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In a nutshell
If your business normally maintains significant deposit balances, you owe it to yourself to earn interest on those deposits by opening one of the best business savings accounts. Other reasons to open a business account include:
- Some legal structures for businesses require a business bank account.
- It makes accepting credit card payments easier.
- Tax preparation is also easier.
We selected six of the best business savings accounts from the many that are available. Each pays a high rate of interest and offers other benefits. The table below provides a summary of the rates and benefits for each of the six banks.
| Bank | APY | Minimum deposit | Monthly service fees | Best for |
|---|---|---|---|---|
4.15% | $0 | $0 | High interest | |
4.00% | $0 | $0 | FDIC insurance up to $10 million | |
3.85% to 4.25% | $0 | $0 | Interest paid on all business accounts | |
3.50% on up to $1 million | $25 | $0 | Money market account | |
3.45% to 5.46% | $100 | $5 | High interest on high-balance accounts | |
1.00% to 4.10% | $250 | $3 | Full-service online business bank |
Best for high interest: Lili Savings Account
Lili
Lili
Lili Savings Account takes the top spot on our list for a business savings account paying high interest. The account currently pays 4.15% APY on up to $100,000 in savings. It’s a companion account for the Lili Business Banking account, which is designed specifically for businesses.
Lili is an online banking app that provides a Visa business debit card, complete with cash-back rewards. You can set joint account access with a debit card for each account owner. As a Lili Bank customer, you’ll also have access to accounting software, invoicing software and even tax preparation.
Other features include:
- $0 minimum deposit and no minimum balance requirements.
- Transfer excess funds to the savings account and earn 4.15% APY on the first $100,000 (no interest earned on higher balances).
- No monthly maintenance, overdrafts, ACH, incoming domestic wire or foreign transaction fees.
- ATM access at more than 38,000 fee-free in-network ATMs.
Best for FDIC insurance up to $10 million: Live Oak Bank
Live Oak Bank Business Savings
Live Oak Bank Business Savings
Promotion Details
New and Existing Customers:
- Only one bonus is available per legal entity.
- Only business savings accounts are eligible for the bonus offer. Checking accounts, personal (consumer) accounts, CD accounts and fiduciary accounts (e.g., trusts) are not eligible for this offer.
- Opening of a new account will be subject to approval by Live Oak Banking Company in its sole discretion.
- A new Live Oak Bank business savings account must be fully funded with at least $50,000 by 11:59 p.m. Eastern Time on 4/30/2024 to be eligible for the bonus. If the account is not fully funded by April 30th, then the account is not eligible for the bonus offer.
- All funding of the new business savings account must consist of funds originating from an external financial institution to qualify; deposits or transfers originating from an existing Live Oak Bank account (whether personal or business) via internal transfer, CD redemption, check, ACH transfer, wire, or loan proceeds do not qualify for bonus offer.
- Beginning on the date in April 2024 the new account attains a balance of at least $50,000, if the balance remains equal to or exceeding $50,000 for 90 consecutive days, then the account will be eligible for the bonus if all other conditions are met. If all conditions are met, the $300 cash bonus will be deposited to your open, eligible account within 45 days following the expiration of the 90-day period.
- Bonus Offer cannot be combined with any other savings offer.
- The new account must not be closed or restricted at the time of payout in order to receive the bonus. Live Oak Bank reserves the right to withdraw or withhold the bonus offer from any customer, with or without notice, if fraud or other suspicious activity is suspected.
Live Oak Bank is an online small business banking app that offers offers high-yield savings, high-interest CDs, and business checking accounts. For example, there are three-month to five-year CDs paying between 2.00% to 5.00% APY. Savings held with Live Oak are FDIC-insured for up to $10 million if you become a member of their Insured Cash Sweep program.
Live Oak also provides small business loans. Those include commercial loans, small business administration (SBA) loans and US Department of Agriculture loans.
Other features include:
- Pays high interest on up to $100,000 in savings.
- FDIC insurance on up to $10 million in deposits.
- No minimum deposit requirements and no monthly maintenance fees.
