Forbes Advisor analyzed 34 checking accounts from 23 financial institutions for the list. These include an assortment of brick-and-mortar banks, credit unions, and online banks. Each performance was ranked with 22 points of data across the categories of access, fees, customer experience, online experience, minimums, APY and.
This is the following amount of weight each category is assigned:
- APY: 40%
- Fees: 20%
- Digital experience 10 percent
- Customer experience: 10%
- Minimum deposit requirement: 5%
- Minimum balance requirements: 5 percent
- Access*: 10%
For more information about our review and rating method and the editing process, please read our detailed guide on how Forbes Advisor Reviews Banks.
Access means whether or not the account connects effortlessly to business checking accounts and whether it comes with a credit or ATM card, whether the bill has the check-writing ability, branch network size ATM network size.
What Is a Business Savings Account?
A savings account for businesses is an account that small-sized companies may utilize to store a cash reserve. Most often, a business savings account will be opened together with a corporate checking account to set up a method to transfer money from one account to another swiftly as required.
Another reason to have a savings account is to put cash aside for unexpected expenses and hold the funds to make taxes and safeguard against the risk of overdrafts.
How Does a Business Savings Account Work?
The business savings account functions similarly to a savings account, but it’s designed for use by businesses. Based on the institution or particular version your company is using, it may be required to satisfy balance or deposit needs or be charged a monthly service charge to keep a business savings account or get the interest.
Savings accounts in business can carry limits on transactions based on the institution. Savings accounts, personal or business, were under Federal Reserve Board Regulation D restrictions, but this legislation was removed in 2020 due to the covid-19 pandemic. Certain banks are opting to keep their withdrawal limits.
If you’re a sole proprietor or freelancer, a business savings account lets you segregate your business savings from your savings.
Why Have a Business Savings Account?
Owners of businesses need to have separate company savings accounts. This is why having a company savings account could be advantageous:
- Safe-keeping. Savings accounts for businesses give the security to keep money that is not intended to meet immediate requirements and is distinct from your regular banking account for your business.
- Business savings accounts let you profit from the surplus cash while keeping it easy to access.
- Saving money to run your business allows you to cushion unexpected costs.
How To Choose a Business Saving Account
Review the different banks and financial institutions to identify the most suitable account to meet your requirements. Take into consideration these aspects when you compare versions:
- Find the interest rate and compare the best APY to maximize your savings.
- Maintenance fees per month eat up the interest accrued on the balance of your account. Examine the fee schedule to determine additional fees the bank charges before making an account.
- Customer service. Select a bank with your requirements for customer service. If you’re looking for in-person customer support, choose a local institution with commercial banking. Consider features like telephone assistance, private messaging, or times for customer service in the decision.
- Features of digital banking. Numerous banks are now offering mobile applications and online access to accounts. Review app reviews and learn about the mobile and online banking capabilities available on the funds you’re looking at.
If you don’t require access to banking services in person, it is possible to receive higher interest rates via banks that operate online. They don’t have local branches and usually offer lower overheads than traditional banks. As a result, they can pass on the savings to their customers by cutting fees and raising rates.
High-Yield Business Savings Accounts: Pros and Cons
Though high-yield savings accounts for businesses have many advantages, they might not be the best choice for all companies.
- Competitive rates. Business savings accounts with high yields offer more APY than standard savings accounts.
- Lower fees. Banks online typically charge minimal or no service charges per month for high-yield savings accounts.
- Most of the funds in high-yield savings accounts can be accessed via electronic transfer and other means. Certain statements might even come with an ATM card to easily withdraw cash.
There is no local support. There isn’t a high-yielding business savings account in most banks, including brick-and-mortar branches. However, you could discover competitive rates at the credit union in your area.
- Requirements for balance. Banks may require you to satisfy specific minimum requirements for credit to avoid monthly fee charges or to earn interest.
- Chances missed. Savings accounts for business allow you to earn interest; however, it can mean you are missing opportunities to invest the money in your company.
How To Apply for a Business Savings Account
Find the top company savings account. Take into consideration the following factors:
- Rates of interest
- Balance and deposit requirements
- Features on your account
The process for opening a business account depends on the institution you choose to work with. Some banks permit small business owners to open savings accounts online. However, certain banks require a visit to the bank branch in person to make an application.
When you apply during the application process, your bank may ask you to supply relevant details about your personal and professional life for verification of the authenticity of your account. The parties required to open an account often depend on the kind of company. In the most, you’ll have to submit these documents to establish an account for your business:
An official photo ID issued by the government like a driver’s license or ID card issued by the state, passport
- The Social Security number
- Employer identity number (EIN) if it is you have one.
- The business name
- Address for business
- Address for email
After your application has been approved, you can start to fund your savings account for business by linking an existing bank account and transferring money to the report.
What Is Needed To Apply for a Business Savings Account?
It is necessary to provide details about your business while applying to open a business savings account. The details required will vary according to the structure of your company and financial institution; however, you need the following information:
- Full name
- Birth date
- Social Security number, also known as employer identification number (EIN)
- Contact details
- Physical address
- The legal name of the business
- Types of Business
- The date of business establishment with the signature of the full name
- Business license for businesses
- Ownership structure
- Employees number
- Gross revenue for the year
- Initial deposit
Certain banks might have you make an appointment with their local branch to establish an account for business. However, many banks will allow applicants to apply on the Internet.