Kabbage Checking review: Amex's first-ever checking account for small business owners with 1.10% APY

American Express is helping small business owners better manage their cash flow with the recent launch of Kabbage Checking™— its first-ever business checking account.

Checking accounts don't often offer the chance to earn interest on your money (let alone at a high rate), but the online-only Kabbage Checking account does both.

It stands out for giving account holders a 1.10% APY on balances up to $100,000. So, a $50,000 average monthly balance would equate to earning $550 in annual interest. The checking account also has zero monthly maintenance fees so you don't have to worry about getting charged just for being an account holder.

Below, Select reviews Kabbage Checking, looking at access to cash, perks and fees that users can expect.

• Access to cash
• Perks
• Fees
• Bottom line

With the Kabbage Checking account, you get a debit card and can withdraw cash for free at one of 19,000-plus in-network ATMs nationwide. There is an ATM locator in the Kabbage mobile app to help guide you to the nearest one. Kabbage also doesn't charge a fee for any withdrawals made outside its ATM network, although you may pay a fee to the bank who's ATM you are using.

Users can make in-person cash deposits at nearly 90,000 participating retailers nationwide, such as CVS, Walgreens, Rite Aid and Walmart. These places are generally open later than your local bank, so this is a huge plus, but be aware the retailer may charge a transaction fee (we cover this in the fees section below).

Users can also transfer money to and from other banks. Plus, they can deposit eligible checks with a photo through the Kabbage mobile app, where they can also manage their account.

Kabbage Checking's biggest perk is the above-average 1.10% APY it offers its customers. In comparison, traditional banks generally offer a low 0% to 0.01% APY on their checking accounts.

The account also offers a "Reserves" feature where users can create up to five sub-accounts to organize their money for specific savings goals or categories, like new computer equipment or taxes.

Beyond Kabbage Checking, small business owners may also want to check out other financial products that Kabbage (an American Express company) has to offer. The below provide you more access to capital, as well as a more seamless process when paying vendors and covering payroll.

• Kabbage Funding™ offers flexible lines of credit between $1,000 and $150,000 with approval in minutes, if eligible.
• Kabbage Payments™ makes it simple to send invoices, accept card payments online instantly, get next-day deposits on all eligible transactions, as well as schedule automatic email reminders to customers with due or past-due invoices.

You must be an existing Kabbage customer to apply for a Kabbage Checking account. It's easy to open an account with Kabbage online within minutes, regardless of your business's revenue or age. Plus, if you already have an existing American Express login, you can use it to speed up the process when signing in.

The Kabbage Checking account comes with zero set-up or monthly maintenance fees, plus no minimum balance requirements. Traditional banks typically have monthly account service fees that can be anywhere from $10 to $29.95 per month (with options to waive the fees if the user meets certain requirements), so the lack of fees with Kabbage is already a big win.

Kabbage won't charge a fee for using an out-of-network ATM, but the ATM operator may. In comparison, many of the big banks can charge up to $3 per transaction when customers use an ATM not in their network.

There is a cash deposit fee for Kabbage Checking customers that varies by retailer and can cost up to $4.95. There is also a bank teller cash withdrawal fee of $3 per transaction, so it's best taking out cash from an in-network ATM at no cost whatsoever.

When traveling abroad, you will be charged a 3% foreign transaction fee of your total transaction amount.

With the Kabbage Checking account, business owners earn a high 1.10% APY on balances up to $100,000, plus access to mobile banking, a large ATM network and minimal fees.

If you are looking to get a special offer for opening a business checking account, consider the Chase Business Complete Banking®. It doesn't currently offer interest like Kabbage does, but new users can earn $300 when they open an account with qualifying activities. Offer expires 7/21/2024