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Updated on Sunday, August 1, 2021
You’ve poured your heart and soul into the small business you founded, but when it comes to financing day-to-day operations, you’ll need to strictly separate your personal wealth from your business funds. A business money market account can help provide a safe place for your company’s cash, allowing it to earn relatively high interest while still remaining liquid enough to take care of business expenses.
Scouring our database for the business money market accounts that earn the highest APY and are available nationwide, we’ve come up with the best places for you to keep the money that funds your business.
The best business money market accounts
Workers Credit Union — Business Money Market
To earn this list-topping APY, you’ll need to keep a balance of $10,000 in your money market account with Workers. But if you have less to spend — even far less — you’ll still earn at a rate that makes our list. With as little as $50 you’ll get a great rate, but you do need to open your account with a minimum of $1,000. There’s also a $5 monthly maintenance charge tacked on, but that fee is waived for daily balances of $500 and over.
Massachusetts-based Workers Credit Union offers membership to anyone through a charitable contribution to United Way of North Central MA, and they’ll even make that donation for you.
Service Credit Union — Business Money Market
For a minimum investment of $25,000, your money will earn at this APY. If you need to scale that back, you’ll still get a rate that still makes our top 10 for any amount of $2,500 and over. This is just one business savings product offered by Service Credit Union. You can also get a savings, secondary savings or CD for your business funds.
Membership is open to active duty military, veterans and their families, as well as employees and former employees of the Department of Defense and their families. You’re also eligible for membership if you join the American Consumer Council; if you use the promo code “Service,” membership is free.
Premier America Credit Union — Business Tiered Money Market
The more you can contribute to this tiered money market account, the higher APY you’ll earn. To get this APY, you’ll need to invest between $25,000 and $100,000. Anything less (but still above $2,500) will still get you an APY that would make this list.
Premier America has been around since 1957 and can easily be joined outside California through membership to the Thousand Oaks Alliance for the Arts.
Wings Financial Credit Union – Premium Business Money Market account
Wings Financial Credit Union offers this attractive APY on balances of $25,000 and up. The higher your balance is, the higher your APY will climb. To open a business money market account at Wings, your business must be located in an eligible county or school district or 50% of all owners must qualify for a Wings membership.
Wings Financial Credit Union opens its membership to people who are also members of the Wings Financial Foundation.
First Internet Bank — Business Money Market Savings
This online-only bank has a real knack for offering customers competitive rates with its money market accounts, and its business product doesn’t stray from the pattern. Account holders can expect this competitive 0.40% APY as long as they make the minimum deposit of $100 to open the account. There’s no minimum balance needed to earn the APY, but the bank will charge a $5 monthly fee if the average daily balance for that month falls below $4,000.
Bethpage Federal Credit Union — Business Money Market Account
Based in Bethpage, N.Y., the most accessible and easiest way to join this credit union for everyone in the country is to simply open a special $5 savings account that makes you a member. This will allow you to open the product you really came here for — the Business Money Market Account.
With a minimum deposit of $500, customers opening this account earn the full APY on the entire balance. While the minimum balance required for this APY is only $500, customers will be charged a $20 monthly fee for not having an average daily balance of at least $2,500.
Affinity Federal Credit Union — Business Money Manager
A balance of just $2,500 earns you the APY on Affinity Federal Credit Union’s Business Money Manager Account. You need at least $2,500 to open this account, and you’ll get hit with a $10 monthly fee if your average daily balance falls below that amount on any given day.
As a credit union, Affinity requires you to become a member before you can open an account, including the Business Money Manager Account. One way to join is by making a $5 donation to the New Jersey Coalition for Financial Education or Connecticut Jump$tart.
Hyperion Bank — Business Money Market
You’ll earn this rate on any amount from one cent all the way up to $2 million. Past that amount, the rate takes a dive. You’ll want to keep at least $1,000 in the account, though, because if it dips below that threshold, you’ll be charged a $10 monthly service fee.
Based in Philadelphia, Hyperion was established in 2006 to support Philly neighborhoods.
