The best business savings accounts in April 2024 (2024)

Why get a business savings account?

Different companies use business savings accounts for different purposes and goals. Here’s a look at a few reasons you should get one:

1. Growth: The interest you earn helps your money grow.

2. Safety: Business savings accounts that are insured by the FDIC or National Credit Union Administration protect your funds up to $250,000 per depositor. Many business savings accounts even have expanded FDIC coverage.

3. Flexibility: Having a separate account devoted to savings means your business will have funds to tap into if it needs to cover an unexpected expense or finance expansion.

Understanding business savings accounts

The first thing to understand about a business savings account is that the money you keep there should be looked at as a rainy day fund rather than a way to finance day-to-day operations. You don’t want it to be an account you need to access daily. Building a large business savings account prepares your company for unplanned expenses, a dip in revenue or a financial emergency.

The amount of money you should keep in a business savings account depends on the type, size and goals of the business.

Benefits of a business savings account

Business savings accounts have several advantages, including the following:

• Provides a secure place to keep surplus money and earn interest.
• Serves as a fund that can later be used to finance growth through acquisitions, expansion, equipment purchase, hiring and similar moves.
• Prepares your business for unexpected events such as a sudden dip in revenue or a major expense.
• Lets you set aside money for tax payments that you might otherwise overlook while running your business.

How to choose a business savings account

The first step in choosing a business savings account is determining your company’s needs and goals, both short- and long-term. You don’t want to move money needed for day-to-day operations into a savings account. Once you’ve built up enough excess cash in your checking account, then you can look into different business savings account options.

Here are some things to consider when choosing a business savings account:

• Savings rate: Ideally, you want to get the highest APY possible.
• Location: If you put a high priority on branch banking, then you want to find an account offered by banks with local branches.
• Introductory offers: Some banks offer high rates and other perks for opening an account with them.
• Fees: Research what the bank charges in terms of monthly service fees, transaction fees and early termination fees, and how you can avoid them. The best option is to find an account that charges no fees.
• Minimum account balances: Some banks might charge fees if you fall below the minimum account requirements.

Setting up a business savings account

Opening a business savings account is similar to a personal account, except you must provide additional documentation. If you are opening an account at a bank where you already have a business checking account, it might just involve clicking on the savings account link and making a deposit. Otherwise, you’ll need to start by providing information such as your business name, address and contact info, either online or at a branch.

Here are some other documents you might need to provide, according to the Small Business Administration:

• Employer Identification Number (EIN) or Social Security number if you’re a sole proprietorship
• Business formation documents
• Ownership agreements
• Business license

Depending on the bank, you might also need to make a minimum opening deposit.

Business savings account fees and costs

Many business savings accounts charge no monthly service fees, especially online-only banks that aren’t stuck with the costs of building, staffing and operating branches. But at traditional banks, you’ll likely face fees and other costs, though some can be waived. Here’s a look at some of the fees you might face with a business savings account:

• Monthly service fee: These typically are $10 to $20 and can be waived by maintaining a minimum balance, adding other accounts or joining rewards programs.
• Deposited items fee: Some banks will charge a fee of about $0.50 per deposited item after you have reached a certain monthly limit. For example, your first 25 deposited items per month might be free, and after that, you will have to pay for each additional item.
• Cash deposit processing fee: This might kick in after reaching a certain deposit limit for the month, such as $5,000. When you go above that limit, you could face fees of $0.30 or so per $100 additional deposit.
• Early termination fee: Some banks might charge fees for terminating accounts too soon.

Tips for maximizing business savings

The best way to maximize your business savings is to find an account with a high APY and no fees. This ensures that you get the highest possible return at the lowest cost. Beyond that, here are some other things you can do.

1. Establish a monthly savings goal and set up automatic transfers in that amount each month. This ensures that you stay focused on building your savings at regular intervals.

2. Don’t withdraw money unless absolutely needed. A business savings account is not supposed to pay your bills. For that, you can use the cash flow from your checking account. Maximizing your business savings means leaving it alone to grow.

3. Adjust your goals and deposits as needed. Just because you have set monthly savings goals doesn’t mean you can’t change them. As your business expands and you see greater cash flow and profits, increase your monthly goal to accelerate your savings.

Methodology

CNN Underscored Money analyzed accounts from 30 financial institutions to create the rankings for the best business savings accounts. This included accounts from a mix of traditional banks, online banks and credit unions that are available nationally. We ranked each account on 14 data points across six categories.

Here are the categories we analyzed and how we weighted each:

APY (50%)

APY is a critical factor for business savings accounts because this determines how quickly your deposit will grow. Accounts with higher APYs scored better.

Fees (20%)

Fees are a critical factor to consider with your business savings account because they can eat away at any interest earnings, especially if an account has a high monthly maintenance fee.

Minimums (10%)

Minimum opening deposits and minimum balances to avoid monthly fees affect how many people can access accounts, so we rewarded accounts that more people can use.

Access (10%)

This is an important factor to consider because the more frequently your interest compounds, the faster your deposit grows and the more frequently you will potentially have access to your interest earnings.

Customer experience (5%)

It’s important to have a bank that’s trustworthy and easy to reach when you need help. We considered customer service availability and Trustpilot ratings in this category.

Digital experience (5%)

You’ll want a bank with a usable app and plenty of online features so that it’s easy to bank from anywhere. We analyzed app reviews and the ability to bank online.

Frequently asked questions (FAQs)