Business Savings Accounts: What You Need to Know
As any small business owner will tell you, your business bank account is a crucial piece of your financial operations. After all, your business checking account is the place where you store your cash to cover expenses, payroll, and operating costs. This being said, though, as your business grows and expands, you may find that you have enough money in your checking account to cover monthly expenses and other anticipated costs, and in fact, you even have extra capital to put aside.
In this case, it may be time for you to search for a different kind of business bank account—a business savings account.
Unlike business checking accounts, business savings accounts are meant for you to store excess capital—and hopefully, with a high yield business savings account, grow your funds as you store them.
However, just as is the case with any tool or product for your business, finding the best savings account is an involved process. You’ll want to consider a variety of factors in order to determine which savings account is right for you.
Luckily, our guide to business savings accounts is here to help. We’ll discuss the different types of savings accounts, what to look for when choosing one, and finally, explore seven of the best high yield business savings accounts. Let’s get started.
What Is a Business Savings Account?
Before we explore the best business savings accounts, let’s start with the basics: What is a business savings account?
In essence, like any savings account, a business savings account is an account you open with a bank in order to store extra capital, and hopefully, grow the funds that you store.
With a business savings account, you’ll receive interest on your account balance, while also being able to make deposits and withdrawals as necessary. Unlike many personal savings accounts, however, a business savings account—in particular, high yield business savings accounts—will likely require you to deposit a certain amount of money to open the account, maintain a particular balance, and place limits on the number of withdrawals and account actions you can make.
Therefore, you’ll probably only want to open a business savings account when you’re confident that your company has enough money in your business checking account to cover monthly expenses and other operational costs 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).
Business Savings Accounts vs. Business Checking Accounts
As we mentioned above, a business savings account is very different from a business checking account. In fact, these two types of bank accounts should be used in tandem, and as we’ve suggested, there’s a right time to invest in a savings account.
Generally, in the timeline of a small business, a savings account will come after your business checking account is well-established, as many startups don’t have enough capital to keep a portion tied up in savings. However, if your business does have the capital, it never hurts to establish both types of business bank accounts from the get-go.
It’s important to remember the essential differences between these two accounts. Although there are several points you may take into account, on the whole, the distinctions boil down to two features:
- Funds in your savings account will accumulate interest over time, whereas those in your checking account will not.
- You’ll likely have more limited access to the funds in your savings account than those in a checking account.
This being said, you’ll want to think of a business checking account as an essential tool from the moment you start your business—it’s what you’ll use to separate your business and personal finances. You can think of a business savings account, on the other hand, as the next step up in your financial journey once your business has sufficient capital to start investing in its future.
Types of Business Savings Accounts
With this brief overview in mind, let’s continue by discussing the different types of savings accounts that are available to you.
First, you may choose a simple business savings account, the most liquid and accessible version of your savings account options.
As we mentioned above, with a straightforward business savings account, you’ll be able to withdraw from your account for free a certain number of times (depending on which savings account you decide to go with), as well as earn interest on your funds. Once you open your account and deposit your funds, your bank will add to your savings based on the savings account rate, or annual percentage yield (APY), that comes with your account.
Additionally, a general business savings account will not come with a predetermined term throughout which your capital will have to sit in the bank.
High Yield Business Savings Accounts
Next, you may choose a high yield business savings account. Like any savings account, a high yield savings account allows you to store your funds and earn interest, as well as access your cash, deposit additional funds, and make withdrawals.
However, the difference between any business savings account and a high yield business savings account is your APY. High yield business savings accounts offer interest rates that are well above your typical savings account. This being said, though, in exchange for a higher interest rate, high yield business savings accounts often have stricter requirements—you’ll more than likely have to keep a minimum balance in the account, pay monthly fees, and agree to other terms as dictated by the small business bank or institution.
Many high yield business savings accounts come from online-only banks, as these banks have lower operating costs. In other words, they don’t need to spend cash to run local branches or hire staff to keep them operating.
With this in mind, ideally, the best savings account for your small business would be a high yield business savings account—after all, we’d all prefer to earn more money, rather than less. However, it’s important to remember that for this type of bank account, you’ll likely be agreeing to a high minimum balance, as well as an online savings account, as opposed to one from a traditional, brick-and-mortar bank.
Business Certificates of Deposit
Finally, the last type of business savings accounts to mention isn’t really a savings or bank account in the way we typically think of one. This type, a business certificate of deposit, is a savings option that will offer higher interest rates but won’t allow you to access your funds as a normal savings account would.
How does it work?
Well, a certificate of deposit (also known as a CD) is a way to invest any savings you know you won’t need to access over a certain amount of time.
When you open a certificate of deposit, you make a deposit—normally at least $1,000—and choose a term length throughout which your savings will sit with the bank. You won’t be able to access your deposit before this term is up unless you’re willing to pay significant early withdrawal fees.
