Checking keeps the gears turning—payroll, bills, daily spend. Savings keeps reserves safe and earning, especially now that high-yield rates are back on the table in 2025. The businesses that thrive are the ones that know how to use both in tandem. To see why, let’s compare checking and savings side by side.
Relay is a financial technology company and is not a bank. Banking services provided by Thread Bank, Member FDIC.
Business checking vs savings at a glance
For small businesses, both checking and savings play essential roles—it’s just that each account is built for a different job. Here’s how they compare at a glance:
Checking | Savings | |
Purpose | Handle daily inflows/outflows (payroll, bills, debit card spend) | Store surplus cash for protection and growth |
Typical APY | ~0.07% national average for interest checking | ~3.0%–4.4% at many online business savings; select tiers higher |
Ideal Use Cases | Paying vendors, running payroll, managing expenses | Building reserves, tax segregation, growth funds |
Liquidity | Immediate access, generally no restrictions | Withdrawals may be limited by bank policy |
Transaction Limits | Unlimited transactions | Some banks impose withdrawal limits to preserve “reserve” functionality |
What’s the difference between business checking and savings?
A business checking account is designed for transactions—deposits, bill payments, payroll, debit card spend. A business savings account is built to hold surplus cash, earn interest, and stay insulated from day-to-day spending. Many online business savings pay in the ~3%–4%+ range today (with some tiered balances higher), while interest checking averages around 0.07% nationally.
On withdrawal limits: the federal six-per-month cap was removed in 2020, but banks may still choose to impose limits by policy—so check the rules before you transfer.
Which is better for managing daily expenses: checking or savings?
Checking wins for daily operations, hands down. Three reasons:
Unlimited (or effectively unlimited) transactions
Direct debit card access for purchases
Seamless sync with payables and payroll systems
Savings accounts, by design, don’t allow card spend or outgoing bill payments in many setups—Relay savings can’t be used on cards and can’t send external payments. That separation is a feature, not a bug: it builds healthy discipline between what’s meant to be spent and what’s meant to be saved.
When does it make sense to have both checking and savings?
Pairing the two is the sweet spot. Common scenarios:
Profit allocations first — carve out profit before expenses so it’s protected.
Tax reserves — earmark funds for quarterly payments.
Growth investments — build cash for expansion opportunities.
With Relay, you can open up to 20 checking accounts plus 2 high-yield savings accounts, so you can implement this structure without juggling multiple banks.
Why a high-yield business savings account matters
Idle cash should earn, not sit.
Earn interest on idle cash
APY (annual percentage yield) shows how much you’ll earn in interest, including compounding. Standard business savings often sit between ~0.01% and 1.00%, while high-yield business options commonly range ~3.0%–4.4% (with higher tiers at some banks). Relay savings offer up to 2.86% APY2 on the Scale plan.
A quick example:
Balance | 0.10% APY | 2.86% APY |
$100,000 | $100 | $3,030 |
Safeguard funds with FDIC insurance (and ways to extend coverage)
FDIC insurance protects deposits up to $250,000 per depositor, per bank, per ownership category. Some banks participate in sweep networks (like ICS/IntraFi) to spread deposits across multiple institutions and increase insured coverage—often into the millions. Relay provides up to $3 million in FDIC insurance3 via the sweep program of its partner bank, Thread Bank, Member FDIC.
Best practices to maximize protection:
Diversify across accounts when cash is high
Use sweep networks where appropriate
Segment cash for taxes, payroll, and operating reserves
Automate allocations with modern banking tools
Modern platforms let you automate transfers, schedule sweeps, and integrate directly with your accounting stack. Automation materially reduces manual errors and makes “envelope” budgets stick.
Relay supports direct bank feeds to QuickBooks Online and Xero (with dependable syncs throughout the day) and integrates with payroll tools like Gusto. Relay also offers Profit First automation, so income is routed into the right buckets automatically.
How to choose the best business savings account
Evaluate rates, fees, and usability in equal measure.
Interest rates, tiers and compounding
Many banks use tiered APYs. For example, some institutions list higher APYs for very large balances (e.g., a top tier at 4.42%). Look for daily compounding and monthly payouts, and keep an eye on rate changes over time.
Fees, minimum balances and transaction limits
Common fees include:
Monthly maintenance
Excess-withdrawal penalties (bank policy)
Incoming/outgoing wire charges
Beware minimum balance traps. Some online banks offer high-yield business savings with no monthly maintenance fee and no minimum opening deposit. Relay also has no account minimum balances and no hidden fees. Plan fees apply for certain advanced features.
