Live Oak Bank review 2024
Moneywise.com / Moneywise.com
Updated: February 13, 2024
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We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.
There are plenty of digital banks that offer banking products for entrepreneurs and small businesses, but some cap interest rates at low thresholds or have hidden fees. And without physical branches, it may be hard for individuals or small businesses to get the customer support they need.
Founded in 2008, Live Oak Bank prides itself on offering a streamlined alternative to traditional banking. With a stated goal to become “America’s small-business bank,” Live Oak is the top lender of SBA loans nationwide (as of fiscal year 2023).
Though its offerings are limited, the bank is focused on products that can help small business owners buy, build and expand their business. Plus, it offers competitive rates on FDIC-insured high-yield savings accounts and CDs, with no monthly service fees—so its selection of products will also appeal to many ordinary consumers.
About Live Oak Bank
Live Oak Bank is a digital, cloud-based bank serving entrepreneurs and small business owners in all 50 states. The bank offers high-yield savings accounts, certificates of deposit (CDs) and small business loans. Live Oak is partnered with AllPoint network to also offer checking accounts that allow customers to withdraw money.
Since Live Oak doesn’t have any physical branches, all of its accounts are opened and managed entirely online through its website or mobile app. You’ll have to link your savings and CD account to another banking institution to deposit and withdraw money, though you can deposit checks by mail or through the app. Customer support is available via phone or online; phone support is available Monday to Friday between 8 a.m. to 8 p.m. EST.
Without the overhead of a traditional bank, Live Oak is able to offer competitive rates on its products. Its CD rates are well above average—especially on one-year terms—but the $2,500 minimum deposit may be a bit steep for some savers. The bank doesn’t charge monthly service fees, and its savings accounts don’t require a minimum opening deposit or balance. However, there are fees for some transactions; a wire transfer, for example, costs $19.
Live Oak Bank pros and cons
Pros
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Higher-than-average rates on savings accounts and CDs
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No monthly service fees
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No minimum balance for savings accounts
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FDIC-insured
Cons
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No physical branches
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No weekend customer phone support
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No checking accounts or ATM access
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High minimum deposit for CDs
Live Oak Bank products
Savings account
While Live Oak Bank caters to small businesses, it also offers personal banking in the form of savings accounts and CDs. Its personal savings account offers 4.40% APY—nine times the national average, according to the latest update from the FDIC. Opening an account is done entirely online, with no minimum deposit required.
The bank doesn’t charge monthly account fees and interest is compounded daily. However, one drawback is that account transfers are limited to six per monthly billing cycle. And, if your balance is $10 or less and your account is inactive for two years straight, you’ll lose that cash and the account will close.
CD rates
Live Oak Bank offers traditional CDs in a variety of term lengths ranging from three months to five years. It offers competitive CD rates for individuals and small businesses, especially on one-year terms (currently at 5.30% APY for an open one-year CD).
Live Oak’s CDs come with no monthly maintenance fees and no online banking fees. Interest on your CD compounds daily and can be automatically disbursed every month. However, the minimum deposit required to open a CD is $2,500 (to a maximum of $250,000 per account). And it only offers traditional CDs, with no IRA options.
When your CD matures, you can choose to withdraw your funds or renew your term through the Live Oak website or app. If you don’t withdraw your funds within 10 days of the maturity date, your term will automatically renew.
The penalty for withdrawing funds from your CD early depends on the length of your term. For terms of less than 24 months, the early withdrawal penalty is 90 days worth of simple interest. For terms of 24 months or more, the fee is 180 days worth of simple interest.
Business banking
If you’re buying an existing business or franchise, building a business from the ground up or taking your small business to the next level, Live Oak Bank could be a good choice with its high-yield business savings account and CDs. At the time of writing, its small business checking account was not currently available.
Live Oak aims to differentiate itself from the big banks by removing monthly account fees and offering competitive interest rates to small businesses. There are no physical branches, so if you prefer in-person interactions, there may be better options. But the bank does offer “human-powered support” to businesses nationwide with its North Carolina-based customer support team.
Since it’s a digital bank, you can open your account online in minutes and benefit from above-average rates. Live Oak’s business savings account offers a 4.00% APY, which is eight times the national average. Interest is compounded daily, with no online banking or monthly maintenance fees and no minimum balance requirements.
It’s also FDIC insured up to $250,000. Or, through Live Oak’s Insured Cash Sweep, you can access up to $10 million in FDIC insurance coverage—though this requires a $350,000 minimum balance. Funds are disbursed into interest-bearing accounts at other FDIC-insured banks that are part of IntraFi Network Deposits.
Loans
Live Oak Bank was the nation’s top SBA lender, by volume, in 2022. Small Business Administration (SBA) loans typically offer competitive terms, and since a portion of each loan is backed by the government, it’s possible for small businesses to qualify with less equity than required by a conventional loan.
Live Oak’s loans can span $5 million and beyond, though interest rates vary based on the specific product. Live Oak is part of the SBA Preferred Lender Program (PLP), which means it can process applications faster—typically by three to four weeks—than non-PLP lenders, with lower payments and longer repayment terms.
The most common SBA loan programs include 7(a) and 504 loans, but Live Oak can also combine these with conventional loans and lines of credit. It also has a team of in-house US Department of Agriculture rural development experts who can help farmers navigate the various USDA loan programs.
Despite its digital-only status, Live Oak assigns a business analyst to each loan recipient. Your dedicated business analyst can make in-person visits to get to know your business better, provide insight on industry trends and offer personalized recommendations to help grow your business.
Why we like Live Oak Bank
We like Live Oak Bank for its higher-than-average rates and its loan offerings for small businesses, including farmers—though it does impose transaction limits on its savings accounts and doesn’t accept cash deposits. If you’re looking for checking options or a broader range of services, there are other mobile banks that also offer excellent high-yield savings accounts and checking accounts.
Quontic Bank, like Live Oak, isn’t a full-service online bank, but it does excel at competitive checking and savings products. If you’re tired of bank fees and want to earn meaningful interest on your cash, it’s worth considering.
Ally Bank could be a good alternative if you’re looking for a broader range of offerings. It has competitive savings products, but also lets you invest through Ally Invest or its robo-advisor. And you don’t have to worry about account fees for most accounts, just like Live Oak.
CIT Bank has a range of high-yield savings, CDs and money market accounts. And if you’re willing to open an eChecking account with CIT Bank, its Savings Connect account pays a higher interest rate than Live Oak’s high-yield savings account.
Capital One 360 could be a good alternative if you want to open a rewards checking account for your teen or try its competitive 360 Performance Savings account.
| Feature | Quontic Bank | Ally Bank | CIT Bank | Capital One |
|---|---|---|---|---|
| Accounts | Savings, Checking, Money Market, CDs | Savings, Checking, Money Market, CDs | Savings, Checking, Money Market, CDs | Savings, Checking, CDs |
| Online deposits | ✅ | ✅ | ✅ | ✅ |
| Physical branches | ❌ | ❌ | ❌ | ✅ |
| FDIC insurance | ✅ | ✅ | ✅ | ✅ |
| ATM reimbursement | ✅ | ✅ | ✅ | ✅ |
| Reviews | Read review | Read review | Read review | Read review |
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