We’ve Gathered the Best Banks for Small Business Savings Accounts

We've Gathered the Best Banks for Small Business Savings Accounts

Savings accounts aren’t just for individuals — they are important for small businesses as well. Having savings on hand can help your business weather seasonal income fluctuations and unexpected expenses or prepare for large expenses that you know are coming. A savings cushion simply helps your business run more smoothly and can relieve a lot of stress.

Unlike some other savings and investment vehicles, a savings account allows your business to earn interest on funds while still offering easy access to your money. The key differentiating feature when you are looking for a savings account is the annual percentage yield (APY). This determines the amount of interest you’ll earn on your funds. Generally, you will find much higher rates at online banks than at large, traditional banks.

However, APY isn’t the only feature to consider. Other factors come into play as well, and you want to make sure that the whole package of account suits the needs of your business.

Features to Consider

Fees

The fees associated with a business savings account can be just as important in your decision as the interest rate. Fees can include:

  • Monthly service fee: This is a fee simply for having the account, which you want to avoid if you can.
  • Monthly transaction fee: Often, savings accounts will allow a certain number of transactions per month before fees start kicking in. Ideally, you won’t have to access your money that often so your account can grow.
  • Monthly cash deposit fee: Accounts may have limits on how much cash you can deposit for free. You’ll be charged a fee once that limit is exceeded.
  • Wire transfer/ACH fees: Chances are you will use a checking account for sending wire or ACH payments, but it’s important to know how much it will cost if you think you’ll be using your savings account for these.
  • ATM fees: Many banks will charge fees for transactions on ATMs that are not on their network. Some banks will reimburse customers for fees charged by other networks to use their ATMs by request.

Minimum Opening Balance/Ongoing Balance

Many banks require a minimum amount to open an account, which is usually pretty low. Meanwhile, keeping a minimum ongoing balance can help you avoid service fees or bump up the amount of interest your account is earning.

Location

Some businesses are perfectly happy banking in the virtual realm, and the location of their financial institution isn’t really a factor. Others may want their savings to be located somewhere they have a personal relationship with their banker, or they may have large cash deposits to make, for example. In this case, the location of the local branch — and perhaps being able to easily find a branch in other locations — can be important.

ATM Network

If access to ATMs is important for you, you may want to choose a savings account with an institution that has a wide network. If you think you will be using ATMs often, though, make sure you’re aware of ATM fees.

FDIC/NCUA Insurance

If your account is insured by the FDIC (Federal Deposit Insurance Corporation) for banks or the NCUA (National Credit Union Administration) for credit unions, it means that the federal government protects you from loss in case of a bank failure for up to $250,000 per account.

Complementary Services

Sometimes, having a savings account at the same bank where you have your checking account or other services can be more convenient for you. At some banks or credit unions, you may be able to get discounts or fees waived if you use more than one service from the institution.

Best Small Business Savings Accounts

In compiling this list, we focused on accounts that offer a combination of rewarding APY, minimal fees, minimal required balances and maximal flexibility for accessing funds. These five candidates represent accounts that would be solid choices for a variety of different small businesses.

First Internet Bank Money Market Savings

APY: 1.26% for daily balances of less than $250,000; 1.51% for daily balances above $250,000

Minimum opening balance: $100.00

Monthly service fee: $5.00 (fee is waived with average daily balance of $4,000)

Transactions allowed per month: 6 ($5.00 fee for withdrawals over the limit)

Other: ATM cards for sole proprietors only. No charge for ATM transactions.

First Internet Bank offers one of the highest interest rates on a business savings account at 1.26%, and that rate goes even higher with a balance of $250,000 or more. As an online-only bank, however, you won’t have access to any physical branches.

Live Oak Bank Business Savings Account

APY: 1.05%

Minimum opening balance: $0.00

Monthly service fee: $0.00

Transactions allowed per month: 6 ($5.00 fee for withdrawals over the limit)

Other: No cash deposits. Dormant account fee will be charged and account closed if you have $10 or less in your savings account and no activity for 24 consecutive months.

Another online bank, Live Oak Bank offers a relatively high APY, no minimum opening balance and minimal fees.

Presidential Bank Premier Savings

APY: 0.50% for daily balances up to $35,000; 0.25% for daily balances over $35,000

Minimum opening balance: $5,000.00

Monthly service fee: $0.00

Transactions allowed per month: 6 (bank may close the account if this limit is routinely exceeded)

Presidential Bank’s Premier Savings offers a lower APY than some other online banks, but it is still much higher than what most traditional banks offer.

Capital One Spark Business Savings

APY: Introductory rate of 1.50% for the first year; 0.40% after that

Minimum opening balance: $0.00

Monthly service fee: $0.00

Transactions allowed per month: 6

Other: Monthly cash deposit fee: $5,000 per month for free, then 0.2% for additional deposits.

Capital One offers one of the highest interest rates of any of the banks on our list — 1.50% — for the first year, after which the rate drops to 0.40%. That’s lower than any of the online banks on our list, but Capital One also offers minimal fees and more physical locations to take cash deposits. This combination could be the best of both worlds for some businesses.

Chase Business Premier Savings

APY: 0.04% for balances under $50,000; tiered rates above $50,000

Minimum opening balance: $25.00

Monthly service fee: $20.00 (can be waived with a $25,000 minimum daily balance or by being linked to other Chase accounts)

Transactions allowed per month: 6 ($5.00 fee for excess withdrawals)

If you are looking to open a savings account at a major bank where you can develop a relationship with your banker, Chase could meet your savings needs. Like most traditional banks, its APY is far lower than those of the online banks on our list, but it has multiple branches across the U.S. and offers a comprehensive suite of options for small business owners.

A Penny Saved

Ultimately, the “best” small business savings account is the one that meets the needs of your business — so it’s important to do your research based on your unique situation. There are many options available, but it’s worth taking the time to choose a savings account that’s going to function efficiently for you.

Which business savings account do you use?Let us know on Twitter @Revenued_com!

Jennifer Sokolowsky writes about finance, legal and tax topics for publications and companies including The Puget Sound Business Journal, Avalara, and Avvo.
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