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Business checking accounts offer numerous advantages over personal checking accounts, but many business owners wonder if they can also earn interest.
While credit unions and banks commonly offer interest-bearing personal checking accounts, the availability of interest-earning business checking accounts can vary.
Let's explore whether this feature is available to businesses and what factors may influence it.
Start your application with MIDFLORIDA Credit Union.
Starting basic: What is a business checking account?
A business checking account is a secure and accessible place to manage your company's finances.
Your funds are readily available for immediate use as revenue flows in and expenses are paid out.
You can use it similarly to a personal checking account—withdraw cash, use a debit card, initiate ACH or wire transfers, or write checks to access your company’s money.
Who should have a business checking account?
Simply put, you should have a business checking account if you're a business owner.
This ensures that personal and business expenses are separate, making record-keeping and tax preparation much easier.
Business owners include:
- Corporations
- LLCs
- Partnerships
- Associations
- Freelancers
- Sole proprietors
Do interest-earning business checking accounts exist?
Absolutely. Many financial institutions now offer business checking accounts that earn interest.
Just like a personal checking account that earns interest, businesses can use their business checking account to earn a little extra income.
What kind of interest rates do business checking accounts offer?
Many interest-bearing business checking accounts have lower interest rates. Typically, they’re between 0.01% and 0.05%.
However, interest-earning business checking accounts with significantly higher rates do exist.
MIDFLORIDA Credit Union’s Business Checking Plus Interest account is a good example.
This account gives account holders an interest rate of 4.00% APY on the first $10,000 in the account.
Why open an interest-bearing business checking account?
Interest-bearing business checking accounts have several benefits for companies of any size.
Make your money work for you
The main benefit of an interest-bearing business checking account is that it gives your business an additional source of income.
You won’t earn as much as you will from your main income streams. However, you get more than you would from regular business checking accounts. This is a great way to put money sitting idly in your account to work.
No barriers to access
An interest-bearing business checking account also gives you immediate access to your money.
Other interest-bearing accounts can have restrictions on when you can use your money. This can mean you might not be able to use your business funds to cover an unexpected expense.
If you have an interest-bearing business checking account, you can use your money whenever you need it without sacrificing the interest.
Fewer minimum deposits
Finally, an interest-bearing business checking account is an excellent way for a new business to get earn interest.
While business savings accounts like the MIDFLORIDA Business Savings account reliably generate interest, you also need an additional $100 to open it.
This can be a big help to small businesses that still have to keep an eye on their expenses.
Considerations for opening an interest-bearing business checking account
Consider the following factors if you’d like to open an interest-bearing business checking account.
Fees
Fees can eat up any money you’ve made from interest.
Try to avoid any bank or credit union with high business account fees, especially minimum balance fees and monthly fees.
If an account does have a monthly fee, see if they offer a way to waive them.
Other fees you should look out for include:
- Overdraft fees
- Wire fees
- Stop payment fees
- Insufficient funds fees
Transaction limits
Many business checking accounts limit the number of monthly transactions you can make.
If you exceed that number, you’ll usually have to pay a small fee per transaction.
You’ll want to choose an account that can accommodate the monthly transactions you make.
Minimum balance requirement
Many business checking accounts have a minimum amount you need to keep in your account each month. You may have to pay a fee if your account dips below that amount.
Make sure your business has enough cash to meet that minimum balance. Look for a business checking account without a minimum balance requirement if possible.
Cash deposit limit
Some business checking accounts limit how much cash you can deposit into your account each month.
Like the payment transaction limits, if you exceed that amount, you might incur a small fee for each additional deposit.
Ensure you get an account accommodating your company’s monthly deposits.
Features
What features does your business checking account offer?
Helpful account features include:
- Electronic bill pay
- Internal and external transfers
- Mobile check deposit
- Mobile app
- Online payments
MIDFLORIDA offers its members many beneficial checking account features, including an easy-to-use mobile app, debit card rewards, and more.
Minimum opening deposit
Choose an account with an affordable minimum opening deposit. MIDFLORIDA, for example, only requires $500 to open an interest-earning business checking account.
Open an interest-bearing business checking account at MIDFLORIDA
An interest-bearing business checking account is a must for any business owner.
Businesses get an additional income stream and can access their money as needed in the case of an unexpected expense.
Want to see what an interest-bearing business checking account can do for you?
Talk to a MIDFLORIDA representative today.
They’ll help you through the application process and make sure you have all the necessary documentation.
If you’re a new MIDFLORIDA member, open a Free Checking account, and you’ll get a $200 bonus if you meet the terms and conditions.
