Do I Need a Savings Account for My Business?

When you’re evaluating your business banking, you need to know the difference between a commercial savings account and a business checking account.
 

Managing your own business finances can seem overwhelming at times, especially when you have your own personal finances to manage too. 

While it may seem easier to manage the number of business bank accounts you have, treating your business finances like your personal ones is also important. Look at where you can make the most of your money and what will benefit you the best—in many cases, that can be opening a business savings account.

Benefits of a Business Checking Account

If you’re still at the stage of starting your business, the first account you should open is a business checking account. This helps keep your personal and business finances separate from the start, which is essential for managing your money effectively and keeping your business separate for tax purposes.

You may already have a commercial bank account set up, but you might not be aware of all the benefits these accounts come with. For example, FNBT’s one Business and VIP Business Checking accounts offer BaZing Biz benefits, which go beyond just providing a secure place to keep your business money.

You could also earn interest on your checking account while accessing cash management systems that simplify paying your bills through digital banking. You can also deposit checks from anywhere with remote deposit capture and use your debit card to make business purchases directly from your account.

Differences Between a Business Checking Account and a Business Savings Account

When evaluating your business banking, you need to know the difference between a commercial savings account and your business checking account. Your checking account is where you should keep money you need quick access to, like funds you need to pay vendors or other business expenses. This is also likely the transactional account that your business funds are being deposited into when you make a sale or have an invoice paid.

Your business savings account is the place to grow your business funds and earn more interest. Like with a personal account, you can integrate your business accounts for seamless transfers from one account to the other. You can also set up automated savings to steadily grow your business savings over time.

Major Benefits of a Business Savings Account

Just like your personal savings account, there are many benefits that come with a business savings account. One of the biggest reasons to save some of your business income is to have funds available for possible emergencies. If business is slow and you need a cash flow injection without a loan, you can rely on your savings from your busy season to support you.

Savings also help your business grow, especially if you can earn interest on your money. As your industry adapts and evolves, you may need to pivot and change, so having a healthy savings account can mean having funds to support new initiatives, buying new inventory or equipment, or even expanding operations to additional locations.

Types of Business Savings Accounts

There are many options out there when it comes to saving for your business. When you work with First National Bank and Trust, we’re here to help you find the best business bank account for you.

Our business savings account is a flexible way to reach your business savings goals. This account type offers unlimited deposits and six free withdrawals a month. You only need a $50 minimum opening balance for this type of account, so you can start saving for the future of your business right away.

Consider a Business Relationship Money Market account to help you grow your savings even more. With a tiered interest structure, these accounts are one of the best ways to maximize interest on your savings.

You can access your money 24/7 through online and mobile banking, along with a business debit card. You’ll need a $10,000 opening balance for this savings account, but you can see returns with higher interest than a traditional savings account.

Advanced Business Bank Accounts

Suppose you’re a seasoned business owner with both a business checking and savings account. In that case, you may want to consider more advanced bank accounts to help you save even more time managing your business finances.

When you sign up for cash management services with FNBT, you can open a Zero Balance account to streamline your payroll and accounts receivable processes. You’ll save time by no longer having to transfer money manually, and you can optimize your cash flow to invest in other financial goals for your business.

You can also open a sweep account where you’re able to retain a cash balance for immediate expenses, with any additional cash being transferred automatically into an interest-bearing savings or investment account. 

Businesses with larger balances and valuable assets may benefit from an insured cash sweep account. These are special accounts that are similar to investment sweep accounts but have additional FDIC insurance coverage above the standard $250,000 limit. If you plan to make higher deposits, this type of savings account may be the most beneficial for you.

What to Consider When Opening a Business Savings Account

Several important factors should be considered before deciding which type of business savings you need to implement. If you need easy transfers between your checking and savings accounts, consider having both accounts at the same bank. This is especially the case if you can make transfers online.

You also need to make sure that any account you choose is FDIC insured. Like personal bank accounts, you may only be insured up to the $250,000 limit, so an Insured Cash Sweep account can be helpful if you need to keep larger sums in savings.

Look for any monthly fees you may have to pay on your accounts. Some banks may waive fees if certain requirements are met.

Check that you can meet the minimum balance requirements, whether that’s an opening balance or a monthly required balance to waive fees. If not, you may want to focus on building up your checking account. Also, look to see if the account earns interest or if additional value-added benefits are included with the account. 

Assess the suite of business products that your bank offers, like digital banking, cash management, or merchant services. They may also have fraud management solutions like positive pay that can help you protect your business funds.

Finally, consider whether the bank is a good fit for you and your business goals. If you’re looking to switch banks, consider the accessibility of branch locations, the customer service you receive there, and the bank’s reputation. At FNBT, we’re always here to support our business customers and are proud to give back to our local community while helping small businesses thrive. 

Open a Business Savings Account Today

Working with a local community bank for your business savings needs means that your banker will get to know you and take time to understand your business which allows them to tailor services to meet your specific goals. 

FNBT is here to help you find the right savings account for your business. Contact us to learn more about our offerings and to get started with opening a new business account. Visit one of our convenient locations in Beloit, Argyle, Clinton, Darien, Delavan, Elkhorn, Janesville, Monroe, Walworth, or Williams Bay Wisconsin, or Rockton, Roscoe or Winnebago Illinois.