Source: WikipediaHere’s a Tip:

Put your extra cash and sales to work for you by starting a high-yield checking/savings or money-market account. These high-yield accounts differ from a standard savings account in that they pay around 10x the the interest rate you would normally collect. This means that instead of earning a few pennies for having several thousand dollars in the account, you can actually earn real dollars… the more money you move into/through your account (increasing your average daily balance), the more interest you earn.

Paypal offers this service for its customers (you have to sign up), but can also go to E*trade, ING, and a host of other banks and financial firms. In my personal finances, I have an account with E*trade, but I use the PayPal money-market fund for CULT STATUS. Since I use paypal as my method of credit card processing, it was a natural step for Cult Status.

Some things to look for as you shop around:

1. Make sure that there are no account minimums –some accounts make you maintain a minimum balance, average balance, or otherwise adjust your interest rate based on the balance
2. Your interest rate (typically a variable rate) should be good in comparison to your savings account, and at least be on par with the national averages –as of this point in early 2008, you can expect interest in the 3-4% range. As the Prime Rate goes back up, the interest rates will climb to 5%-7%. Most banks give 0.12%-.25% on a standard savings account at the moment.
3. Make sure that are no fees or penalties for adding money or taking it out. Federal government regulations limit the number of times you can take money out of a savings account to 6 times. Some high-yield savings accounts will have this rule.
4. Do remember that you have to pay tax on interest earned, because it’s income. It’s best to speak to an accountant or tax specialist to learn ways to minimize your tax burden. If you make money and spend money with your musical group (even if you don’t have legal business entity or Tax ID), you should claim all your income and losses on your tax forms. Chances are, you’ll end up with more deductions than you think. (you can even deduct going out to other shows as business expense) Go to irs.gov for more info.

The more organized you are with your band’s finances, the better your group will be in the long-term. Stay ahead of the debt cycle by putting your band’s extra dollas to work for you… especially when you’re in a slower period.

Now who would have ever thought that you can run your rock band like a business?!?! (oh yeah, that was some sarcasm on my behalf)