- Other fees: stop payment, $25; returned item, $5; outgoing wire, $19.
- Account can be connected with QuickBooks.
- Offers small business loans.
Best for interest paid on all business accounts: Prime Alliance Bank
Prime Alliance Bank Business Savings
Prime Alliance Bank Business Savings
Prime Alliance Bank offers their Business Savings Account with very attractive rates and tiered pricing. They currently pay 3.85% APY on balances up to $99,999.99, 4.05% on balances between $100,000 and $199,999.99 and 4.25% on balances of $200,000 and above. They also offer a Business Money Market account with identical rates.
Their Business Interest Checking account also pays interest between 0.05% and 0.20% APY. The account comes with no minimum balance requirement or monthly maintenance fees, no transaction limits and a Visa debit card. The bank also offers CDs with high yields on all terms, and commercial loans, including real estate and SBA loans, as well as commercial lines of credit and equipment lease financing.
Other account features include:
- Pays high interest on all business accounts and on all savings account tiers.
- No monthly maintenance fee.
Best for money market account: TAB Bank
TAB Bank Business Money Market
TAB Bank Business Money Market
TAB Bank offers their Business Money Market account that currently pays 3.50% APY on the first $1 million on deposit, then 0.25% on balances above. A minimum of $25 is required to open the account and you must have at least $1 in the account to earn interest. The account also comes with ATM card access.
TAB Bank also offers a full range of other business services, including accounts receivable financing, asset-based lending, business lines of credit, equipment financing, treasury management, business checking, CDs and other services.
Other account features include:
- $25 minimum initial deposit, then $1 minimum to earn interest.
- No monthly maintenance fee.
- Other fees: stop payment, $25; returned deposited item, $30; incoming wire, $15; outgoing wire, $30.
Best for high interest on high balance accounts: First Internet Bank Money Market Savings
First Internet Bank Money Market Savings
First Internet Bank Money Market Savings
First Internet Bank is an online bank paying very high interest on their Money Market Savings account. With a minimum deposit of just $100, you can earn 3.45% APY. But if you have at least $5 million on deposit, you can earn 5.46% APY. There is a $5 monthly maintenance fee, but it can be waived with an average daily balance of $4,000. The account is designed for sole proprietors only.
First Internet Bank also offers high-yield CDs, including a 12-month CD currently paying 5.35% APY. Commercial checking accounts are available, with business services, including treasury management and merchant services. They also offer commercial lending, commercial real estate lending and SBA loans.
Other account features include:
- $100 minimum deposit.
- 3.45% APY paid on all balances, but 5.46% APY paid on balances in excess of $5 million.
- $5 monthly maintenance fee can be waived with an average daily balance of at least $4,000.
- Also offers high-yield CDs and business lending.
Best full-service online business bank: Capital One
Capital One Business Savings Account
Capital One Business Savings Account
Capital One operates completely online, but it does so as a full-service bank. That means it offers a complete range of both personal and business banking products. On the business side, that includes business checking and savings accounts, as well as loans and lines of credit, card payment processing, trade credit and seven business credit cards.
Other account features include:
- $3 monthly maintenance fee can be waived with a collected balance range over $300.
- Other fees: deposit up to $10,000 per month, no fee, then $1 per $1,000 deposited; ATM withdrawals, $5; domestic incoming and outgoing wire, $15 and $25, respectively; foreign incoming and outgoing wire, $15 and $40, respectively; nonsufficient funds, $35; stop payment, $35.
- Capital One has more fees than the other banks on this list.
How to choose the right business savings account for you
There are a number of factors you’ll need to consider when choosing the right business savings account for you.
Those factors include:
- Minimum initial deposit: it must be an amount you can easily make.
- The minimum ongoing balance requirement: this must be consistent with the amount of extra cash you expect to have available at all times.
- Interest: the rate should be higher than what you can get from alternative accounts.
- Customer support: should be available during your normal hours of business and preferably by phone.
- Online and mobile banking availability: to free you from the need to visit a brick-and-mortar branch.
