Business savings accounts let you put your spare business cash to work. With a high-interest business savings account you can set money aside for future growth, hedge against inflation and prepare yourself for unexpected expenses.
In this guide, we’ll show you how to compare accounts to find the best business savings account in Canada for your business.
What are business savings accounts?
Business savings accounts are bank accounts that pay interest on the money you deposit. They work in the same way as regular high-interest savings accounts, but they’re for business rather than personal use.
Business savings accounts typically have low or no fees and offer competitive interest rates. However, the rate you get might depend on the size of your account balance. Many accounts have minimum balance requirements you must meet to earn interest, and they may also pay a higher rate of interest on larger account balances.
Business savings accounts should not be confused with business chequing accounts, which are used to manage your day-to-day transactions.
There are lots of simple reasons why a savings account could be a good choice for your business:
Put your money to work. Rather than leaving unused business funds sitting dormant in a chequing account, putting them in a savings account will help your bank balance grow — and you won’t have to lift a finger.
Grow your business. The money you save can be reinvested into your business or set aside to take advantage of business opportunities as they arise.
Create a financial safety net. A high-interest business savings account allows you to put money aside for a rainy day. If your business faces an unexpected setback or expense in the future, your savings offer a financial safety net to fall back on.
Improve your credit. A business savings account becomes a part of your assets and shows your financial discipline. This will make it easier to access business loans and credit cards in the future.
Access your funds whenever you need. The money you deposit into a business savings account isn’t locked away for a fixed term. So when you need to access the spare cash in your account, you can.
How to choose the best business savings account in Canada
The best business savings account in Canada is one that suits your savings goals and transaction needs. Consider the following factors in mind when comparing business investment accounts:
Interest rates. Compare business savings account rates to find the highest interest rate. However, remember that you may need to keep your balance above a certain level to access the highest advertised rate.
Fees. The best business savings accounts in Canada have no monthly fees. Check the fine print to find out if there are any other fees to watch out for, such as withdrawal fees or excess charges if you exceed your transaction limit.
Accessibility. How can you access the funds in your business savings account? Can you enjoy instant access by user-friendly online and mobile banking platforms? If you ever need to bank in person, does the bank offer a large branch and ATM network?
Transaction limits. Check whether there are any limits on the number of transactions you can perform each month and how much you’ll pay in fees if you exceed the limit.
Minimum and maximum balance requirements. Check whether you will need to make a minimum deposit to open an account, or whether you will need to meet an ongoing minimum balance requirement to earn interest. There may also be a maximum balance limit, so read the fine print.
CDIC coverage. Make sure the financial institution offering the account is a CDIC member. The Canada Deposit Insurance Corporation (CDIC) insures deposits for up to $100,000 at every eligible bank you have an account with, so you can rest assured your money is safe.
Other perks. The best business savings accounts in Canada will sometimes also offer extra benefits, such as discounts on business credit card annual fees or bonus introductory interest rates.
What to watch out for when selecting a business savings account
There are also a few drawbacks to watch out for when choosing a high-interest business savings account:
Fees. Check whether there are any fees that apply when you make a deposit or withdrawal. If your account has a monthly transaction limit, check how much you’ll be charged for each transaction above this limit.
Transaction limits. If you want the flexibility of being able to access your funds whenever you want, look for an account that doesn’t have any transaction limits.
Minimum balance requirements. Some banks require you to make a minimum deposit in order to open an account.
Tiered interest rates. Many business savings accounts in Canada come with tiered interest rates, so you may not be able to access the maximum advertised rate unless you make a large deposit.
Introductory rates. If a business savings account offers a bonus introductory interest rate, be sure to check what rate it will revert to once the promo period ends.
Earn interest on your cash balance in both CAD and USD
No lockups on funds
Access other business products
$0
Float Yield Account
Grow your money to reach your business goals
Earn more interest on higher account balances
Access funds anytime
$0
CIBC Business Investment Growth Account
Earn competitive, tiered, daily interest
Easy record-keeping with a monthly statement
Pre-authorized transfer service
$0
TD Business Savings Account
No monthly account maintenance fee
Earn higher interest for higher balances
Unlimited free Canadian Dollar self-service transfers
$0
Scotiabank Right Size Savings for Business
Earn 2.35% – 2.95% interest on your savings
No other banking fees
$0
Tangerine Business Savings Account
How to boost your business savings account balance
Keep these tips in mind to help grow your business savings as quickly as possible:
Set a goal. Why are you opening a business savings account? Do you have a specific purchase or expense in mind, or do you just want an emergency fund you can call on to cover unexpected expenses? Once you have a savings goal in mind, you can put together a plan to work towards it.
Make regular deposits. Automate your savings by setting up a regular transfer from your chequing account to your savings account. Your business savings will grow without you even realizing it.
Don’t dip into your savings. Stay disciplined and don’t dip into your savings unless absolutely necessary.
Shop around for a better rate. It also pays to review your account regularly and see whether you can access any better business savings account rates elsewhere.
How am I taxed on my business savings account?
