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Key takeaways
- The best bank for a business savings account depends on various factors including interest rates, fees, accessibility and services.
- Online banks typically offer higher APYs and lower fees, while national and regional banks provide a more personalized banking relationship and additional business services.
- Look beyond interest rates when selecting a business savings account. Factors like monthly fees, withdrawal limits and additional services can significantly impact the value of the account.
- Business savings accounts come in different forms, such as high-yield savings accounts, money market accounts and CDs.
Selecting a business bank account is an important decision, one that should be based on a variety of key considerations, including interest-earning potential, account fees, minimum balance requirements and account features. Understanding each of these factors and the role they play is essential to selecting an account that your business will ultimately benefit from.
These are the steps to take to help you find the right savings account.
Bankrate insight: Why it’s important to find the right bank
Picking the right bank for your business savings account is crucial to managing cash flow, maximizing savings and minimizing fees. The right banking partner can offer financial stability, including safeguarding your funds and supporting long-term business growth and success. In addition, a good banking partner will provide the right level of support for your business, along with access to tools that can simplify the financial management of your business’ cash flow.
Consider interest rates
Interest rates offered with a business savings account are one of the top factors to review. Keep in mind that at traditional banks, the rates that come with a business savings account are often similar to those of a personal savings account. Online-only banks, which have no brick-and-mortar locations and lower overhead costs, however, are known for offering more competitive rates. Credit unions are also worth exploring and may offer more competitive rates.
While you may want to pursue the highest interest rate possible, there may also be some drawbacks. For instance, the interest rate may fluctuate based on market conditions. Additionally, there may be steep minimum balance requirements in order to obtain the most lucrative advertised rates.
It’s equally important to remember that while a high annual percentage yield (APY) is important, it shouldn’t be the sole factor in choosing a bank. Excellent customer service, flexible access to funds and valuable business banking services can outweigh the benefits of slightly higher interest earnings. Also, consider that banks with high fees can wipe out any competitive gains you would have otherwise made.
Is it worth getting an account just for a promotional interest rate offer?
Some accounts may offer promotional APYs that drop after an initial period, so they may not always be worth pursuing. Always check for long-term rate stability. You’ll also want to verify how frequently interest compounds, since daily or monthly compounding can make a difference in your earnings. Remember to also weigh the trade-off between liquidity and returns when considering an account with a promotional interest rate offer. Some high-yield accounts may impose withdrawal restrictions that could limit your access to funds when you need them most.
Evaluate the fees
There are often fees associated with business savings accounts. Here are some of the most common.
| Fee type | |
| Monthly maintenance fee | Charged to cover the cost associated with routine administrative support |
| Excess withdrawal fee | Applied when the number of monthly withdrawals allowed is exceeded |
| Transaction fee | If the account limits the number of total monthly transactions, a small fee may be charged for each additional transaction |
| Minimum balance fee | Penalty for not maintaining the minimum required balance in the account |
Consider your business needs and goals
Ultimately, it’s best to select an account that broadly aligns with your business’ goals and needs – both short-term and long-term.
Consider how your business functions and how often you may need to access the money, particularly if there is a limit on transactions or the account requires leaving the money untouched for a specified period of time. Does the account require a minimum balance and will you be able to maintain that balance based on your business’ cash flow patterns? And will the interest rate allow you to reach your goals for the account?
Rather than making a decision based on one of these factors alone, consider the big picture and how the account supports your business objectives.
Is a money market account or traditional savings account better for your business?
Determining whether a money market or traditional savings is best comes down to your business’ financial goals and needs. Money market accounts offer high interest rates, which can help quickly grow cash that’s not being used. There may be limits on monthly transactions, but often these limits are more flexible than a traditional savings account. The interest associated with a business savings account, on the other hand, is usually lower than a money market account and this type of account typically comes with stricter withdrawal rules.
Compare withdrawal and transaction limits
Many banks charge withdrawal fees and excess withdrawal fees when you go over the allowed number of monthly transactions. Look for accounts that minimize these costs — or better yet, either waive them if you meet balance requirements or don’t have them at all.
Look for additional features
Business-specific features can make a significant difference in how efficiently you manage your savings. Some of the additional features to look for include:
A dedicated business banking team can also offer helpful advice and tools, from cash flow management to lending options.
Read customer service reviews or third-party reviews
It’s always a good idea to read online reviews for a bank, credit union or other savings account provider to find out how other customers feel about the quality and level of service provided. Googling the institution’s name can help you find reviews. You can also check the Better Business Bureau website. In addition, Bankrate also reviews the best business savings accounts.
Bottom line
Choosing the right bank for your business savings account requires balancing interest rates, fees, accessibility and banking features. Whether you prioritize digital convenience, in-person service or high-yield returns, carefully comparing your options will help you find a bank that aligns with your business goals.
Once you set up an account, consider enabling automatic transfers to build your business’s savings consistently and reviewing your account periodically to ensure it still meets your needs. If your business grows or your financial goals change, don’t hesitate to switch banks or explore additional savings options that offer better benefits.
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