WASHINGTON—A new report indicates that small businesses should ditch their business savings and checking accounts in favor of less costly and higher-paying online personal accounts.
That is a key finding from WalletHub’s Q3 2015 Banking Landscape Report which supports what may analysts have been emphasizing, that the online accounts are the best deals.
The report shows that personal online-only savings accounts provide the market’s highest interest rates – offering 75% greater returns than the runner-up, personal online checking accounts.
In addition to being 154% more expensive than personal online checking accounts, business checking accounts also have 51% fewer features and provide interest rates that are 64% lower.
“Small business owners should therefore gravitate to personal account options whenever possible – as is also the case with credit cards,” WalletHub said.
The study gave CU savings products high marks, noting that while they are not as good of a deal as online-only savings accounts, credit union products continue to offer market-leading interest rates among branch-based institutions, providing more than twice as much value as both national and regional banks.
Other report highlights:
Non-bank ATM fees fell an additional 2.68% during Q3 – marking a 16% decline since the beginning of 2014.
Checking accounts currently offer the highest interest rates available through brick-and-mortar banking institutions, providing 111% higher distributions than branch-based savings accounts.
Checking account fees – particularly monthly fees and paper statement fees – are on the rise, but they’re also becoming increasingly avoidable. The minimum balance required to avoid a monthly charge fell by an average of 2.50% during the third quarter.
Student checking accounts – which have the lowest fees on the deposit market – are 70% less expensive than their cheapest general-consumer counterparts. “Lower fees come at a cost, however, as the interest rates offered to students are 81% lower than those available to the general consumer population,” WalletHub said.
Despite rising 1.93% on average during Q3 and 8.93% since the end of 2014, the rates provided by CDs still aren’t worth sacrificing liquid flexibility. “After all, the average two-year CD currently offers a lower yield than the run-of-the-mill online savings account,” WalletHub said.