The Best Business Savings Accounts of 2020
Running a business means juggling a lot of financial matters in order to run a successful venture -- and for that, you’ll need a few different bank accounts at your disposal.
Expenses, revenues, debits, and credits call for a business checking account to manage your money and balance the books. Need to borrow some funds? A small business loan fits the bill.
With all that cash flow, overhead and profit margin, it’s sometimes easy to forget that a business also needs to save money as well as earn and spend it.
A range of dedicated business savings account serve that very purpose: to save money earned for future business goals, plus gain interest with liquidity to your savings in one place.
Finding a business savings account is so easy, in fact, that it presents a dilemma for small-to-medium-size business owners of which one to choose.
We conducted research into business savings accounts from 30 different financial providers, narrowing down our top three picks based on fees, interest rates, branch access and more:
- Best Overall: Capital One Business Advantage Savings
- Best Traditional Savings: Chase Business Savings
- Best Online: Live Oak Bank
Best Overall for Businesses: Capital One Business Advantage Savings
Capital One Business Advantage Savings Pros & Cons
Capital One’s commitment to banking service spans from credit cards to loans to other investment and deposit products for personal and business use alike -- and for its Business Advantage Savings Account, Capital One paired with Spark Business for anyone looking to invest into their business’ future.
Highlights of Business Advantage Savings (aka Spark Business Savings) include:
- A competitive APY for the first 12 months after account opening
- Zero monthly maintenance/service fees
- No minimum balance requirements
- Sync to a Spark Business Checking Account for overdraft protection
What makes the account the best overall is its flexibility, especially how ideal it is for small business owners who can’t make it to the bank and want the ability to bank digitally.
However, Capital One does offer the luxury of branch access mainly in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia.
But the big benefit is the bank’s sensitivity to the fact that most businesses deal with a variable, fluctuating cash flow, and for that, there are no surprise fees, monthly fees, or minimum balances required from depositors. Withdrawals are limited to six per month.
As for interest, Spark Business Savings gives customers the chance to save at a better rate than most traditional banks for one full year, before converting to a lower, albeit still competitive, APY.
Best Traditional Business Savings: Chase Business Total Savings
Chase Business Total Savings Pros & Cons
Chase’s Business Total Savings Account -- an account that promotes saving money to nurture future business growth -- gets our nod for best traditional savings account for mixing tried-and-true benefits that no business person who cares about their finances can do without.
For the small business owner, the Total Savings is a simple, well-rounded account with plenty of benefits to manage your savings:
- Mobile banking via the Chase app, like QuickPay and QuickDeposit
- Security, Daily and Instant Action account alerts
- Access to 16,000 branded ATMs
Take note that the Chase Business Savings Account does come with a $10 monthly service fee unless you carry a minimum $1,000 or more average ledger balance, or, if you’ve linked your account to a Chase business checking account.
It offers up to:
- 15 monthly deposited items at no charge
- $5,000 in monthly cash deposits without an additional fee
Interest rates, however, are not at all significant on Total Savings balances -- do not expect your money to earn too much interest in this account.
Best Online Business Savings Account: Live Oak Bank
Live Oak Bank Savings Pros & Cons
Live Oak Bank states on its website that its mission is in creating the best banking experience for small business owners, a tailored focus that makes it a good match for entrepreneurs who want to manage their money.
With its no-frills, easy online focus and no branch network, the bank’s Business Savings Account is also perfect for business owners who prefer to do their banking via mobile device or the web.
Start depositing into the FDIC-insured savings account and earn a market-leading interest, which Live Oak touts as 11 times the national interest rate average -- a high-yield way to save on par with most certificates of deposit.
Only here, your funds aren’t locked away, so if a withdrawal is needed, your money is liquid.
- Zero monthly maintenance fees
- Interest compounded, daily
- Online banking convenience -- electronic transfers, paperless statements, dynamic mobile app
If your business is thriving and you’re transacting money on a weekly, or even daily, basis, remember that the Live Oak Business Savings Account permits up to six transactions per billing cycle; transactions over that limit will trigger a $10 fee per transaction.
What to Look For in a Business Savings Account
Though many are similar, no two bank accounts are the same.
There’ll be bonuses for some, drawbacks for others that may be your deal breakers in deciding if you’ll open a business savings account, or passing on one. Here are some features to look for -- or in some cases, to be cautious of -- in a bank account:
Here are some features to look for -- or in some cases, to be cautious of -- in a bank account:
An assortment of bank accounts won’t charge monthly fees; you won’t be penalized for carrying a balance too low, and there won’t be any maintenance fees, mainly just a fee tacked on for banks to cover their overhead.
But some accounts do charge fees each billing cycle if you transact more than the minimum amount (that includes ATM transactions, too), or fall below that minimum account dollar amount, so read all the fee details before depositing your money into a new account.
If you’re stuck with fees, ask your bank about their fee waiver requirements.
They may be willing to forego a fee you’ve been charged, even if it’s once or twice.
Better yet, if there’s a minimum balance you need to meet, inquire if you can have it lowered, albeit temporarily, until you build enough savings in your account to avoid the bank’s fee altogether.
Monthly Fees for Basic Business Savings Accounts at Top 10 U.S. Banks
|Bank||Account||Monthly Fee||How to Waive Fee|
|Capital One||Spark Business Savings||$0||N/A|
|Live Oak||Live Oak Business Savings||$0||N/A|
|TD Bank||TD Small Business Savings||$5||
|Bank of America||Business Investment Account||$5||
|Chase||Chase Business Total Savings||$10||
|Santander||Basic Business Money Market Savings||$10||
|BB&T||Business Money Rate Savings||$10||
|Fifth Third Bank||Business Relationship Savings||$0||N/A|
|M&T Bank||Commercial Savings Account||$5||
|Citizen's Bank||Business Savings Account||$4.99 (fee is automatically waived for first 4 months)||
Monthly (free) deposits
Another fee-based detail to look for in a business-specific savings account is the ability to make monthly deposits for free, whether it’s cash, checks, or electronic transfers.
