Are you looking to start or grow a business? Opening a business savings account can offer federal protection for the funds you deposit (up to $250,000) and provide a source of liquidity when inevitable expenses arise. You can earn interest while setting aside money for capital improvement or income taxes. A commercial savings account can add credibility to your business, arm you with a business debit card and help your cash flow.
The best way to choose an account that fits your needs is to start by comparing the annual percentage yield (APY) offered by banks and credit unions. Then look for benefits that might make the account attractive based on your needs. Is there a monthly maintenance fee or a minimum deposit to open? Does the bank provide ample access to ATM and online account services?
Deciding which business savings account is best for your needs can be a difficult process, but hopefully this roundup of our picks for best savings accounts will help give you a head start.
|LendingClub||2.07% on all balances|
|Prime Alliance Bank||2.26% on balances $200,000 and over; 2.10% on balances starting at $100,000 but below $200,000; 1.90% on balances below $100,000|
|Live Oak Bank||2.00% on all balances|
|American Heritage Federal Credit Union||1.80% on balances $10,000 and above|
|First Internet Bank||1.71% on all balances|
|Financial Resources Federal Credit Union||1.30% on balances $100,000 and over; tiered APYs ranging from 0.60% to 1.21% for balances below $100,000|
|Greenwood Credit Union||0.35% on balances $100 and above|
|Premier America Credit Union||0.30% on all balances|
|TAB Bank||0.25% on balances $1 and above|
|Service Credit Union||0.25% on balances $50 and above|
Although LendingClub’s High Yield Savings account needs to be opened manually over the phone — it cannot be opened online — the hassle may be well worth their APY offer on all balances. You also won’t find too much information on their business page, but the account and rate are the same as their personal account of the same name. The minimum deposit is $100, but after that, there’s no minimum to earn. You’ll pay no monthly fee, and an ATM card is available free.
Located in San Francisco, LendingClub has been in business since 2007.
Restrictions on joining: This account is available to all U.S. residents.
Prime Alliance Bank is currently offering a competitive APY of 1.90% for balances starting at just $1 for its Business Savings account. If you have more cash to stash, though, you’ll be rewarded with an even higher APY. Balances between $100,000 and $199,999.99 earn an APY of 2.10%, while balances of $200,000 or more earn an APY of 2.26%.
This account does not require any minimum balance to maintain the account (but you’ll want to have at least $1 in the account to keep earning), and it does not have any monthly maintenance fees. Additionally, Prime Alliance offers unlimited deposits and up to six transfers or withdrawals per month.
Restrictions on joining: None.
Live Oak Bank awards a 2.00% APY on its business savings account. There is no minimum opening balance or deposit required to open a business savings account.
The business savings account is open to deposits of up to $5 million and is free of monthly maintenance fees. You may make up to 6 withdrawals from your Live Oak Bank Business Savings account per statement cycle, including preauthorized, automatic and telephone transfers. After that there’s a $10 fee per withdrawal.
Live Oak Bank was established in 2008. The bank is in Wilmington, N.C., and is a member of the FDIC.
Fine Print: The bank may verify credit and employment history at its discretion, meaning you may receive a pull against your credit report.
Restrictions on joining: none.
American Heritage Federal Credit Union’s High-Yield Business Savings account falls just about in the middle of the pack with their current APY. You’ll need to open the account with a steep sum of $10,000 and maintain at least that balance to earn — and if your daily balance falls below that, you’ll incur a $10 fee. The account is available for small and large businesses, and they also offer money market and certificate options.
Philadelphia-based American Heritage was established in 1948.
Restrictions on joining: If you live outside the Philadelphia area, your best bet to join American Heritage is to become a member of the Kids-N-Hope Foundation.
First Internet Bank offers an FDIC-insured savings option for businesses with a good 1.71% APY. You only need $100 to open the account but you must maintain an average daily balance of $1,000 to avoid a $2 monthly maintenance fee.
Unlimited deposits can be made each month and six transfers or withdrawals are allowed without charge. Keep in mind that the FDIC only insures up to $250,000. So, if you deposit more than $250,000 into the business savings account, the excess deposit amount will not be insured.
The First IB ATM cards are offered to sole proprietors only. There is no charge for ATM transactions or electronic statements. Founded in 1999 First Internet Bank operates completely online.
