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 should 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.
The best business savings account rates — January 2021
Source: Deposit Accounts, January 13, 2021
1. Dedicated to Businesses: Live Oak Bank, 0.60% APY, No minimum balance
Live Oak Bank awards a 0.60% 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 Savings account per statement cycle, including pre authorized, automatic and telephone transfers. After that there’s a $10 fee per withdrawal. Live Oak Bank, established in 2008, holds assets of $2.12 billion.
The bank is in Wilmington, N.C., and is a member of the FDIC. Learn more about business savings at Live Oak Bank.
Small 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.
2. First Internet Bank, 0.40% APY, No minimum balance, ATM services
First Internet Bank offers an FDIC-insured savings option for businesses with a good 0.40% APY on any balance amount. You only need $100 to open the account. There is no minimum balance to deposit or maintain the account to earn the APY.
While it only costs $100 to open your business savings account and 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 by the FDIC.
The First IB ATM cards are offered to sole proprietors only. There is no charge for ATM transactions or electronic statements. Founded in 1999 by the First Internet Bancorp, First IB offers remote banking in all 50 states.
Fine print: Only six preauthorized, automatic, PC, or telephonic transfers are allowed each month. This restriction is common among most of these institutions, however, First Internet Bank will charge you $5 per item if you go beyond the allotted six.
Restrictions on joining: none.
3. Axos Bank: 0.50% APY, no minimum balance, ATM access
Axos Bank, formerly known as BofI Federal Bank offers one of the top APY rates in our nationwide survey of business savings accounts. The bank’s Business Premium Savings Account with a high-yield 0.50%APY can be opened with a $25,000 minimum deposit. While this account requires no minimum balance, interest is only doled out on funds of $24,000 and up.
Axos Bank also makes it easy to access your funds when you need it. Customers have ATM access to their accounts along with free online banking. However, ATM withdrawal limits are $1,010 per day and there’s a daily purchase limit of $5,000. BofI is an FDIC-insured bank based in San Diego and publicly traded online. Other products include Business Interest Checking and Business Money Market accounts.
4. Presidential Bank (Maryland), up to 0.50% APY, $5,000 to open, ATM services
Presidential Bank’s Commercial Premier Savings account offers 0.50% APY for balances up to $35,000, making it a decent — if not extraordinary — bet for business owners.
Business customers are not required to maintain a minimum balance on the account in order to receive all ATM privileges. So long as you use one of their ATMs you won’t incur fees, but there is a $0.75 ATM fee for non-network ATMs. Free online banking, mobile banking and ATM card come with the account.
Established in 1985, Presidential Online Bank was one of the first lenders to offer online banking. Located in Bethesda, Md., it currently lists assets in excess of $550 million.
Restrictions on joining: none.
5. Financial Resources Federal Credit Union, 0.40% APY, $10,000 to earn APY
Financial Resources Federal Credit Union offers a premium tiered rate account, dubbed its Business Purple Savings account. The sweet spot of this account applies to balances between $10,000 and $49,999, which rewards you with an APY of 0.40%. The rates for all of the tiers are as follows:
- $0 – $499: 0.05%
- $500 – $9,999: 0.35%
- $10,000 – $49,999: 0.40%
- $50,000 – $99,999: 0.50%
- $100,000 and more: 0.60%
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.
6. Premier America Credit Union, 0.30% APY, $250 to open
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 minimum or 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: To join, you must also join the Thousand Oaks Alliance for the Arts or meet other eligibility requirements.
7. Prime Alliance Bank, 0.25% APY, $1 minimum balance
Prime Alliance Bank is currently offering a competitive APY of 0.25% 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 earn an APY of 0.45% while balances of $200,000 or more earn an APY of 0.60%.
The Business Savings Account does not require any minimum balances, 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.
8. TAB Bank, 0.25% APY, $25 minimum to open
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.
TAB Bank is based in Ogden, Utah, but offers its services and products to consumers nationwide online.
Restrictions to joining: None.
9. Service Credit Union, 0.25% APY, $50 minimum to earn APY
Currently, Service Credit Union is offering an attractive 0.25% APY on funds in its Business Savings account, as long as you maintain a daily balance of at least $50. This account features no monthly fees. Additionally, Service Credit Union offers a Secondary Business Savings account, also with a 0.25% APY, if you want to save for multiple savings goals at the same time.
Membership to Service Credit Union is open to anyone who also joins the American Consumer Council.
Restrictions to joining: Join the American Consumer Council
10. Greenwood Credit Union, 0.25% APY, $100 minimum to earn APY
Greenwood Credit Union’s Business Share Savings account is currently featuring an attractive APY of 0.25%. 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.
Membership to Greenwood Credit Union is open to anyone who simply opens and maintains a Share account with a minimum deposit of $5.
Learn more about business savings accounts
How we ranked the best business savings accounts
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 savings accounts vs personal savings accounts
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 ATM machines.
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 1.40%. The top APY among personal savings accounts is 0.60% 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, recordkeeping 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.
North Shore Bank of Brookfield, Wis., says that a business savings account can boost your credit ratings and make it easier to obtain a business loan, since the lender can see you have an account dedicated to your company.
Choosing the right business savings account
When evaluating a financial institution for your business, there’s more than just finding a good APY.
Many of the banks on our Top 10 list 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 ATM or 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:
- Customer service reputation
- Access to branches or no-surcharge ATMs
- Benchmarks to have fees waived
- Automatic FDIC insurance