There’s a piece of the small business owner’s toolkit that many companies are missing: a high-interest business checking account, which can help entrepreneurs earn money on their account balances. Even though picking a bank account may seem inconsequential, this choice could actually save you precious cash.
Here’s why you should look at a high-interest checking account as more than just your standard bank account, and where you can find one.
Interest-bearing business checking accounts are diamonds in the rough.
A strong business bank account can be as valuable to a small business owner as a precious gem due to their rarity and value. Not only can having a great banking partner help save you money on account fees, but you can actually make money with a high-interest checking account that bears returns on your account balance.
Entrepreneurs who want to make their money work for them can benefit from high-interest business checking accounts. Even so, there aren’t a ton out there, and many require you to keep tens of thousands of dollars in cash within them to meet minimum balances—think $5,000, $10,000, or even more. Most small business owners don’t have that kind of liquidity, especially as they’re constantly reinvesting in their companies.
There aren’t many, but you can find high-interest checking accounts.
Many financial institutions offer some kind of interest-bearing business checking, but the APY (annual percentage yield) often isn’t nationally competitive. When searching for your next business checking account ensure that the APY is greater than the national average for business checking accounts, which is .179%1. You’ll also want to make certain that the high rate offered isn’t just an introductory rate and will remain constant year after year.
The best places to track down high-interest checking accounts are:
- Traditional banks: Some traditional brick-and-mortar banks, including the big players, offer high-business checking accounts with varying rates. These sometimes require high minimum daily balances, so be sure you can meet them.
- Credit unions: Local credit unions may also offer high-interest business checking accounts. These accounts aren’t always open to all, however; be aware that membership to credit unions is sometimes limited to location, occupation, or other factors.
- Online banks: The rise of online banks has been a boon for entrepreneurs looking for high-interest checking accounts. Although these banks don’t have branches, their interest checking offerings are often more competitive than traditional banks, and open to a wider range of business owners.
As you do your research, you’ll likely find that high-interest bank accounts often take the form of business savings accounts, which usually have limitations that make them unsuitable as an everyday checking account. For instance, savings accounts are often limited to a certain number of transactions per month, whether that’s withdrawals, transfers, checks, or something else—otherwise, you’ll generally be assessed fees.
BlueVine knows that it can be challenging the find the right business checking account—which is why we launched a new high-interest business checking account that bears major returns. We built it specifically to serve the needs of small businesses because we believe that your bank shouldn’t charge you to do business. It could be the “love interest” you’ve been searching for.