Sunday, 28 April 2024
Updated on Wednesday, June 9, 2021
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.
Source: Deposit Accounts, June 09, 2021
Live Oak Bank awards a 0.55% 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 preauthorized, automatic and telephone transfers. After that there’s a $10 fee per withdrawal. Live Oak Bank was established in 2008.
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.
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. Any amount above $35,000 will earn you 0.25%. You’ll need to open your account with a minimum of $5,000.
Business customers are not required to maintain a minimum balance on the account in order to receive all ATM privileges. You won’t incur an ATM fee if you use an Accel, Allpoint, Cirrus, MoneyPass or Visa location. Free online banking, mobile banking and an 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.
Restrictions on joining: none.
First Internet Bank offers an FDIC-insured savings option for businesses with a good 0.40% APY on any balance up to $10 million. 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, 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.
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.
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:
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.
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.
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.
Currently, Service Credit Union is offering an 0.25% APY on funds in its Business Savings account, as long as you maintain a daily balance of at least $50. Additionally, Service Credit Union offers a Business Secondary Savings account, with the same APY, if you want to save for multiple savings goals at the same time.
There are no monthly fees on the business savings account. Both accounts offer online banking and remote deposits. The credit union, located in New Hampshire, was established in 1957 to support military personnel.
Restrictions to joining: You will need to join the American Consumer Council if you don’t qualify through the military, Department of Defense or a select employee group If you use the code “Service,” the council membership won’t cost you anything.
Like another institution on our list, First National Community Bank’s Wise Savings account (available to both consumers and businesses) breaks its rates down into tiers based on the amount in your account. To score the rate listed in our table, you’ll need to deposit at least $25,000. If you have more or less to sock away, here’s how much you’ll earn:
You’ll also owe a $1 monthly maintenance fee if your account falls under $50, but this shouldn’t be a problem because of the minimum required to earn our listed rate.
First National was founded in New Richmond, Wisconsin, in 1919.
Restrictions on joining: None
Prime Alliance Bank is currently offering a competitive APY of 0.20% 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 0.35% while balances of $200,000 or more earn an APY of 0.50%.
The Business Savings Account does not require any minimum balances to maintain the account (but you’ll want to have at least $1 in the account to keep earning), 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.
Axos Bank, formerly known as Bank of Internet USA, 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 0.20% 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 $25,000 and up. If you have less than that to keep in your account, you’ll want to go with their regular business savings account instead, which currently offers the same rate.
Axos Bank also makes it easy to access your funds when you need them. Customers have free online and mobile banking and remote deposit from anywhere as well as free image statements. Axos is an FDIC-insured bank based in San Diego. Other products it offers include business interest checking, CDs and money market accounts.
Restrictions on joining: none.
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 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 0.55%. The top APY among personal savings accounts is 0.65% 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, record keeping 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.
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:
Source: https://www.magnifymoney.com/blog/best-of/best-business-savings-accounts625269146/
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