Interest earned in a business savings account is considered taxable income. In most cases, if the account earns more than $50 in interest earnings, your company will receive a T5 tax slip from your financial institution. File this T5 slip along with your annual taxes.
International business bank accounts
If you do any business outside of Canada, you may want to consider opening an international bank account — a Canadian business bank account that offers international transactions. These accounts allow you to send, receive and hold funds in multiple currencies.
For a business, this allows you to get paid by customers in the local currency, pay local suppliers and avoid currency conversion costs. You can also avoid monthly fees and access multi-currency credit cards to help you manage your business spending.
For example, Loop lets you hold funds in CAD, USD, GBP and EUR, convert currency instantly and send transfers in 37 currencies. Vault is another international business bank account option worth considering, allowing you to hold CAD, USD, GBP and EUR, send transfers in over 30 currencies and earn cash back on your business credit card purchases.
Compare all international bank accounts for businesses to find the right account to help you manage your global payments.
Do large money transfers take longer?
Not necessarily. Most banks can support money transfers between $2,000 and up to $200,000 without additional delays. However, there are other factors that can contribute to delays and costs of large money transfers or international money transfers. For instance, your financial institution may impose a maximum amount that can be sent in one transfer.
One reason for delaying large transfers is to make sure the transaction is not fraudulent. Though most transactions are in the clear, those that aren’t amount to billions of dollars in lost funds every year.
According to Competition Bureau Canada, Canadians lost nearly $100 million to scams. To reduce fraudulent transactions and comply with FINTRAC regulations, banks and financial institutions will hold funds transferred to confirm details are accurate.
Wise: Send large money transfers
Send up to $1.5 million if you pay by online bill payment or wire transfer
4 most important business savings account features
The recent Finder: Consumer Sentiment Tracker Q3 2023 (CSTQ3) asked more than 1,000 Canadians about their priorities when selecting a new bank account (multiple responses allowed). While respondents were asked to focus on decisions around personal accounts, it gives a good indication of key features to consider when comparing business savings accounts.
According to CSTQ3 data:
87% of respondents want a bank account with no transaction fees
85% want no or low account fees
84% want free or unlimited e-transfers
79% of respondents want access to their bank account through a mobile banking app
How to open a business savings account in Canada
The exact process to open a high-interest business savings account varies between banks. Some let you apply online, but others will require you to make an in-branch appointment to open an account.
If you can apply online, you will need to complete the following steps:
Compare accounts to find the best business savings account in Canada for your needs
Navigate to the account page on the bank’s website and click the “Apply now” link
Provide your business information, such as your business name, contact details, the industry you operate in and your annual revenue
Provide your personal information (and the details of anyone else who will be allowed to access the account
Upload any required documentation. This may include your business registration and proof of ID
Submit your application
Bottom line
Choosing a business savings account is about more than just finding the highest interest rate (though that is important). The best business savings accounts in Canada also have no fees, offer generous transaction limits and provide easy access to your money. Compare your options today to find the best high-interest business savings account to help your business grow.
The results of the Finder: Consumer Sentiment Tracker Q3 (CSTQ3) were collected through an online Pollfish survey conducted between August 10 to 21, 2023. In the survey, 1,013 Canadians from across the country were asked questions regarding money plans and goals. The estimated margin of error for the survey is +/- 3%, 90% of the time.
Business savings accounts FAQs
Yes. Many Canadian banks and financial institutions offer business savings accounts. These accounts let you earn interest on your spare business cash, helping you set money aside for a rainy day or grow your business.
The best savings account for your business depends on how much money you want to deposit and your savings goals. Consider business savings account rates, transaction limits, fees and how you can access your funds to find the right account for your needs.
Personal savings accounts are designed for personal use, while a business savings account must be opened in your business name. Interest rates vary between personal and business accounts, while business savings accounts often also have higher minimum balance requirements and tiered interest rates.
Yes. Online banks like Tangerine Bank and Manulife Bank both offer business savings accounts. They offer competitive rates and minimal fees, so shop around to compare your account options.
Not necessarily. Usually, your credit score is not required when opening a business savings account. The most important factor is whether you meet the financial institution's stated eligibility requirements for opening a particular business savings account.
These requirements may include a minimum business income, a minimum deposit and proof that you own a legitimate, registered business. However, fintech and bank policies can vary so you need to check with your bank to know for sure whether your credit score is a factor.
Although owners of sole proprietorships report their business finances on their personal tax returns, business and personal bank activity must be kept separate. The government of Canada requires sole proprietorships to process cheques using a bank account in their business's name.
The Canada Revenue Agency (CRA) is much more likely to flag you and require an audit if you mix up your personal finances with your business finances.
If you ever get audited or need to track your financial activity for any reason, having all your business finances separate and in 1 place will make it a lot easier to find what you're looking for. If you want to avoid a surprise audit and the headache of trying to sift through your bank activity to find information specifically pertaining to your business, you should keep your personal financial activity away from your business savings account.
Generally, yes. Whether for personal or business use, savings accounts are very liquid and accessible. However, watch out for limits on the number of times you can withdraw funds from your account in any given month.
Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
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