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If you’re lucky enough to be on the lookout for the best high yield business savings accounts, then congratulations are in order: You’re a member of a pretty exclusive club of small business owners who have money to save for a rainy day purchase.
But now that you have money set aside, you have to find and select one of the best high yield business savings accounts to make sure your money is working for you. Thankfully, the days of low interest rates are over. The global economy is out of its rut, and better rates of return are finally en vogue for savers.
We’ll help answer your questions about where to begin with this type of business savings account, how to save wisely, and when to open a high yield business savings account. Plus, we break down what you need to know if you think you’re ready to maximize your money.
High yield business savings accounts are places to stash your cash that will earn interest for as long as you have money in the account.
High yield business savings accounts are just like regular, personal savings accounts. They allow you to access your cash, deposit additional funds, and make withdrawals—just like you would with any other savings account that you might set up for yourself. In exchange for a higher interest rate, your bank might require you to keep a minimum balance in the account, pay monthly fees, or agree to other terms as dictated by the institution.
The best high yield business savings accounts offer interest rates that are well above conventional savings accounts. Most are able to do so by being online-exclusive, which means that they have slimmer operating costs and don’t have to shell out big bucks on local branches and hire staff to keep them operating. In fact, some of the best high yield business savings accounts come from online-only banks, which provide tempting rates to woo new customers that might not have otherwise brought their banking to a digital firm.
This might sound like kind of a weird question: Why would I want to earn more money, rather than less? It’s not that simple—there are advantages and disadvantages for each. High yield savings accounts provide greater rate of return on your money (i.e. higher interest rates), but might require you to keep a high minimum balance in order to keep them open.
And, as we mentioned earlier, most high yield business savings accounts are only available online, which means you might not have the same kind of on-demand, in-person support that comes with accounts at brick-and-mortar banks. On the other hand, most conventional business savings accounts come with meager interest rates, which means that it’ll take a much longer time for you to make the same amount of money in interest on your deposit.
Long story short, you’ll want to open a high yield business savings account if you’re looking to maximize your interest without giving up your ability to take out money when you need it.
There are several high yield business savings accounts on the market right now that offer great interest rates and favorable terms. And, as expected, most are from online-only banks. But a few of the most attractive accounts come from banks with physical branches, too, which gives you the best of both worlds.
Here’s a breakdown of the best high yield business savings accounts for your company:
The Spark Business savings account is a great option for entrepreneurs who want to enjoy a high interest rate but still enjoy the brick-and-mortar convenience of banking with Capital One, featuring a promotional 1.75% APY for the first 12 months.
The Capital One Spark Business Savings Account requires a $250 minimum opening balance, but provides a waiver of its $3 per month fee if you maintain a balance of $300. You’ll also enjoy free withdrawals Capital One ATMs, and $2 transaction fees at most non-Capital One ATMs. Plus, you’ll get to withdraw money six times per month from your savings account for free.
Axos is the original online-only bank, beginning back in 1999 (as Bank of Internet) when brick-and-mortar banks would laugh at the idea of people doing all of their banking over the internet. (How far we’ve come.) Not only has Axos been on the block for quite a while, it also offers high-yield savings account options for business banking that beats most conventional and online banks’ rates.
The Axos Business Savings account offers 0.8% APY for any and all accounts that contain the initial deposit required of $1,000. This rate is not just promotional, so you could expect it to rise (or fall, of course) throughout the lifetime for the account. You’ll still get a debit card for use at ATMs nationwide, and can deposit checks through the mail, wire transfer, or through Axos’ mobile app.
Sometimes local and regional banks offer interest rates that knock the socks off of national banking brands. What these companies lack in down-the-street accessibility for every customer, they make up for with great APYs and friendly customer service.
In this case, Community Bank of Pleasant Hill offers up an APY of 1.66% through its Business Premier Money Management Account with only a $25 minimum balance to open. This account also offers free withdrawals on the second and fourth Wednesdays of each month and free paperless billing.
Goldwater Bank’s Savings Plus option for personal and business banking offers an alluring 1.65% APY, making it one of the best high yield business savings accounts out there. All you need to have is an opening deposit of $5,000 and maintain a daily balance of $0.01.
Applying for an account is easy—you can do so in-person or online—and you’ll be able to take advantage of Goldwater Bank’s online and banking platforms, pay bills directly from your account, and get electronic statements.
The First Internet Bank of Indiana offers a great rate for money market business savings accounts, serving up a 1.36% APY for accounts with less than $250,000 (or 1.66% APY for those with more than $250,000). This account only needs an initial deposit of $100, and includes a monthly maintenance fee of $5 if the daily balance dips below $4,000.
Deposits and withdrawals can be made six times per month without an additional fee, with additional transactions costing $5 each. A word of caution though: debit cards for this money market savings account can only be issued to sole proprietors.
Live Oak Bank bills itself as a small business-centric bank, offering a high yield business savings account with a rate of 1.05%—11 times higher than the national average. Better still, Live Oak’s business savings account also provides up-front fees and terms: Namely, there’s no monthly maintenance fee, and no fee for online banking.
Other activities, such as incoming and outgoing wire transfers, stop payments, or insufficient funds on the account, occur fees per instance. And so do transactions beyond the allotted six per month. But considering that savings accounts are designed for saving, rather than bill paying, these concerns should be a non-issue in all but the most extreme cases.
You spent most of your early entrepreneurial days trying to make sure you had enough operating cash in your business checking account to cover expenses, payroll, and operating costs. Not an easy feat in its own right for most business owners.
It’s not strange, then, if you’re a little apprehensive about opening up even the best high yield business savings account to grow your money—after all, the purpose of a savings account feels pretty different than a business checking account. Especially if you remember your company’s salad days vividly.
As scary as it might seem to not have all of your company’s cash in a checking account, there’s actually not a lot of downside in putting some of your money aside in one of the best high yield business savings accounts on the market. Savings accounts provide interest on the account balance, all while allowing their owners to make deposits and withdrawals when they need to. Granted, savings accounts offer less interest than some other products—such as a certificate of deposit (which have higher interest rates but penalize you for taking money out early)—but offer liquidity in exchange for convenience.
The best time to open a business savings account is when you’re confident that your company has enough money in its checking account to cover monthly expenses and other anticipated costs as they arise throughout the year. You won’t want to open a savings account just to find that you don’t have enough cash to cover your overhead, thus closing the account (or being below a minimum balance required by the bank). Once you’ve run the numbers, you’re ready to find the best high yield business savings account for your company.