With a CD, however, you’ll likely be able to earn much more interest for your savings than with a standard savings account. This being said, though, with the inflexibility of a CD, you may find that meeting the requirements of a high yield business savings account is easier and just as advantageous for gathering interest on your funds.
Business Savings Accounts: What to Look For
As you can see, business savings accounts generally fall under one large umbrella—with a few variations. This being said, now that you know what types of business savings accounts you’ll be choosing between, let’s break down the specific criteria you’ll want to consider in your search before we dive into our list of the best business savings accounts.
What should you look for in a savings account? Although we’ve mentioned some of these features in passing in our discussion thus far, let’s take a closer look:
Minimum Account Opening Deposit
Generally speaking, most business savings accounts will require that you have a certain amount of savings to deposit into your account when you open it.
This minimum deposit will certainly vary depending on the savings account, but almost every option has a minimum account opening deposit, no matter how large or small that minimum is.
Additionally, as we mentioned earlier, one of the tradeoffs of high yield business savings accounts specifically is that they may require a larger opening deposit than standard business savings accounts.
Business Savings Account Rates, aka Annual Percentage Yield
The main purpose of a business savings account, of course, is to accumulate more money by storing your funds in an account that earns interest. So, as you search for the right savings account for you, you’ll want to consider what the savings account rates look like—or in other words, what the annual percentage yield is.
Once again, the APY will determine how much interest your savings will accumulate, and therefore, finding the best high yield business savings account may come down to APY.
As we’ve discussed, one of the big differences between business savings accounts and business checking accounts is that your money is less accessible in a savings account—after all, this account is meant for storing money rather than spending it.
This being said, your savings account will have a limit to how many withdrawals you’ll be able to make for free, likely on a monthly basis. In order to avoid withdrawal fees, you’ll want to consider how many included withdrawals any one business savings account offers.
Whereas there are a number of free business checking accounts out there, most business savings accounts will require service fees. Typically, you’ll pay a monthly service fee, but it can vary depending on the bank or account provider.
This being said, many accounts will offer a way for you to get the service fee waived, such as maintaining a certain monthly balance in your account.
You’ll likely be able to withdraw from your savings account through any ATM, but whether or not you’ll be charged extra for withdrawing through an ATM will depend on the bank you choose to open your business savings account with.
Generally, your bank will let you withdraw from your savings account for free if you’re doing so from one of their ATMs. However, free ATM withdrawal isn’t always included with your account, so you’ll want to determine how any account provider handles this particular functionality. Additionally, if you opt for an online business savings account, you won’t have access to ATMs through your bank, but they may have a network of free ATMs you can use or will reimburse you for your ATM usage.
Finally, as you search for the best savings account for your small business, you’ll need to see how any account handles wires. Can you send and receive domestic wires? Can you send and receive international wires?
Some business savings accounts include a certain number of free wires per month, whereas others may charge you a wiring fee for any wire you send or accept.
Best High Yield Business Savings Accounts
Keeping in mind all of the information we’ve covered thus far, what are the best savings account options, and what can they offer your business?
As we mentioned above, ideally, the best savings account for your business will be a high yield savings account, and therefore, we’ll be listing the seven best high yield business savings accounts—discussing the details of each account and what benefits they can provide.
|High Yield Business Savings Account||Business Savings Account Rate (APY)||Minimum Opening Deposit||Monthly Fee|
2% APY for the first 12 months
$3, waived if maintain $300 minimum balance
$5, waived if maintain an average daily balance of $2,500
$10 if account balance falls below $10,000
Have to contact Goldwater for more information
$5 if daily balance is below $4,000
1. Capital One Business Advantage Savings Account
The first option on our list of the best high yield business savings accounts is the Capital One Business Advantage Savings Account.
This a great option for entrepreneurs who want to take advantage of a high interest rate but still enjoy the brick-and-mortar convenience of banking with Capital One. In order to open this account, you’ll have to go to a Capital One location, but once you’ve done so, you’ll have free access to online banking, as well as the ability to connect to your Capital One Business checking account.
Plus, this Capital One business savings account offers a promotional 2% APY for the first 12 months and then bases your APY on your account balance.
Let’s look at the details.
Capital One Business Advantage Savings Account Features
- Minimum opening deposit of $250
- Promotional APY of 2% for the first 12 months; after the 12 months are up, Capital One will apply a standard business savings account rate to your balance
- Six free withdrawals per month
- Monthly service fee of $3 waived if you maintain a balance of $300
- Free ATM withdrawals from Capital One ATMs
- $2 fee to withdraw from most other ATMs; select ATMs will incur a $5 withdrawal fee
- Send foreign and international wires, fees range from $10 to $50
2. nbkc Business Money Market Account
For a savings account option that not only offers a great APY, but also allows you to open an account online quickly and easily with no minimum deposit, you might consider the nbkc Business Money Market Account.
