So you run a business and want to make the most of your hard-earned money. Smart thinking. Your cash flow is the lifeblood of your company, so you need a reliable place to stash your extra funds that will actually generate a decent return. Forget the basic business checking account—it’s time to upgrade to a high-yield savings account. We scoured the market to find the top accounts for 2024 that offer competitive rates, low fees, and benefits for businesses. Whether you have $5,000 or $5 million burning a hole in your pocket, one of these accounts is sure to give your money the growth and security it deserves so you can get back to growing your business. Read on to find your new favorite
place to watch your money thrive.
What Are Savings Accounts and Why Do Businesses Need Them?
As a business owner, you know that managing money is critical. One of the most important tools for doing that is a basic savings account.
What exactly is a savings account?
A savings account is a deposit account held at a bank or credit union that allows you to earn interest on the money you deposit. The funds in a savings account are very liquid, meaning you can withdraw your money at any time without penalty.
Savings accounts are essential for businesses for several reasons:
• They provide a safe place to keep your money accessible for short-term needs while still earning interest. Whether it’s for meeting payroll, paying vendors, or covering unforeseen costs, a savings fund has you covered.
• They offer stability. The money in a savings account is FDIC-insured for up to $250,000 per account. This means your money is secure even in the unlikely event your bank fails.
• They generate interest. While rates are often low, your money can still grow over time through compound interest. Even a little bit of interest is better than none at all.
• They keep your money separate. A dedicated business savings account helps ensure your business funds are not commingled with your personal accounts. This makes accounting and tax reporting much simpler.
• They provide convenience. Most savings accounts today offer amenities like online banking, bill pay, mobile check deposit, and ATM access. This makes it easy to manage your business’s money whenever and wherever you need to.
In summary, a basic business savings account is the foundation for good financial management and security. While interest rates may not make you rich, the peace of mind and convenience they provide are well worth it.
Features to Look for in Business Savings Accounts
When choosing a business savings account, there are a few key features to consider:
The higher the interest rate, the more your money can grow. Look for accounts offering at least 1-2% APY to keep up with inflation. Some banks offer tiered rates where your yield increases as your balance grows.
Minimum Balance Requirements
Many accounts require you to maintain a minimum balance or you’ll face monthly fees. Look for a low or no minimum balance so you can avoid extra charges, especially when you’re just getting started.
Some accounts limit the number of withdrawals or transfers you can make each month. More transactions mean more flexibility, so look for accounts with at least 6 fee-free withdrawals per month.
Watch out for monthly maintenance fees, overdraft charges, and fees for going below the minimum balance. The fewer and lower the fees, the more money stays in your pocket.
Being able to access your account and make transfers or withdrawals on the go is essential for busy businesses. Look for accounts that offer robust mobile banking apps and online account management.
By considering factors like interest rates, minimum balances, transaction limits, fees, and mobile access, you can find a savings account tailored to your unique business needs. Do some research, compare your options, and choose an account that lets your money work for you. The extra effort can really pay off in the long run.
The Top 5 Business Savings Accounts of 2024
The business savings account landscape is always changing. Here are the top 5 business savings accounts to consider for your company in 2024:
Chase Business Savings offers competitive interest rates and no monthly maintenance fees. You’ll earn interest on all balances and there are no minimum balance requirements. Deposits and withdrawals can be made easily through Chase’s large ATM network, online, mobile, wire transfer, or at any Chase branch.
American Express is a trusted name in business and their high-yield business savings account lives up to expectations. In 2024, they are offering one of the highest APYs for business savings accounts. There are no monthly fees as long as you link an eligible American Express business checking account. Deposits and withdrawals can be made online, mobile, ATM, wire transfer, or by mailing in a request.
Wells Fargo’s Business Choice Savings account provides competitive interest rates with the security of an established bank. There are no monthly service fees or minimum balance requirements. You have 24/7 access to your funds through online and mobile banking, as well as Wells Fargo’s extensive ATM network and branch locations.
Barclays Online Savings for Business is an ideal high-yield savings account for the digital age. In 2024, they are offering very attractive APYs and no monthly maintenance fees. All transactions are handled remotely through online and mobile access. There are no physical branch locations.
