You’ve got a handle on your business finances, for the most part. You’re bringing in a healthy revenue and paying your employees. But what if you have a little extra cash you’d like to set aside for a rainy day? Having that money earn interest is certainly appealing. But which business banking option offers the best business savings account?

Live Oak Bank, based in North Carolina, has one of the best business savings accounts with an APY of up to 0.60%, which is 12x the national average for savings accounts. This is an online savings account –. Axos: Best High-Yield Savings Account. The checking and savings offerings fall short of Capital One’s and Wells Fargo’s, and there are no credit cards. But if you’ve been in business for a few years, are looking for more substantial lending and don’t have a considerable sum of transactions each month, it’s worth a look.

When it comes time to find a place to stash your business’ cash, with the opportunity to watch your unused funds grow, not all deposit accounts, online savings accounts, banks, and credit unions are created the same. See what banks give you the best return for your long-term goals — and a safe place to keep that extra cash flow — in this list of top options.

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Types of Business Savings Accounts

A business savings account functions much the way a personal savings account does: you earn interest on the money you have in the account. There are, however, a few different types of deposit accounts to consider, whether you open one through a credit union or a traditional bank.

Standard Business Savings Account

There’s nothing you aren’t familiar with here. The APR you can earn on your money may be the same as what you’d earn with a personal account.

High-Yield Savings Account

As you’d guess, this account offers a higher interest rate, and it typically requires you to have a higher balance in the account.

Certificates of Deposit

Another deposit account is the CD. With a CD, you leave the money in the investment vehicle for a few months or years in exchange for earning a fixed amount of interest.

Choosing The Best Business Savings Account For Your Business

So now the time has come to determine what the best business savings account is for your needs. The easiest place to start is with the bank or credit union you already have a business checking account with, however, don’t limit your research to just that. You may find another bank that has a lower monthly fee or minimum deposit, or that offers features you prefer, like overdraft protection or mobile banking.

You’ll want to look at a few things when comparing savings accounts:

• Interest rates
• Monthly maintenance fees
• Ways, if any, to waive the fees
• Minimum daily balance requirements

Now let’s look at the best business savings accounts we recommend.

The Best Business Savings Account: Bluevine – 1%

The best business savings account is actually not a savings account! It’s a checking account, but its high interest rate makes it top our list.

You don’t see business savings account rates as high as 1% very often unless it’s a high yield savings account. But Bluevine is making a name for itself. Not only is the brand known for its business loans (they’re a partner of Nav’s) but now they also offer a business savings account with 1% interest up to $100,000 and no monthly fee.

And unlike a checking account, you can pay bills, write checks, and use your Bluevine debit card with this account. And if you’re interested, Bluevine also offers lines of credit and invoice factoring.

Runner-up: Capital One Spark Business – .4%

The Capital One Spark business offerings go well beyond its popular business credit card. Its Business Advantage Savings account is actually one of the more lucrative ways to earn. There is a $3 monthly fee for the savings account, but you can waive it by maintaining an average balance of at least $300.

You can earn .4% on balances up to $5 million and then .1-.04% above $5 million.

Deposits (including cash deposits) are made at any Capital One ATM, using your Spark Business Debit card and PIN or with your Capital One mobile app, where you can snap a photo of a check and direct deposit it electronically. Savings accounts can make no more than six withdrawals per month, as allowed by federal banking regulations.

Capital One frequently offers promotional APY rates from time to time, but these eventually revert to the normal rate. And you also have the ability to open a CD, with rates of .35-.4% for investments as low as $1,000 over 1-5 years.

While the account isn’t known for having the most competitive interest rates, if you’re already a Capital One Spark customer, it makes sense to add this to your banking portfolio.

Runner-up: Bank of America Business Savings – .01% (with possibility to earn more)

Bank of America’s Business Advantage Savings Account offers a respectable .01% APR…unless you’re a Preferred Rewards for Business member, and then the interest grows. Depending on the tier you’re in, your savings could earn .02-.05%.

The Preferred Rewards program provides a slew of benefits to qualified customers, including no banking fees, a 25% bonus reward on eligible business credit cards, a discount rate on business loans, and that bump up in APR for savings accounts.

The fee for the savings account is $15, but it’s waivable if you meet certain criteria.

Business Money Market Alternative

Another option to consider is a business money market account. It acts like a high-yield savings account in that you can earn interest on your money, but functions like a checking account in that you can pay for bills with a debit card or checks.

You may need to have a higher minimum balance for a money market account than a savings account, and the fees may be higher.

Business Savings Account Rates

As you can see from above, interest rates can vary from one bank to another (at credit unions, they’re called dividends). Generally, interest rates are a fixed rate that may fluctuate given market conditions.

Some banks will lower the interest rate if the minimum balance is high (think in the millions of dollars).

Opening A Business Savings Account

Once you decide which savings account is right for you, you’ll need to gather a few documents to open your account. Some online banking-centric institutions (like Bluevine) will let you open your account online, while others may want you to come into a branch. Also if you already have another account with a bank, you may be able to open it online.

To open your savings account, you’ll need:

• Business documents (DBA, articles of incorporation, articles of organization)
• Government-issued photo ID for you and any other employees who need access
• Employer identification number or social security number

You may be asked for other information about your business, including physical address, business structure, and revenue.

Frequently Asked Questions

Are you still unsure about the ins and outs of opening a business savings account? It can be confusing to understand the differences between types of accounts and what’s needed to set one up. Here are answers to some of the most common inquiries.

Which Bank Has the Best Business Account?

As we established above, the best business savings account is Bluevine’s account, with a 1% interest rate. We have determined the best business checking account to be Bank of America (who also ranked on our list here for savings). As with any banking service, your personal pick will come down to how you use your account, type of business, and whether you want an online-only or physical financial institution.

