Checking Account With High APY
The bottom line: If you’re looking for a free business checking account with a high APY and can maintain less than $100,000 in your account, Kabbage may offer a great option. However, if you want a joint banking account or think you’ll need to make frequent domestic wire transfers, other options may fare better.
Kabbage Business Checking
The Kabbage Business Checking Account is a free business checking account with no opening minimum deposit. It’s unique to other business checking accounts in that it offers a high APY for account balances up to $100,000.
Annual Percentage Yield (APY)
1.10% APY
Pros
- No monthly maintenance fee
- No minimum opening deposit
- No non-sufficient funds fee
- Unlimited monthly transactions
- Lets you earn interest on account balances under $100,000
- No out-of-network ATM fees
Cons
- $25 outgoing domestic wire transfer fee
- Only offers an individual account, not a joint account
- Can’t earn interest on account balances over $100,000
- No physical locations
- Doesn’t reimburse you if you’re charged by an out-of-network ATM
- Cash deposit fee of up to $4.95 depending on which retailer you use
- $20 paper check fee if you get a pack of 100
- Access to over 19,000 free ATMs through Kabbage’s ATM network
- Unlimited monthly withdrawals and deposits
- Earn 1.10% APY for balances up to $100,000; no interest if your balance is over $100,000
- Interest compounded daily, deposited monthly
- Member FDIC, through Green Dot Bank
Kabbage Funding
Kabbage Funding lets you apply for commercial lines of credit. You can get credit lines from $1,000 to $150,000.
According to Kabbage Funding, the approval process takes just a few minutes through the company’s website.
To be eligible, you need to either have been previously approved for Kabbage Funding or have opened and used an American Express business card for more than two months. You also need to have been part of a business for 12 months or more, and own a business checking account (the account doesn’t have to be with Kabbage). Otherwise, your account will need to be reviewed manually to see if you are approved.
Once your account is approved, you can see whether you are eligible for drawing lines of credit in 6-month, 12-month, or 18-month installments.
Kabbage Funding doesn’t have any origination fees, documentation fees, monthly maintenance fees, or annual fees. You’ll pay a monthly fee on your line of credit that varies depending on the loans you are qualified for. The 6-month loans monthly fees range from 0.25% to 3.50%, 12-month loans have a monthly fee range of 0.25 to 2.75%, and 18-month loans range from 0.25% to 2.75%.
How Kabbage works
Kabbage is a fintech company that’s partnered with national banks. Kabbage’s business checking account is FDIC insured through Green Dot Bank. Meanwhile, Kabbage Funding loans of credit are issued by American Express National Bank.
Customer support is available weekdays from 8:00 a.m. to 9:00 p.m. ET, and weekends from 10:00 a.m. to 6 p.m. ET. There’s also a help center that answers frequently asked questions about its products.
The Kabbage mobile app has a 4.9 out of 5 rating on the Apple store and a 4.0 out of 5 rating on the Google Play store.
Is Kabbage trustworthy?
Kabbage doesn’t have a Better Business Bureau trustworthiness grade yet. However, its banking partners, Green Dot Bank and American Express National Bank, do have BBB ratings. Green Dot Bank has a B+ rating from the BBB, due to 7,234 complaints against the bank. American Express National Bank has an A+ rating from the BBB.
A good BBB rating won’t necessarily guarantee that your relationship will a company will be positive. To get a better idea of whether Kabbage will be right for you, get perspectives from other business owners.
As of May 2021, Congress has opened an investigation involving potentially fraudulent Payment Protection Program loans that were processed by Kabbage and a few other
fintech companies
. Through the investigation, Congress will decide whether Kabbage and the company’s partner companies had sufficient checks in place to prevent fraud.
If these recent public controversies don’t sit well with you, then you may prefer to look at other banking options.
How Kabbage compares
We compared Kabbage business banking to two other online business banking options: BlueVine and NBKC Bank.
Kabbage vs BlueVine
Kabbage and BlueVine business banking both offer only one business account option — a business checking account.
Both
checking accounts
tick a lot of boxes that may be appealing to business owners: There are no minimum opening deposits, no monthly maintenance fees, and unlimited monthly transactions on either account.
You can earn a slightly higher APY with the Kabbage Business Checking Account. However, BlueVine’s account charges less on outgoing domestic wire transfer fees.
Kabbage vs NBKC Bank
If you’re in search of a bank that offers multiple business account options, NBKC Bank may be better suited for you. NBKC Bank has business checking accounts, business
money market accounts
, and business CDs.
However, if you only want a business checking account, deciding between the two may ultimately be contingent on how you plan on using the account.
Kabbage lets you earn interest on your checking account. As for NBKC Bank, you can’t earn any interest through the NBKC Business Checking Account. However, you can get up to $12 in monthly reimbursements if you’re charged by out-of-network ATMs, and NBKC charges a lower outgoing domestic wire transfer fee.