The Scenario
Tomas runs a home-inspection company with $48,000 sitting in his business checking account. It earns 0.01 percent - about $5 a year. His bookkeeper suggested moving the tax bucket and emergency fund into high-yield savings. In one month, Tomas learned his idle cash could earn more in a year than his checking account would in a century.
Business cash should not be lazy. Here is how to make it work without risking it.
Who This Guide Is For
This is for owners who keep meaningful balances in checking accounts earning nothing, and for anyone building the tax and emergency buckets from our earlier guide. If your cash balance rarely exceeds a few hundred dollars, the savings account matters less than the habit of separating money.
What to Look For
- A competitive rate. Compare the APY, but remember rates move - the account structure matters more than this month’s number.
- No monthly fees and no minimums. Fee-free access is the baseline; a minimum balance on a savings account is a red flag.
- Fast transfers. You want to move money to your checking account in a day or two when the tax bill or an emergency arrives.
- Separate accounts or buckets. Labeled sub-accounts make the sinking fund system easy to run.
- FDIC insurance. Confirm the account is covered by a real bank.
The Options
Marcus by Goldman Sachs
Marcus offers a no-fee, no-minimum high-yield savings account with a consistently competitive rate and a clean interface. It is the simplest option on this list: open it, connect your checking account, and automate transfers. Goldman Sachs backing adds a layer of institutional comfort.
Best for: owners who want a no-nonsense, fee-free savings account for the tax bucket and emergency fund.
Ally Bank
Ally combines high-yield savings with interest-bearing checking, sub-account organization, and 24/7 human support. If you want savings and checking under one roof with easy bucket management, Ally is the strongest all-rounder.
Best for: owners who want one online bank for daily banking plus savings, with labeled buckets for different funds.
Betterment Cash Reserve
Betterment offers a cash reserve with a competitive rate inside the same app as automated investing. If you are already using Betterment for retirement investing, keeping cash in the same place makes the transition from savings to investing frictionless.
Best for: owners who want saving and investing in one dashboard, especially if they already use a robo-advisor.
The Setup That Works
- Decide which balances belong in savings: the emergency buffer, the tax bucket, and known upcoming expenses.
- Open the account and connect it to your business checking.
- Automate a monthly transfer, or route a percentage of each payment into savings first - the same principle as our pay yourself guide.
- Review the rate quarterly. If your bank’s rate drifts well below the market, move to a better one - switching savings accounts is easy.
- Keep investing money out of the savings account. When the buffer is full, direct surplus to retirement and taxable investing, as covered in our profit investing guide.
What Not to Overpay For
- Chasing a rate with strings attached. A high teaser rate with a minimum balance or deposit requirement is not a better account.
- A savings account with monthly fees. There are excellent fee-free options; do not pay to earn interest.
- Investing the emergency fund for a slightly higher return. The buffer is insurance; the market is for money with a longer horizon.
- Leaving the tax bucket in checking. The tax bucket has a date attached - it should be in savings, earning while it waits.
What to Buy
Open Marcus for the simplest fee-free high-yield savings, or Ally if you want savings, checking, and sub-accounts in one online bank. If you use Betterment for investing, its cash reserve keeps everything in one place. Whichever you pick, move the tax bucket and emergency fund first - that is the highest-value transfer you can make this month, and it takes about ten minutes.