a good sign of a broker's durability. So if you want to sleep well, choose a well-established broker to park or invest your company's funds.
LYNX offers investor protection
If something does go wrong with your broker, it's good to have a mechanism in place that can help you recover some or all of your funds. Thankfully, some countries and regions - including the US, the UK and the EU - operate investor protection schemes designed to protect securities and cash you keep in brokerage accounts. This is similar to how national deposit protection funds help guarantee bank deposits in case of bank failures.
Thankfully, such investor protection is available for clients of LYNX, at least under the relevant jurisdictions. Check the table below for details, and to see how LYNX compares to some close competitors in other regulation-related respects.
Trading fees at LYNX are average
If you don't just want to park your company's excess cash on your LYNX account but also plan to invest part or all of it, you will likely face some trading fees. These can be flat or percentage-based fees, or a combination of the two.
In the table below, I collected trading fees for some asset types typically favored by corporate account holders, such as ETFs (exchange-traded funds), mutual funds or bonds. In these examples, I calculated fees for a $2,000 trade in the case of stocks, ETFs and mutual funds; and for a $10,000 trade in the case of bonds.
Earn interest on uninvested cash
Trading profits are the most typical way to earn money if you hold a brokerage account, but an increasing number of brokers now also pay interest on your uninvested cash. This makes some brokers a viable alternative to bank accounts even for businesses, at least as far as interest earned on deposits is concerned.
LYNX has also joined this trend; the interest it offers is, on the whole, below average when compared with the rest of the brokerage market.
Opening and maintaining your corporate account at LYNX
Opening a bank account for your business can be a pain, with lots of paperwork and an inevitable visit to a brick-and-mortar branch. Opening a business investment account at an online broker is much easier, but it does take a bit of time and varying degrees of hassle.
Once your account is up and running, you may face additional costs unrelated to trading and investing. These can include an inactivity fee, charged if you fail to use your account for an extended period of time; or withdrawal fees charged when you take out money from your brokerage account.
Check the table below for these and other aspects that can affect your experience at LYNX when holding a corporate account.
For a more detailed overview of LYNX's fees, account opening experience, funding options and platform features, check our full LYNX review.
Choosing our own business investment account
So why - and how to - choose a business brokerage account? Bank accounts are the default choice for most businesses to park their cash reserves, but brokerage accounts may offer better returns at similarly reasonable risk, and it's relatively easy to open one and carry out transactions. Here's how we went about it ourselves at BrokerChooser.
As any prudent business, we wanted to keep our cash reserves safe while also earning a modest return. We were looking for a broker with solid regulation that also offered investor protection for invested assets and cash. It was also important for us to choose a broker (and assets) where we'd be able to quickly convert our investments to cash (two days max). And obviously, we were looking for brokers that were available in the country where our company is registered.
Once settling on a broker, it's up to you to craft your investment policy, based on your risk tolerance, the size of your cash reserves and other factors. In our case, we wanted to avoid foreign currency exposure and find assets (and broker accounts) in the same currencies as our cash reserves. We sought to diversify our investments and set a maximum % that we would invest into a single asset. We also looked to minimize costs; and pledged to review our investments from time to time.
Of course we're not here to give you advice on what assets to invest in. Like many companies in our situation, we eventually zeroed in on a combination of money-market and bond ETFs on US and EU markets, while also leaving some cash uninvested so that we could earn simple interest.
The best brokers for business accounts
Before settling on LYNX, I suggest you check out BrokerChooser's list of the best brokers for business investment accounts to see if you can find a better provider.
So how did we pick the best brokers for business accounts? Our expert team of analysts looked at hundreds of features and data points at 100+ online brokers to see which ones have products suitable for low-risk cash management, the most robust regulation, the lowest trading fees, the highest interest on uninvested cash and the best overall user experience.
Check out this short video for a behind-the-scenes peek into how our experts personally test and evaluate brokers.
Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.