Restrictions on joining: none.
Financial Resources Federal Credit Union offers a premium tiered rate account, dubbed its Business Purple Savings account. The rates for all of the tiers are as follows:
This account requires a Financial Resources Membership Savings account in the name of your business, with a minimum balance of $10.
Restrictions on joining: To join, you must also join the American Consumer Council or meet other eligibility requirements.
Greenwood Credit Union’s Business Share Savings account is currently featuring an APY of 0.35%. While there is a low minimum deposit of just $5 required to open this account, a minimum of $100 is required to start earning the APY. This account does not come with any limits on deposits or withdrawals, but it does come with a free business ATM card that can be used at 30,000 fee-free ATMs. Note: This account isn’t available to open online, so you’ll need to call their member service department during regular business hours to get set up.
Greenwood is based in Warwick, R.I. Membership is open to anyone who opens and maintains a share account with a minimum deposit of $5. Membership will then give you access to all of their business banking products.
Restrictions on joining: none.
Premier America Credit Union is currently offering an attractive rate of 0.30% on its Business Savings account. There is a required minimum deposit of $250 associated with this account. There are no maximum limits listed.
Premier America Credit Union has physical branches in California and Texas, but offers its products and services nationwide online.
Restrictions on joining: You can join through a charitable contribution or by meeting other eligibility requirements.
TAB Bank’s Business Savings account is currently featuring a decent APY of 0.25% with a low minimum deposit of just $25, and a low $1 minimum daily balance required to earn the APY. There is no maximum limit listed for its Business Savings account. The downside: The account doesn’t come with an ATM card.
TAB Bank is based in Ogden, Utah, but offers its services and products nationwide online.
Restrictions to joining: None.
Currently, Service Credit Union is offering a 0.25% APY on funds in its Business Savings account, as long as you maintain a daily balance of at least $50. Additionally, Service Credit Union offers a Business Secondary Savings account, with the same APY, if you want to save for multiple goals at the same time.
There are no monthly fees on the business savings account. Both accounts offer online banking and remote deposits. The credit union, located in New Hampshire, was established in 1957 to support military personnel.
Restrictions to joining: You will need to join the American Consumer Council if you don’t qualify through the military, Department of Defense or a select employee group. If you use the code “Service,” the council membership won’t cost you anything.
To come up with this list, we first used data from DepositAccounts.com, which tracks rates on a range of deposit accounts across thousands of banks in the U.S. Note: DepositAccounts is also owned by MagnifyMoney’s parent company LendingTree.com.
We eliminated any institutions that were given a health rating below a B by DepositAccounts. We also weeded out any credit unions that have very restrictive membership requirements. From there, we chose the top 10 business savings accounts with the highest APY. And lastly, all the banks on our list offer FDIC or NCUA insurance.
Business and regular savings accounts may offer many of the same features, such as 24/7 online banking, free electronic reporting, debit cards, fund transfers and ATMs.
The trade-off in choosing a business account is that you’ll get services focused on business planning and spending in exchange for a less-desirable APY.
When you compare the interest earned on a business savings account with the best rates offered on savings accounts, it may not look like opening a business account is a wise strategy. The top business savings account APY right now is 1.26%. The top APY among personal savings accounts is 1.66% with no minimum deposit and ATM access. You can weigh the services, charges and minimum account fees between the top business and top personal savings accounts to decide which is best for you.
There are other benefits to offset any differences in earnings, particularly if your business is incorporated. It’s considered sound business practice to separate your personal saving and checking accounts from your business saving and checking accounts. A business account can help you manage cash flow, accounting, record keeping and working capital. At income tax time, separate accounts can help you differentiate business from personal expenses.
Paired with a business checking account, your business savings account can add professional branding, since all payments and correspondence with clients will bear your business name.
Or you can create savings in your business account to pay quarterly income taxes or purchase equipment.
Finally, business savings accounts are secure when you open accounts with banks and credit unions that are insured up to $250,000 per account by the FDIC or the NCUA.
When evaluating a financial institution for your business, there’s more than just finding a good APY.
Many banks look great on the APY front but carry fees that can eat into any of the returns you might make. Particularly, watch out for fees for bank withdrawals, monthly service fees and ATM fees.
The Small Business Administration (SBA) has identified the key factors to consider when searching for the right bank or credit union. These include: