As your business grows and progresses, you may find yourself with extra funds that you’d like to store away. In this case, you’ll want to look for the best savings account for your business. Compared to a business checking account, as you may already know, a business savings account allows you to accrue interest on the funds you store but limits your availability to withdraw and use those funds.
This being said, if you’re trying to find the right savings account for your business, you may start your search with Capital One—a traditional brick-and-mortar bank known for their wide range of small-business friendly products.
So, what does Capital One have to offer for this type of business bank account?
We’re here to help you find out.
In this review, we’ll break down each of the two Capital One Business Savings account options, discussing their fees, rates, and other features. We’ll also offer some top alternatives so that you have all of the information you need to decide which business savings account is right for you.
As we mentioned above, Capital One offers two different business savings account options:
The first important point to understand about these two options is that Advantage accounts are traditional business savings accounts, the Certificate of Deposit option functions a little differently.
Essentially, a certificate of deposit works like a savings account that has a predetermined term length. With a certificate of deposit, you won’t be able to access your business’s savings before your term length has fully transpired (unless you want to pay significant fees)—however, you will accumulate interest at a much higher rate than with a traditional business savings account.
Next, let’s break down the Capital One Business Advantage Savings account.
The Capital One Business Advantage Savings account functions similarly to most savings account options from traditional banks—but notably, includes a high-yield promotional period and flexibility for business owners who need to deposit or withdraw cash.
With this Capital One Business Savings account, you’ll have to provide a minimum deposit of $250 in order to open an account. That is a fairly low minimum compared to many other options on the market, including Capital One’s Small Business Certificates of Deposit.
The Capital One Business Advantage Savings account comes with a monthly service charge of $3, which is waived if you maintain a minimum balance of $300.
The Capital One Business Advantage Savings account allows you to use any Capital One ATM to withdraw cash for free.
This being said, if you use a non-Capital One ATM or an international ATM, you’ll face a $2 fee per withdrawal. Additionally, ATMs within certain locations will require a $5 fee per withdrawal.
For a fee, you can wire from this Capital One Business Savings account. If you’re performing a domestic wire, you’ll have to pay anywhere from $10 to $25. A foreign wire, on the other hand, will cost you from $10 to $50.
Wiring policies and fees can vary based on location, however, so you’ll want to check with your local Capital One branch or representative to find out exactly what fees you might face with your account.
With the Business Advantage Savings account, you’ll have access to a 12-month promotional APY of 0.20% (as long as your balance is under $5 million). After this period expires, a standard APY will set in based on the market and your balance.
Interest earned with this business savings account compounds monthly and is credited on the last day of your cycle.
Once again, the Business Advantage Savings account will be limited to the federally-regulated six withdrawals every month. Any additional withdrawal you make will be subject to a $10 fee—and if you continuously perform more than six withdrawals per month, Capital One may choose to close your account.
This being said, however, you will be able to make an unlimited number of withdrawals from a teller at any branch or ATM.
Finally, the last of your Capital One Business Savings account options is their Certificates of Deposit (CD).
As a reminder, comparing business savings accounts vs. CDs, certificates of deposit last for a predetermined amount of time and you can only withdraw funds after the term length expires. On the whole, CDs accrue higher interest rates than traditional business savings accounts.
In this way, the Capital One Small Business Certificates of Deposit are well-suited for businesses looking to invest in longer-term savings.
To open a Capital One Small Business Certificate of Deposit, you’ll need a minimum deposit of $1,000.
Compared to many other business savings accounts, this is a fairly high requirement.
Additionally, it’s important to note that your Capital One Business Certificate of Deposit will likely have a minimum balance requirement, however, the specific amount (and therefore, any possible service charge) will vary based on the product and location.
The purpose of a certificate of deposit is to accrue the maximum amount of interest without using your funds. Therefore, unlike the other business savings account options from Capital One, you won’t have an included number of monthly withdrawals with your CD.
Instead, if you do make a withdrawal from your CD before the term expires, you’ll face significant fees that vary from product to product.
This being said, you will have no ATM access with a CD and you’ll need to make any deposits into the account when you open it.
Finally, although the specific rates can vary, you’ll see that Capital One CDs are high-yield business savings account options.
With a one-year fixed rate, for example, Capital One offers a 2.00% APY. For an 18-month fixed-rate CD, you’ll receive an APY of 1.90%—and for two years, 1.80%.
For small business CDs with variable rates or longer terms, you can work with a Capital One banker to explore your options.
This being said, once your term expires, you have the option to redeem your funds, or automatically renew the account into a new CD with the same product terms at current interest rates. If you choose to renew your Capital One CD, you’ll have a seven day grace period during which time you can change the amount of funds in your CD or redeem the funds without a penalty.
If after reading through these Capital One Business Savings account options, you feel that you’d like greater access to your business’s funds, you should probably turn your search to a business checking account.
On the whole, business checking accounts—including those from Capital One—are more liquid than savings accounts and they allow you to store, use, and manage your finances on a day-to-day basis.
