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TD Bank Small Business Savings and Money Market Accounts Review for 2024
TD Bank small business money market, CDs, savings accounts review 2024: fees, APR/APY interest rates, pros and cons.
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Commerce Bank, which was absorbed by Toronto-Dominion (TD) Bank in 2007, was known throughout the financial industry as "McBank." That's because founder Vernon Hill cut his business teeth as a real estate man shuttling McDonalds impresario Ray Kroc around looking for new restaurant sites to develop. When Hill decided to start a bank in 1973 he was determined to bring a fast-food mentality to the stodgy world of banking.
Out went "banker's hours" and in came seven-day-a-week drive-up service with evening hours; gone were branches, in were "stores"; and those chains that imprisoned pens to bank desks next to stacks of deposit slips? Forget about them. In some years Commerce Bank handed out 28 million plastic pens from the stash in the front of their stores.
The Commerce - and later - TD Bank business model was predicated on maximizing its number of deposits. But even though TD Bank is first and foremost chasing the consumer dollar the bank does not neglect service to commercial accounts. And it turns out "America's Most Convenient Bank" can benefit small business customers as well.
TD Bank Small Business Savings Accounts
TD Business Savings. At TD Bank no business is too small. The required minimum daily balance to begin earning interest is one penny. The monthly maintenance fee is $5.00 but it can be waived with a daily balance of just $500.00. These modest numbers come with a correspondingly microscopic Annual Percentage Yield (APY) - 0.05 percent.
Does that even qualify as a "savings account?" In real numbers the APY translates to keeping $2,000 tied up in your TD Business Savings account for one year before you earn, wait for it, your first dollar of interest. The variable annual yield has not changed in more than a year, presumably because it can not go any lower.
Essentially, a TD Business Savings account is a place to deposit the occasional check for a business that experiences sporadic activity. It is little more than a place to stash a little cash and keep a business viable.
TD Small Business Money Market Plus
For small businesses with a bit more spark, the savings plan of choice is a money market account. Here you need to pony up $25 to get things started. The monthly maintenance fee jumps to $15.00 and the minimum daily balance requirement to get the fee waived is up five-fold to $2,500.
If you have a Business Checking Account in good standing that has seen activity of at least 10 combined deposit and debit transactions in the previous month you can tie the checking together with the TD Small Business Money Market Plus at no charge. The first 50 deposit items and checks are processed for free each month; if volume exceeds that the transaction fee is $0.50.
And your savings return reward at TD Bank for this elevated level of business activity? A tiered APY that returns 0.15 percent on minimum daily balances up to $10,000; 0.20 percent from $10,000 to $24,999.99 and 0.50 percent for deposits above $25,000.
Small Business CD
If your small business is just accumulating profits in a TD Bank business savings account and not using the money for everyday operating expenses you will want to divert funds into Business Certificates of Deposit as soon as it is practical. A Business Basic CD can be opened with as little as $5,000 and the 0.15 percent return from a money market account can be realized in just three months instead of a year. With automatic renewal you can reach a 0.25 percent return in 18 months. The maximum five-year term brings back an annual yield of 0.90 percent.
TD Bank also offers a Business No Catch CD for depositors of at least $25,000. The annual return is lower - 0.20 percent for 11 months - but your money is not socked away in a lockbox since you are allowed one penalty-free withdrawal during the term of the CD. None of TD Bank's certificates of deposit carry a monthly maintenance fee and all are fully insured up to $250,000 per depositor by the Federal Deposit Insurance Corporation (FDIC).
Getting Started
TD Bank makes its simple for small business owners to open a business savings account. All that is required is a Social Security or a Tax Identification number. You don't even have to go to your local TD Bank store - there are over 1,300 in 15 East Coast states - but can sign up online. Your new TD Bank business account comes packed with a battery of free services - automatically scheduled bill pay, enhanced account security, online banking, customizable gift cards up to amounts of $750, and a toolkit of resources to help business owners.
But let's face it. No amount of dog biscuits shoved into the pneumatic tubes by pet-friendly TD Bank tellers is going to make a business savings account worth woofing about while Federal Reserve interest rates are at historic lows. Business savings accounts at TD Bank are for businesses looking for a safe place to store money and make a little, very little interest, without a lot of time-consuming money management. These low returns are endemic across the financial landscape. Any business wanting its money to work harder will need to do more than just deposit profits in a bank's business savings account and expect the returns to pile up.
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