This savings account is a notable choice for business owners who don’t have a substantial amount of extra funds to invest in their savings account, but nevertheless, want to start saving for the future. Plus, the nbkc Money Market account can be managed wholly online—using your computer or mobile device.
Let’s learn more.
nbkc Business Money Market Account Features
- No minimum opening deposit required
- APY of .40% as long as you have a minimum balance of $0.01
- Up to six included monthly withdrawals
- Free online and mobile banking with eStatements
- No monthly account fee
- Free nbkc Business Debit MasterCard with ATM access
- $0 transaction fees, unlimited transactions
- $0 check deposit and incoming domestic wires
- $5 fee for outgoing domestic wires, $45 fee for international wires (incoming and outgoing)
3. Axos Bank Business Savings Account
Next on our list is an online business savings account from the original online-only bank, Axos. Not only is the Axos Business Savings account an online account, but it also is a high yield savings option that beats out the rates of most conventional and online banks.
Since you can apply for this account online, it’s well-suited for business owners looking for instant access to their savings account.
Let’s check out the details.
Axos Bank Business Savings Account Features
- $1,000 minimum opening deposit
- APY of 0.8% for any and all accounts that contain the initial required deposit of $1,000
- Six free transfers per month, with a $10 fee for every transfer exceeding this limit.
- 60 free items (debits, credits, deposited items) per month with remote deposit
- 20 free items per month, $0.30 for each item after this limit
- No monthly service fee if you maintain a $2,500 average daily balance, $5 service fee otherwise
- Free online and mobile banking
4. Community Bank of Pleasant Hill Business Premier Money Management Account
Sometimes local and regional banks can offer savings account rates that are much better than those of national banks. Although these options may lack accessibility for every customer, they make up for it with great APYs and customer service.
In this case, the Community Bank of Pleasant Hill offers their Business Premier Money Management Account—a high yield business savings account with a low opening deposit that can appeal to businesses of all shapes and sizes.
Let’s learn more.
Community Bank of Pleasant Hill Business Premier Money Management Account Features
- $25 minimum opening deposit
- APY of 1.63%
- Free electronic statements
- Monthly service fee of $10 if balance falls below $10,000
- Free withdrawals on the second and fourth Wednesdays of each month; any other withdrawals will incur $25 fee
5. Goldwater Bank Savings Plus Business Account
The next option on our list of the best high yield business savings accounts comes from Goldwater Bank. The Goldwater Bank Savings Plus Business Account has a solid APY, but the highest minimum opening deposit on our list—meaning you’ll need significant funds stored up for this option.
This being said, however, applying for an account with Goldwater is easy—you can do so in-person or online—and you’ll be able to take advantage of Goldwater Bank’s online and mobile banking platforms.
Let’s look at the specifics.
Goldwater Bank Savings Plus Business Account Features
- $25,000 minimum opening deposit
- 1.65% APY
- Two free withdrawals per month
- Wire transfers (will incur a fee)
- Quarterly e-statements
6. First Internet Bank Money Market Savings Account
The First Internet Bank of Indiana offers a great rate for their online business savings account, the Money Market Savings account.
You can apply for the First Internet Bank Money Market Savings account online and quickly access their full suite of free online and mobile banking tools. With the highest APY on our list, this savings account could be a worthwhile option for a variety of small businesses.
Let’s learn more.
First Internet Bank Money Market Savings Account Features
- $100 minimum opening deposit
- 2.02% APY
- $5 monthly maintenance fee if the daily balance is below $4,000
- Six free withdrawals or transfers per month; $5 for additional transactions
- ATM debit card for sole proprietors only
7. Live Oak Bank Business Savings Account
Finally, the last option on our list of the best high yield business savings accounts comes from Live Oak Bank. Live Oak Bank bills itself as a small business-centric bank, offering their savings account with an APY 12x higher than the national average.
Plus, you can open your Live Oak account completely online, making it a great option if you’re looking for almost instant access to your savings account.
Let’s explore the details.
Live Oak Bank Business Savings Account Features
- No minimum opening deposit
- 1.10% APY
- No monthly maintenance fee
- Free online banking
- Six free transactions; $10 per each additional transaction
- $15 incoming wire fee
- $19 outgoing wire fee
Best Savings Account for Small Business: The Bottom Line
Now that we’ve made it through our list of seven of the best business savings accounts, the choice is up to you.
After all, you know your business best, and therefore, you’re the only person who can determine which savings account will meet your needs.
This being said, however, any of these high yield business savings accounts may be able to serve your business well—each offers a substantial APY and notable accessibility, as well as other account benefits.
With these options in mind, then, you have all of the knowledge you need to effectively search for a savings account and make the right decision for your company. After all, regardless of your choice, opening a business savings account is an exciting step—one that means your business is growing and that you’re ready to invest in your future.