This being said, once you open a business checking account, you’ll often find that the bank will allow you to open a connecting business savings account—and you can manage these accounts in tandem.
With Capital One, for instance, you can link your business checking and savings accounts—and this will allow you to easily transfer funds between the two accounts, as well as utilize overdraft protection to reduce fees and protect your stored capital.
With all of this information in mind, you’re probably aware that Capital One isn’t the only bank for small businesses that offers savings accounts.
So, what are the benefits of choosing one of these business savings accounts over the other options on the market? Let’s break down the pros and cons of these Capital One products.
First, perhaps the biggest benefit of the Capital One Business Savings suite is that each option appeals to a different type of business owner and need. The Business Advantage Savings account is a great option for physical branch and cash access, while the Small Business CDs are perfect for earning the most on funds with little accessibility.
Additionally, another advantage of these options, especially the two traditional business savings accounts, is the low minimum deposit requirements and low (or easily waivable) service fees.
Finally, each of these Capital One Business Savings accounts allows you to earn above the average interest rate on your funds. With an Advantage account, you can access a 12-month promotional APY and accrue a higher, fixed interest rate during this time. With the Small Business CDs, on the other hand, your interest rate is locked in for the length of your term.
On the other hand, there are also downsides to the Capital One Business Savings accounts to consider as well.
Perhaps one of the biggest is that Business Advantage Savings accounts are only high-yield during the 12-month promotional period. After that, rates drop and become variable. The rate earned during the promotional period is also well below what some competitors offer.
The Capital One Business Savings products also have a certain level of inflexibility.
The Advantage Savings account offer ATM and cash deposit access, but it isn’t available throughout the U.S. and you have to actually visit a Capital One branch to apply. Plus, by the very nature of the Capital One Business Certificate of Deposit, you can’t access your funds once you’ve opened your account. In addition, like the Business Advantage account, Capital One CDs are not available everywhere and you have to visit a location to apply.
Before you decide whether a Capital One Business Savings account is right for your business, you’ll want to explore some top alternatives and see if there’s an option that will be a better fit.
With this in mind, one of the best alternatives to consider is the Chase Business Savings suite.
Chase offers three business savings account options: Total Business Savings, Premier Business Savings, and a Certificate of Deposit.
Chase Total Business Savings is the best option for smaller businesses that will have lower account thresholds. The monthly fee for this account will be $10, waived if you maintain a balance of $1,000 or more, or have linked a Chase business checking account. With this account, you’ll also receive 15 monthly deposited items at no charge, up to $5,000 in cash deposits per month with no fee, and a typical market rate APY.
The next option, the Premier Business Savings account will be a worthwhile option for businesses with higher balances. This account has a monthly fee of $20, waived if you have a balance of $25,000 or more. The Chase Premier Business Savings account includes 30 monthly deposits, up to $10,000 in cash deposits, and higher interest rates with higher balances (or when linked to a Chase business checking account).
Finally, the Chase Certificate of Deposit account offers a fixed rate of return, and might also allow for high return rates if you hold higher balances. The Chase CD has no monthly service fee and requires a $1,000 minimum deposit (which is the same as Capital One’s).
Ultimately, with three comparable options and a range of features, the Chase Business Savings accounts are worthwhile alternatives to Capital One if you’re looking for a business savings account from a traditional brick-and-mortar bank.
Finally, for a Capital One alternative that can offer the highest APY at the lowest cost, you’ll want to consider the NBKC Business Money Market Account.
With this account, you can earn a 1.75% APY. There is no minimum opening deposit requirement for this business savings account, no average balance requirement, no monthly fees—virtually no fees at all.
The NBKC Business Money Market Account will include business and mobile banking, free mobile check deposit, free incoming domestic wires, and the ability to open and connect a free NBKC Business Checking account.
This being said, you’ll only face fees on this account for outgoing domestic wires ($5) and incoming or outgoing international wires ($45).
As an online-based bank, however, you won’t have the same ATM or cash access as you might see with Capital One or Chase, however, there’s no doubt that you’ll be able to earn the most on any extra funds you store with this NBKC account.
At the end of the day, only you can decide which Capital One Business Savings account (if any) is best for your business.
This being said, however, with the small-business friendly nature of Capital One and generally affordable and accessible nature of their business savings accounts, one of these three options very well might be right for you.
On the other hand, if you’re looking for a digital-first business savings account, or an account that earns a higher APY on an ongoing basis, you may decide to explore some top alternatives, like Chase or NBKC.
Ultimately, whichever business savings account you choose, you’ll want to be sure to pay close attention to the federally regulated withdrawal limit (six per month). Although there’s nothing wrong with utilizing your savings account, you’ll want to leave your funds as long as possible to allow them to earn the greatest amount of interest—and of course, to avoid any additional fees.
Randa Kriss is a senior staff writer at Fundera.
At Fundera, Randa specializes in reviewing small business products, software, and services. Randa has written hundreds of reviews across a wide swath of business topics including ecommerce, merchant services, accounting, credit cards, bank accounts, loan products, and payroll and human resources solutions.