- Other business services: though it may make sense to maintain a dedicated bank for a savings account, it’s generally easier when you can handle all your business banking with the same institution.
How to open a business savings account
The specific procedures for opening a business savings account will vary by institution. You can contact the bank to learn what those requirements are.
You can typically expect the following to be required:
- Your personal information, including your Social Security number, date of birth, physical address and contact information.
- Your business name, especially if it is a corporation, partnership or limited liability company (LLC).
- Relevant information for your business, including your primary location, type of business, number of employees, how long you’ve been in business and your approximate annual sales.
- The employer identification number (EIN) for your business.
- Personal information for any other owners of the business, including the percentage of ownership each holds.
The bank may ask for specific documentation, including a business license, articles of incorporation (if you are incorporated) and even a reference letter from an attorney or CPA. You’ll also need to link a checking account to the savings account and provide the minimum required initial deposit, if any.
Business savings account pros and cons
Pros:
- Business savings accounts enable you to keep your business savings separate from personal savings.
- Earn above-average interest on your excess cash.
- Easily transfer funds to and from a connected business checking account. (Note: some of the banks on our list do not offer checking accounts.)
- Many banks that offer business savings accounts also provide many other business services.
Cons:
- Business savings accounts often come with fees not charged on personal savings accounts.
- There may be charges for deposits, either by dollar amount or by the number of transactions.
- High-interest business savings accounts are far less common than high-interest personal savings accounts.
Alternatives to business savings accounts
In this guide we have focused on business savings accounts providing high interest. But if this type of account doesn’t work for you, there are alternatives.
Standard business savings accounts
Most commercial banks offer business savings accounts, though the interest they pay on these accounts is usually below average. They may also be heavy on account fees.
Business certificates of deposit
These certificates often pay interest that’s higher than what’s available on business savings accounts. However, your money is tied up for the term of the CD and there will be early withdrawal penalties if you need to access funds before maturity.
Personal savings accounts
Not only are these more widely available than business savings accounts, but they often pay higher interest and charge no fees. The disadvantage is that you will be combining business savings with personal savings. However, this can be overcome by dedicating a personal savings account to your business. But if your business has a specific legal name, and especially if it’s a corporation, a personal account will not be able to be held under the business name.
Methodology
In determining the best business savings accounts, we considered the following factors: the APY being paid on the business savings account, the minimum required opening deposit, ongoing minimum balance requirement, and any monthly maintenance fees charged by the bank. We also looked at what the account or the bank is best for, other fees charged in connection with the account offered, and any interest rate contingencies, such as tiers or promotional rates.
Frequently asked questions (FAQs)
Can I open a savings account for a business?
Yes, but they are not as commonly available as personal savings accounts. First, business savings accounts are only available at commercial banks. They are not provided by credit unions or banks that do not offer business accounts. Second, only a handful pay interest rates comparable with personal savings accounts. You may have to investigate multiple banks before finding the right business savings account for you.
Which bank is best for a business savings account?
We believe the best business savings account is offered by one of the six institutions included in this guide. However, there may also be a local bank in your area that similarly offers a high-yield business savings account option, along with other business services. And of course, you should always start your search with the bank you are currently working with.
Should my LLC have a savings account?
The fact that your business is an LLC isn’t the primary criteria for having a business savings account. You should only have an account if you regularly have excess funds you want to hold within your business and earn high interest.
Is it good to have a business savings account?
It’s a good idea if your plan is to keep your personal and business savings separate, which is always recommended when it comes to tax preparation. Once again, it makes perfect sense if you regularly maintain excess funds in your business and want to earn high interest on those funds.
Having a business savings account does become more important if your business is a separate legal entity, like a corporation. That’s because any funds withdrawn from the business can be considered taxable distributions. But if you retain those funds in the business, earning high interest on a dedicated business savings account, it can be an excellent way to minimize your personal tax liability.
AP Buyline’s content is created independently of The Associated Press newsroom. Our evaluations and opinions are not influenced by our advertising relationships, but we might earn commissions from our partners’ links in this content. Learn more about our policies and terms here.