What Are the Best Business Savings Accounts in 2023?

What Are the Best Business Savings Accounts in 2023?

What Are the Best Business Savings Accounts in 2023?

Rising interest rates may hurt borrowers, but they benefit savers. If your business has extra funds sitting in your bank account, you may want to put that money to work for your business with an interest-bearing savings account. And even if your business isn’t flush, establishing a business savings account can be helpful for your business financial health.

Here’s how to find the best business savings account for your business. 

Should I Get a Business Savings Account?

Probably. Setting aside money every month in a business savings account is a good way to prepare for both expected expenses, like taxes or periodic bills, as well as unexpected expenses that inevitably crop up from time to time.

That said, if you aren’t using a business checking account, start there. Every business (including freelancers and independent contractors) should use a business checking account to receive income and pay expenses. 

A business savings account can be a helpful addition to a business checking account, and make both saving and budgeting easier. 

What Are the Types of Business Savings Accounts?

A business savings account functions much the way a personal savings account does. Many will allow you to earn interest money in the account. There are, however, a few different types of deposit accounts to consider, whether you open one through an online bank, traditional bank or credit union. 

There are several types of savings accounts to consider for your business. 

Savings Deposit Account

A savings deposit account (sometimes referred to as “basic savings”) is the most liquid type of account, but also typically earns the lowest rate of interest of the three options mentioned here. (By liquid, we mean easy to access without extra cost.) You might choose this type of account if you expect to be dipping into your savings on a regular basis or if you are just getting started.

Consider how you expect to use your savings account before you decide which type of account you want. If you don’t want to maintain the higher balances associated with a high-yield savings account, or you want to maintain immediate access to your funds, a standard savings deposit account could be a good choice.

High-Yield Business Savings Accounts

As you might guess by the name, this type of account offers a higher interest rate. The higher interest rate typically comes with caveats, though. You may be required to maintain a higher balance in exchange for the higher interest rate, so it isn’t a good option if you expect you might need to drop below the minimum balance from time to time. 

Certificates of Deposit

Another deposit account is the certificate of deposit, or CD. A CD will usually offer a high fixed-rate for your savings, but you must commit to tying up your funds for a predetermined length of time. This could range from a few months to several years. Usually, the longer the term, the higher the APY.

Money Market Accounts

Another option to consider is a business money market account. It often acts like a high-yield savings account in that you can earn interest on your money, but may function like a checking account in that you can pay bills with a debit card or checks.

You may need to have a higher minimum balance for a money market account than a savings account, and the fees may be higher.

What is the Difference Between Business Checking and Business Savings?

Both business checking accounts and business savings accounts are important tools for helping your business manage your money and build financial health. 

Business checking accounts are designed for a larger number of transactions. Business owners can easily accept deposits, and withdraw funds by check or via ACH payments or wire transfers. Business checking accounts often automatically come with a debit card that can be used to withdraw funds.

There are business checking accounts available with no minimum deposit, and few fees. However, the interest earned will likely be minimal. 

Business savings accounts, on the other hand, are designed for fewer transactions. Interest is often paid on balances and APYs may be higher than on checking accounts. (But not always – some business checking accounts pay high APYs.) 

Overall, business checking accounts are best for managing the day-to-day finances of your business, while savings accounts are better for saving money for the long term. 

Choosing The Best Business Savings Account For Your Business

If you are looking for a business savings account, you can always start with the bank or credit union where you already have a business checking account. But don’t limit your research to just that. 

You may find options with a higher APY, lower minimum deposit requirement, or more features.  

Some business owners prefer to keep their checking and savings accounts in different financial institutions, either to help ensure larger balances are covered by FDIC protection, or to make it a little less convenient to tap those funds and perhaps overspend.  

It’s also helpful to understand minimum account balances, and whether there is a limit on the number of transactions or withdrawals each month. If your business does a lot of cash transactions, you may want to look for a bank with physical branches for cash deposits, or convenient ATM access.

What to Look For When Comparing Business Savings Accounts

Small business owners have unique needs for savings accounts. Some might prefer higher yields and big deposit options, while others might prioritize convenience through online banking. 

Here are a few factors to consider when comparing savings accounts:

  • Annual Percentage Yield (APY)
  • Minimum opening deposit
  • Monthly maintenance fees
  • Minimum balance requirements
  • Transaction fees
  • Options to waive fees
  • FDIC insurance or NCUA insurance
  • Online vs. physical access
  • Mobile banking & mobile app
  • Additional financial products offered

Now let’s look at some of the best business savings accounts today. 

Best Business Savings Accounts With Interest

Here are business savings accounts earning higher rates of interest. APYs current as of April 10, 2023. Rate subject to change, and terms and conditions apply so review details directly with the financial institution before you open an account.

Live Oak Bank 

Live Oak Bank currently offers 4% APY on business savings accounts with no minimum opening deposit, no required monthly deposit, or monthly maintenance fee if the account remains active.

Live Oak Bank is also currently offering a $300 bonus to first-time Live Oak business savings customers who open new Live Oak business savings account between April 2, 2023 and May 31, 2023, deposit at least $30,000 within 15 business days and no later than May 31, 2023 and maintain a balance of $30,000 or more for 90 days. This is in addition to the 4% APY earned on the account. 

Deposits at Live Oak Bank are covered by FDIC insurance up to the amount allowed by law, currently $250,000. 

You may also want to consider Live Oak’s Certificates of Deposit which currently pays 5% APY for a 1-year Certificate of Deposit. (Other terms available.) 

Live Oak Business Checking accounts also feature no monthly opening deposit requirement or minimum monthly balance. 

nbkc bank 

With a nbkc bank money market account, business owners can currently earn 1.75% APY with an opening deposit of just one cent and no minimum balance.

nbkc bank business certificates of deposit currently pay up to 3.25% APY.

