If you’ve ever had a personal savings account, you already know the basics of a business savings account. They earn more interest on your funds than checking accounts do (except some interest-bearing checking accounts will earn more than basic savings accounts). The catch? Savings accounts can really limit your access to your funds.
In part, that’s because there used to be a federal regulation that limited savings accounts to six transactions (including withdrawals) per month. That regulation no longer applies, but many banks have kept the rule anyway. So depending on your bank, you may find yourself very limited in the number of transactions you can make from your savings account.
Also, you can’t write checks from your savings account. So not only do you have to think about how often you can access your savings account, you also need to think about how you’ll access it. In other words, if you plan to constantly pay for expenses from your business bank account, you should probably stick to a checking account.
You should also know that savings accounts tend to cost a bit more than checking accounts. You won’t really find free business savings accounts, and the fees (including your monthly fee and transaction fees) and minimum opening deposits skew higher than their checking counterparts.
Still, if you want a place to store your money and let it grow, you want a business savings account.