Access, integrations and customer support
Savings shouldn’t be siloed. Prioritize mobile/desktop parity, fast internal transfers, and responsive support. Verify your accounting integrations—direct feeds and stable syncs cut month-end work and reduce errors. Relay’s bank feeds connect directly to QuickBooks Online and Xero on a reliable cadence.
The best business savings accounts right now
Criteria: APY, fees, coverage, technology, service. Rates and terms change—always verify current details.
Relay high-yield savings (up to 2.86% APY)
Up to 2.68% APY (Scale); 0.91% (Starter), 1.55% (Grow)
Two high-yield savings accounts included per business
Automated transfers and Profit First-style allocations
FDIC insurance up to $3M via sweep program
Leading online-only banks
Bank | APY | Fees / Minimums | FDIC / ICS Coverage | Standout Feature |
Axos (Business Premium Savings) | ~3.80% APY | No monthly maintenance; no minimum opening deposit | FDIC $250k; ICS available for expanded coverage | High APY + expanded coverage option |
Live Oak (Business Savings) | ~3.25% APY | No monthly maintenance; flexible opening minimums | ICS up to multi-million coverage | Strong ICS program, digital experience |
First Internet Bank (Business Savings) | 3.46% APY ≤ $5M; 4.42% APY > $5M | No monthly fee | FDIC $250k | Tiered yields with a top bracket above 4% |
Pros: Competitive APYs and digital-first onboarding. Cons: Some lack multi-account “buckets” or integrated spend tools you may want alongside savings.
Credit unions and community banks
Local institutions often post lower APYs than the top online banks, but they offer personalized service and local lending relationships. A common setup for growing SMBs: keep a Relay operating account for modern automation and reserves, while maintaining a relationship with a local CU for loans.
Frequently asked questions
Should I choose a business checking or savings account?
Open both—checking manages daily inflows and outflows, while savings protects surplus cash and earns higher interest.
Do business savings accounts earn interest?
Yes. Most pay interest, and high-yield online business options can exceed 3%–4% APY—well above typical interest checking averages.
How many business savings accounts can I open?
Policies vary. Relay lets you open up to two high-yield savings accounts alongside up to 20 checking accounts to keep cash organized.
Is interest earned on business savings taxable?
Yes. Interest is taxable income and should be reported on your business tax return, usually shown on Form 1099-INT.
How can I get FDIC coverage beyond $250k?
Use banks that participate in sweep networks like ICS/IntraFi or platforms (like Relay) that extend coverage via program banks—Relay offers up to $3M in protection through the sweep program of its partner bank, Thread Bank, Member FDIC .
Wrapping up
Choosing a business savings account in 2025 isn’t just about where to park spare cash—it’s about giving your business more clarity, more resilience, and more return on every dollar. Checking keeps operations smooth; savings keeps reserves safe and growing.
Relay ties both together, offering small businesses an all-in-one platform with high-yield savings (up to 2.86% APY), FDIC coverage up to $3M, and automation that keeps you focused on growth, not busywork.
1 Relay is a financial technology company and is not a bank. Banking services provided by Thread Bank, Member FDIC.
2 For Relay Subscription Plans with an interest-bearing deposit account, the interest rate and Annual Percentage Yield on your account are accurate as of 10/30/2025 and are variable and subject to change based on the target range of the Federal Funds rate. Fees may reduce earnings:
When you are subscribed to the Starter Plan, the interest rate on your savings accounts is 0.91% with an APY of 0.91%.
When you are subscribed to the Grow Plan, the interest rate on your savings accounts is 1.53% with an APY of 1.55%.
When you are subscribed to the Scale Plan, the interest rate on your savings accounts is 2.65% with an APY of 2.68%.
3 Your deposits qualify for up to $3,000,000 in FDIC insurance coverage when placed at program banks in the Thread Bank deposit sweep program. Your deposits at each program bank become eligible for FDIC insurance up to $250,000, inclusive of any other deposits you may already hold at the bank in the same ownership capacity. You can access the terms and conditions of the sweep program at https://thread.bank/sweep-disclosure/ and a list of program banks at https://thread.bank/program-banks/. Please contact customerservice@thread.bank with questions on the sweep program. Pass-through insurance coverage is subject to conditions.