Synchrony Bank’s Optimizer+ for Business account provides high APYs, no minimum balance requirements, and no monthly fees. You can access your funds 24/7 through online and mobile banking. Synchrony is an online-only bank so all transactions are handled electronically. There are no physical branch locations. For business owners looking to earn solid interest on savings without the hassle of visiting a traditional bank, Synchrony Optimizer+ is a great choice.
What to Consider When Opening a Business Savings Account
When opening a business savings account, there are a few key things to keep in mind.
One of the most important factors is the interest rate offered. Look for an account with a competitive rate so your money can grow as quickly as possible. The higher the interest rate, the faster your balance will increase. Some banks offer tiered interest rates where your rate will increase as your balance grows. Make sure you understand how the bank calculates interest and how often they compound it.
Pay attention to any fees the bank charges for business savings accounts like monthly maintenance fees, overdraft fees, or transfer fees. Some banks waive certain fees if you keep a minimum balance. See if the bank’s fee structure works with how you plan to use the account.
Consider how easily you can access your funds. Most business savings accounts limit the number of withdrawals to 6 per month. Make sure that the policy works for your needs. Also check if the bank allows online access, wire transfers, debit cards, or checks. The more options, the more convenient the account will be for your business.
Look for a bank that provides quality customer service for business customers. They should have bankers who understand the needs of business owners and can answer questions about business accounts, lending, and other financial services. Good customer service can help make banking easier for your company.
See what other business services the bank offers beyond just savings accounts. They may provide business checking accounts, loans, lines of credit, merchant services, payroll solutions, and more. Using a bank that can meet all your financial needs is ideal. Opening other accounts at the same institution may provide fee waivers or bundled account discounts.
Choosing the right business savings account for your company is an important decision. Compare options from different banks to find one that suits your needs and helps your business’ money grow steadily over time.
Frequently Asked Questions About Business Savings Accounts
As a business owner, you likely have some questions about opening and maintaining a business savings account. Here are the most frequently asked questions and answers to help you make the best choice for your company.
What are the benefits of a business savings account?
Business savings accounts provide a safe place to keep your money while earning interest over time. The main benefits are:
- Liquidity – Your money is easily accessible when you need it for operating expenses or other short-term needs.
- Interest earnings – Although rates are generally lower than other options, your money can still generate extra funds over time through compounding interest.
- Separate from personal accounts – Keeps your business and personal finances separate, which is important for accounting and tax purposes.
- FDIC insurance – Up to $250,000 of your funds are insured by the FDIC in case of bank failure.
How much does it cost to open a business savings account?
Most business savings accounts are free to open and maintain. Some banks may charge monthly service fees if your balance drops below a minimum threshold, typically $500-$2,500. Shop around at different banks to find one with no or minimal fees based on your expected balance.
How much interest will I earn?
Interest rates on business savings accounts vary by bank and are often lower than rates for personal savings. You can expect to earn between 0.01% to 0.5% APY currently. While not a lot, any interest earned is better than none at all. Check bank websites for their current rates and see if they offer rate bump-ups as your balance grows.
Is there a minimum balance requirement?
Most banks have a minimum opening balance requirement of $100 to $500 to open a basic business savings account. Ongoing minimum balance fees typically range from $500 to $5,000. If your balance drops below the minimum at any time, you may incur monthly service charges. Again, compare accounts at different banks to find one with minimums you can comfortably meet.
Can I access funds anytime?
Yes, a major benefit of a business savings account is easy access to your money. You can withdraw funds at any time by transferring to a linked business checking account, withdrawing cash at an ATM, or visiting a bank branch. However, federal regulations limit certain types of withdrawals to six per month. Check with your bank for their specific transaction limitations and fees.
That covers the top 5 savings accounts for businesses this year. Now it’s up to you to evaluate your cash flow needs, risk tolerance, and other factors to determine which account is the best fit for your company. The good news is there are solid options out there with competitive rates and features to suit any business. Whether you’re looking to stash emergency funds, save for short-term goals, or maximize interest, one of these accounts should do the trick. The hardest part is just getting started – but once you do, you’ll be earning more on the money your business already has. So what are you waiting for? Open an account and watch your balances grow. Your future self will thank you.