Pawtucket Credit Union — Business Money Market
Pawtucket Credit Union’s Business Money Market account is currently offering its competitive rate on balances of at least $10,000. Accounts with balances lower than $10,000 will earn a much lower APY that wouldn’t make this list. There is a $2,500 minimum deposit required to open this account.
Based in Rhode Island, Pawtucket Credit Union offers its services nationwide, online. Membership to the credit union is open to anyone who opens and maintains a share savings account with a minimum of $5.
Northpointe Bank — Business Money Market Account
Among its array of products, Northpointe Bank offers a tiered business money market account. Currently, the rates for that account are as follows:
- $0 to $2,499.99 earns 0.20% APY
- $2,500 to $24,999.99 earns 0.25% APY
- $25,000 to $499,999.99 earns 0.35% APY
- $500,000 and over earns 0.30% APY
There is a $1,000 minimum required to open a business money market account at Northpointe. This account offers unlimited in-person transactions.
Business money market accounts vs. business savings accounts
Since both business money market accounts and business savings accounts earn a comparatively high interest rate and give you a place to deposit your business funds separate from your personal money, how should you go about choosing between the two products? While nothing is wrong with a business savings account, money market accounts hold two distinct advantages over them:
- Higher APYs: While not true across the board, money market accounts earn higher interest than savings accounts in general. For example, looking at the rate tables at DepositAccounts.com, the average business savings account available nationwide is 0.10%. When compared to the APYs listed above, all of which are at 0.35% and above, it’s clear that business money market accounts earn higher rates.
- Easier Access to Funds: Business savings accounts don’t generally come with a debit card or checks to help depositors withdraw their funds from the account. While these features aren’t universal with business money market accounts, they’re more prevalent compared to other types of accounts. However, both money market accounts and savings accounts fall under the jurisdiction of the Federal Reserve Board’s Regulation D, which only allows a maximum of six withdrawals from the account each month.
Business money market accounts vs. CDs or checking accounts
While a business money market account earns a high APY and — if it comes with perks such as online banking, checks and/or a debit card — allows easy access to funds, it can’t have the same liquidity as a checking account. For regular business expenses you need to pay with any sort of frequency, you’ll need a checking account from which you’ll pay vendors, staff, etc. However as with personal checking accounts, don’t expect to earn a high APY.
Certificates of deposit (CDs) are the most restrictive product in terms of liquidity — unless you’re dealing with the relatively-rare CD, which incurs no penalty for early withdrawals, the money you’ve deposited is untouchable until the certificate matures. However, CDs do have the advantage of locking in your money at fixed interest rates (whereas the bank can change how much interest the money in a money market or savings account earns whenever it wants) and earning the highest APY.
Why you need to separate your business and personal banking
There’s nothing explicitly stopping you legally from funding your business with your personal money, but doing so is generally frowned upon for the following reasons:
- You remove any legal distinction between you and your business: To paraphrase a certain businessman-turned-president, “Corporations are people too.” This becomes more than a campaign slogan when you’ve mingled your personal and business finances and someone successfully sues your business. If a court takes a look at your books and determines there’s no real distinction between your business’s finances and your personal wealth, they can include your own money in any damages that have to be paid.
- The IRS won’t let you deduct expenses: Even though you consider your Etsy shop a budding corporate empire, the IRS has its own definition of what constitutes a business versus what’s a hobby that makes you money — and changes what you can deduct based on its decision. One of the first criteria the IRS lists is “Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records” (emphasis ours). Having separate accounts goes a long way toward proving your hobby is actually a legitimate business.
What do I need to open a business money market account?
While the exact materials and information needed to open one of these accounts varies by institution, you should probably have on hand the following information when you’re ready to open an account:
- Employer Identification Number (this is a nine-digit number you receive after applying to the IRS which, if you own a business, you probably already have).
- A legal document indicating when the business was formed
- Your own social security number or government-issued ID
You may need additional information depending on how your company is structured (if you aren’t the sole proprietor, for example, you’ll probably need to provide ownership papers to the bank), but the above is a good place to start when gathering the materials you’ll need to open one of these accounts.