The government announced on March 12, 2023, that it was shutting down Signature Bank, a 24-year old digital bank that catered to law firms and real estate companies and more recently became a major player in cryptocurrency lending. This news came just days after the closing of fellow digital bank Silicon Valley Bank.
Signature Bank customers will be able to access their insured deposits through the FDIC, though the days ahead for this bank remain unclear.
If you need to open a top-notch business bank account that caters to growing businesses, look to these top alternatives offering free transactions, low fees and useful tools that can help you to keep track of expenses, stay on top of payroll and simplify tax obligations as you scale your business.
What Signature Bank’s shutdown means for customers
The FDIC issued a press release on March 12, 2023, announcing that it had immediately transferred all insured deposits to the newly created Signature Bridge Bank, N.A. The FDIC said that banking activities, including online access, would resume by Monday, March 13, 2023.
In addition to the FDIC stating that depositors’ assets will be made whole, it has assured the public that “no one lost any money on deposit as a result of the closure of this bank. The White House further issued a statement on March 13, 2023, saying that “no losses will be borne by the taxpayers.”
For depositers whose assets total more than the $250,000 covered by the FDIC’s standard insurance, the FDIC has announced it will pay “an advance dividend within the next week” with possible “future dividend payments” as the government sells off Signature’s assets.
See the FDIC’s frequently asked questions to learn more about how the Signature Bank failure might affect you. Or call the FDIC at 866-744-5463 for more information.
12 Signature Bank alternatives for small businesses
If your business was affected by the government’s seizure of Signature Bank, you’re likely focused on protecting your assets. When you’re ready to transfer your money to another bank, look for low fees, competitive interest rates and features designed to protect your business and simplify how you manage your money:
Interest rates. Increase your profitability and give inflation a run for its money with a bank that offers competitive interest rates on savings, checking and CDs.
Account minimums. Make sure minimum balance or opening deposit requirements are low and align with your cash flow.
Online banking. Most banks that cater to startups offer robust digital banking services that include online account management, bill pay and mobile banking on the go.
ATM access. Weigh ATM availability for your business to access fee-free or low-cost cash withdrawals.
Merchant services. If your business accepts credit card payments, consider a bank that offers payment processing with fees that fit your transaction volume.
Software integrations.Most business bank accounts offer integrations for accounting, payroll and taxes. For example, Bluevine syncs with popular business tools like QuickBooks, Stripe and PayPal.
Access to credit. A relationship with a business designed to grow with you will offer low-cost business loans or lines of credit at competitive rates and terms.
Fraud protection. Fraud protection and account monitoring helps you spot suspicious account activity, so that you can report it to your bank before you’re held liable.
Customer support. The best banks for startups and small businesses offer access to a dedicated business banking representative, live chat and quality customer service as you scale.
FDIC insurance. Confirm that any digital or online bank is backed by the FDIC, which protects balances of up to $250,000.
Are online or digital business banks safe?
Yes. Online and digital banks are insured by the FDIC for up to $250,000, in the same way that brick-and-mortar banks are insured. This protects up to $250,000 of your funds in the unlikely event of a bank failure.
Online banks are built on traditional banking infrastructure, so they look and feel a lot like traditional accounts, helping the best online and digital banks to offer fewer fees and higher interest rates than your corner bank branch.
Digital banks are built on brand-new infrastructure and often have more tech-forward features, like early direct deposits and the ability to budget and save for specific goals directly in the mobile app.
Steven Dashiell is a personal finance writer, specializing in credit cards, banking and growing and protecting your income. His insights and expertise has been featured on Nasdaq, U.S. News & World Report, Time, CBS, ABC, Fox Business, Lifehacker and Martha Stewart Living, among other top media. Steve holds a BA in English from University of Maryland, Baltimore County, minoring in composition and rhetoric. In his spare time Steve nerds out on birds, paints and plays a whole lot of Street Fighter.
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