Who Pays the Highest Interest Rate on Savings?

Currently, Bluevine leads the pack with an impressive 1% interest offering. Of course, interest rates change. What may be the best bank now may not always take top place.

Can I Use My Personal Bank Account for my Small Business?

Many wonder whether they need to open a business account, but the truth is that establishing a banking history as a business is the only way to build your business credit and financial history – something that will be very important when it comes time to get business credit cards or business loans. A personal savings account – even an interest-bearing checking account — won’t help your business profile.

Do I Need a Tax ID to Open a Business Checking Account?

If you operate as a sole proprietor (individual business owner), it’s possible to do business without an EIN. It’s advised to get one as a security precaution, however, as it can stand in place of your social security number on tax and financial documents you may need to provide to customers and vendors.

For incorporated companies, a tax ID is needed. You’ll also want some common documentation, such as your business incorporation papers (if applicable) and proof of residency. If you already have a checking account or credit card with an existing bank, it’s possible you won’t need to present everything again, assuming none of your information has changed since you last opened an account.

Nav’s Verdict: Best Business Savings Accounts

The fact is: the best business savings account is the one that best suits your needs. You may want an account with a super low or nonexistent monthly fee, or you might care more about earning more interest. These three savings accounts are just options for you to consider as you do your own research.

Saving for a rainy day is a phrase we are accustomed to hearing when it comes to our own personal finances, but not one we would think about when it comes to business.

But business savings accounts help many companies and sole traders weather difficult financial times. It’s clear that there are benefits to having a business savings account, but which is the best company savings accounts to opt for?

Why might a business want a savings account?

There are many reasons why it makes sense for a business to have a pot of savings:

• Buffer income volatility – whether you are a limited company or a sole trader, every business is subject to ever-changing trading conditions. The most recent issue many businesses have faced is the coronavirus pandemic. Even with Government help, many businesses found trading conditions so difficult that they become insolvent. Whilst a savings pot may not stave off such large trading threats, it will and can go some way in helping a business survive difficult conditions. It also means that if sales are slow and income is affected, a business sales account can provide a welcome buffer.
• Buffer unexpected costs – overheads do not remain the same, and if they rise unexpectedly, a savings pot could help buffer these unexpected costs.
• Ring fence money for tax and VAT liabilities – ringfencing money to pay upcoming tax and VAT bills is easier with a savings account. By using accounting software, you can automatically calculate the size of both or either of these bills and put this money aside. It also means that as you save this money, you accrue interest, a welcome added bonus.

What are the different options for business savings accounts?

There are different business savings accounts that a startup can easily use to give their business a stable financial foundation.

Like all savings pots, there are different issues that you need to consider. By doing so, you’ll find the business savings vehicles that your business needs:

• Accessing your money – some business savings accounts are built for long term returns which means getting access to your money is not instant. Other saving pots do have instant access, but the pay off is a lower return.
• Interest rates – any money that your business puts aside needs to work hard, and that comes in the way of interest. Longer terms savings vehicles have a higher interest rate as do some business savings accounts that are deemed ‘riskier’. Other business savings accounts that have instant access will have a lower interest rate.

Understanding which is the best instant access, fixed interest rate or higher interest rates business savings account for your business is essential.

Current business saving accounts

The interest rates and products on offer can change without notice. Always check the current business savings rates and products on offer from each bank before you commit

A business savings account can really help a business to build a stable financial base. It allows surplus income to be saved and earn you interest at the same time. But like all business accounts, you need to make sure you choose the right product for your business, including how quickly you can access the money.

Business savings accounts FAQ

Can businesses have savings accounts?

Yes, in fact, from a financial planning point of view, a business savings account is a great way of ringfencing money as well as earning extra income too. There is a huge range of savings vehicles for business from high-interest business savings accounts to fixed-term products that can yield a high-interest rate, but limits access to your money.

Does a small business need a savings account?

A business that has a savings account affords itself extra protection against a range of financial issues such as managing dips in income, as well as putting aside sums of cash to meet tax and VAT liabilities. Company savings accounts also allow a business to put aside surplus cash and earn money through interest payments. It gives an extra sense of security that should there be a rainy day for the business to endure, that there is a pot of cash to draw on.
There is no doubt that a business savings account is part of prudent financial planning for any business, no matter their shape or size.

Best Business Savings Accounts Rates

How much should a small business keep in savings?

Best Business Savings Accounts Interest Rates

Savings operate in a similar way for businesses as they do for personal customers. The amount a business saves depends on a variety of factors:
• Leave a buffer in the current account – a business should maintain an operating buffer in their current account so that overheads and bills are met from month to month. This is especially important if you place savings into a fixed term, no access savings vehicle.
• Meet current debt obligations – it is important that a business not only keep a buffer in their current account but are able to easily meet their overheads and bill payments.
But, as a small business, you can put away the money that you need to meet tax or VAT liabilities.
If you use a piece of accounting software, such as Xero or QuickBooks, it can automatically calculate how much your tax and/or VAT liability will be. This means you can move this amount to a savings account. You’ll just need to make sure that you can access the money when you need to in order to pay your liability.
In other words, a business shouldn’t place itself into financial difficulties in order to save but can be used to save the amount you will need to pay in tax or VAT every quarter or annually.

Which business savings account offers the highest rate of interest?

Best Business Savings Accounts Rates

A high-interest business savings account will yield a higher return, and this can be maximised in a number of ways:
• The amount you save
• The length of time you save it for
• Whether it is an instant access or notice account
The best business deposit accounts are ones that are fixed term. But what this means is that the money you place into the savings account is locked away for a period of time. This could be for 6 months or as long as 5 years.
Banks change interest rates too, and so there may be times when interest rates significantly increase, just as there are times when interest rates can be low.