Nbkc Bank also offers competitive checking with no minimum opening balance or minimum monthly balance required. 

First Internet Bank

At First Internet Bank, a business Regular Savings Account may be opened for a little as $100 and earn .90% APY. You’ll need to maintain an average daily balance of $1000 to avoid a $2 monthly maintenance fee.

A business Money Market Savings Account can be opened for as little as $100, and a $4000 average daily balance of $4000 is required to avoid a $5 monthly maintenance fee. The APY is 3.20% with a daily balance of $5,000,000 or below or 4.82% with a daily balance of above $5,000,000.

With both accounts, only six transactions are permitted per month. 

All information about First Internet Bank business bank accounts have been collected independently by Nav. These accounts are not currently available through Nav. To see what business checking accounts are available, please visit Nav.

Best Business Checking Accounts With Interest

Some business checking accounts pay interest, and may be as competitive as some business savings accounts. 

Bluevine Business Checking

Lending Club Tailored Checking

Axos Bank 

Axos Bank offers two checking accounts, Basic Business Checking and Business Interest Checking. With Business Interest Checking, earn up to 1.01% APY* and pay no monthly maintenance fee with an average daily balance of at least $5,000.

First Internet Bank Do More Business Checking

Business owners can earn 0.50% APY with an average daily balance of $10,000 with First Internet Bank’s Do More Business checking. There is no minimum balance and no monthly service fee. 

All information about First Internet Bank business bank accounts have been collected independently by Nav. These accounts are not currently available through Nav. To see what business checking accounts are available, please visit Nav.

Business Savings Account Rates

As you can see from the rates above, interest rates and APYs can vary significantly from one financial institution to another (at credit unions, they’re called dividends). Certificates of Deposit may offer a fixed rate for the term of the deposit, but for most other accounts they can change if interest rates change. Some banks will offer a higher interest rate for high minimum balances. 

How to Open a Business Savings Account

Once you decide which savings account is right for you, you’ll need to gather a few documents to open your account. Online banking-centric institutions will often let you open your account online, while others may want you to come in in-person to a branch. If you already have another account with a bank, you may be able to open a savings account online.

To open your savings account, you’ll need:

  • Business documents (DBA, articles of incorporation, articles of organization)
  • Government-issued photo ID for you and any other employees who need access
  • Employer identification number or social security number
  • Business details including your physical address, business structure, and revenue

Nav’s Verdict: Best Business Savings Accounts

If you want to improve your business financial health, a business savings account can help. It will allow you to set aside funds for periodic expenses, as well as unexpected ones, and if you earn interest that’s even better. You can start small, with a business savings account with a low or no minimum balance requirement and increase your savings as you grow your business. 

Nav makes it easy to find your best business banking, business credit cards, and lending options. Get started with Nav now.  

Frequently Asked Questions About Business Savings Accounts

Are you still unsure about the ins and outs of opening a business savings account? It can be confusing to understand the differences between account options and what’s needed to set one up. Here are answers to some of the most common inquiries.

Who Pays the Highest Interest Rate on Business Savings?

Live Oak Bank offers the best APY on a business savings account at this time (updated April 10, 2023). And with no minimum balance requirement it can be a good voice for many small business owners. 

What Is A Business Savings Account (And How Is It Different From A Personal Savings Account)

A business savings account—and business checking account—is a better choice for small business owners than using personal savings or checking accounts.  

Establishing a business bank account can help you separate your personal finances and business finances, and also can be essential if your business wants to qualify for a small business loan in the future. 

Do I Need a Tax ID to Open a Business Checking Account?

If you operate as a sole proprietor (individual business owner), you may be able to open a business checking account without an EIN depending on the bank’s policy. For LLCs or corporations, an EIN will be required. 

You’ll also want some common documentation, such as your business incorporation papers (if applicable) and proof of address. 

If you already have a checking account or business credit card with the bank or credit union where you want to open a savings account, it’s possible you won’t need to present this documentation again, assuming none of your information has changed since you last opened an account.

Do I Need To Have A Business Checking Account Before I Can Get A Business Savings Account?

Not necessarily. Some business savings accounts allow you to open an account without a business checking account. Others may be linked: you open a business checking account and then open a savings account with the same financial institution.

As a practical matter, though, you probably need a business checking account if you don’t have one. It’s best practice to use a business bank account for your business expenses, and to avoid mixing business and personal finances. 

Do I Need A Good Credit Score To Get A Business Savings Account?

Not necessarily. Most banks don’t check personal or business credit scores to open a business savings account (though they may), but they may use Chexsystems, a type of consumer reporting agency, to check whether you or your business has had a history of overdrafts, unpaid fees, or other problems with other bank accounts. You can check your Chexsystems report for free here

Is A Business Savings Account A Good Investment?

Interest-bearing savings accounts can be a safe way to set aside money for savings without the risk of volatility that comes from investments in stocks, bonds, mutual funds or ETFs. Savings accounts are also liquid: if you need money quickly you can withdraw it easily. 

Rising interest rates mean that your savings can earn interest as well. You may not earn as much as you potentially could elsewhere, but you also don’t stand to lose money as easily as with other types of investments. 

That said, make sure you review and understand FDIC insurance limits. In the event of a bank failure, this could be crucial. The FDIC offers the Electronic Deposit Insurance Estimator to help you understand insurance rules and limits that apply to a depositor’s specific group of deposit accounts, including personal and business accounts. 

If you hold your business savings account with a federally insured credit union, use the National Credit Union Administration’s (NCUA) Share Insurance Estimator which offers similar information.

This article was originally written on April 30, 2022 and updated on June 7, 2023.

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