Business savings accounts tend to charge additional fees after you have:
- made a certain number of monthly deposits
- made a specific amount of monthly cash deposits
So, if you plan to make many deposits per month or tend to deposit a large amount of cash per month, you will need to take this into account when picking a business savings account.
Business Savings Cash Deposit and Transaction Fees at Top 10 U.S. Banks
|Bank||Account||Cash Deposit Processing Fees||Transaction Fees|
|Wells Fargo||Business Market Rate Savings||No fee for first $5,000, then $0.30 per $100 deposited||No fee for first 20 transactions, then $0.50 per item|
|Capital One||Spark Business Savings||No fee for first $2,000, then $2.00 per $1,000 deposited||None|
|Live Oak Bank||Live Oak Business Savings||N/A||No fee for first 6 transactions, then $10 per item|
|Bank of America||Business Advantage Savings||No fee for first $5,000, then $0.30 per $100 deposited||No fee for first 25 transactions, then $0.45 per item|
|Chase||Chase Business Total Savings*||No fee for first $5,000, then $2.50 per $1,000 deposited
*For all Chase business accounts, fee is only charged if you need a night drop, post verification, or immediate verification.
|No fee for first 15 transactions, then $0.40 per item|
|Santander||Basic Business Money Market Savings||$0.22 per $100 deposited for Express Cash Pack, or $0.15 per $100 (for deposits $500 or less), or $0.27 per $100 deposited (for deposits $500 or greater), for Non Express Cash Pack||None|
|BB&T||Business Money Rate Savings||No fee for first $5,000, then $2.50 per $1,000 deposited||No fee for first 20 transactions, then $0.39 per item|
|Fifth Third Bank||Business Relationship Savings||For deposits $25,000 or less, $0.026 per $1 deposited
For deposits between $25,000 and $100,000, $0.032 per $1 deposited
For deposits $100,000 or greater, $0.037 per $1 deposited
|No fee for first 100 transactions, then $0.515 per item|
|M&T Bank||Commercial Savings||No fee for first $5,000, then $0.25 per $100 deposited||No fee for first 10 transactions, then $1.00 per item|
|Citizen's Bank||Business Savings||No fee for first $5,000, then $0.75 per $1,000 deposited||No fee for first 200 transactions, then $0.50 per item|
Arguably one of the most important factor to consider in any deposit account, checking or savings, is the interest rate you might earn. A higher interest rate means more money in your pocket, and a chance to offset fees (if your account carries them).
Different banks carry different interest rates, and most aren’t fixed, so tap into the highest APY you can find right now.
While a traditional bank can prove to be very convenient for branch access, its interest rate might be too low for business owners who want to start saving aggressively.
On the other hand, online banks offer better savings rates, mainly because they don’t have the extra, added expense of managing physical branches, paying utility bills, or staffing onsite employees.
Linked business checking at the same bank
One more mention of fees again: Often, financial providers will waive their fees if you link your savings account with a checking account through the same bank. But in your case, you might need the capability to link accounts, never mind fees.
Linking accounts is a convenient option that allows you to make deposits into your checking account, and arrange automatic deposits into your savings, and vice versa, without the added burden of making deposits manually.
Despite the simple convenience of an online savings account, sometimes you want the ability to walk into a branch location, deal with a teller, or open a safety deposit box in the bank vault.
If those are important for you, look for a bank with a brick-and-mortar focus.
Major bank names like Chase, PNC or Wells Fargo won’t have any shortage of ATMs, but if online is your preferred way to bank, see if they have any branded ATMs within proximity.
If not, if you’ll be charged fees for withdrawing at a non-branded ATM.
Why Do You Need a Business Savings Account?
Both allow you to deposit money, withdraw money and earn interest, making it redundant to have both at the same time.
Separate the funds
One big reason is that you shouldn’t commingle your checking and savings funds together -- and that goes not only for business banking, but your personal banking, too.
Money in a savings account is meant to be saved, left untouched, compounding interest without being withdrawn very often.
In that case, having two dedicated accounts gives you a checking account to deposit and withdraw from regularly while letting your savings account sit tight.
A business savings account is another form of an emergency fund. Having money on hand in the event of slow business, economic downturns, or just unexpected expenses, can come in handy when you least expect it.
Deposited funds in a business savings account are also protected by the federal government up to $250,000, a big benefit once you start building capital and your business’ worth.
Easier loan approval
Bolstering your savings account balance may also aid you in getting approved for a small business loan one day.
Since lenders or banks will take note that you have the financial means to repay the money, they're more likely to lend to you. In turn, your credit score and profile are strengthened.
Lastly, a dedicated savings account can be your best business partner come income tax time.
It’s easy to forget that some of your revenue (especially if it’s freelance or 1099-based) is pre-tax, gross pay. You’ll need to deduct taxes yourself when filing season rolls around.
Having money in a business savings account provides enough cash in those moments when you owe money to the IRS.
It’s a must that a business saves money, and a given that yours needs a dedicated business savings account.
Opening one is another way to manage your finances, build interest, save for short- and long-term expenses, or simply to have extra cash on hand without the need to borrow it too often.
A good business savings account provides you a stockpile of funds on hand for everything from taxes to retirement planning, plus, it puts you in a place to graduate to other banking products, from CDs to investments like stocks and bonds.
A business savings account gives your business a professional financial aspect, helping you in the lending and business games, but most importantly, creates the security and financial health your business needs from day one.