Small business owners and founders of startups have so much to consider when it comes to their business needs. On that long list? Where to open a small business checking account and other bank accounts.
Your options are many. From traditional banks and credit unions to online, fee-free “neobanks,” there are many possibilities, and each comes with its own set of benefits.
Who Needs A Business Bank Account?
While technically there is no law stating that a business needs a business bank account, it’s good practice to have one because it lets you separate your business transactions from your personal ones. It also makes it easier to file taxes for your business.
So to answer the question: anyone who runs a business should have a business bank account.
Can I Open a Bank Account for My Business?
If you are one of the owners of a business (and you may be asked to provide proof of this, such as a letter on business letterhead stating that you are an owner), you can open a bank account for your business.
Things to Consider When Choosing a Bank for Your Business Account
Since not all banks and banking services are created equal, it’s important to start your search for the ideal bank with a list of what matters to you.
First, know that you’re not limited to opening a bank account for your business at your personal bank. It may be convenient to do so, but if that bank doesn’t offer the features you need, it may be better to look elsewhere.
Do you want a brick-and-mortar bank with local branch locations and free ATMs? Or would you prefer to do your banking with an online business bank account that lets you use mobile check deposit and that offers ATM fee reimbursements?
Then there’s the decision of whether to pay fees or not, because there certainly are free business checking account options to consider. These may offer free cash deposits and withdrawals, however, they may have transaction fees if you make over a certain number of monthly transactions.
Consider how much you expect to have as your monthly balance. Some banks charge a fee if you don’t maintain an average minimum balance each month.
And finally: do you want a bank that can provide other types of business banking services, such as a business savings account, money market accounts, credit card, or loan products? Do you need services like ACH wire transfers or merchant services? You might prefer a bank that can be a one-stop-shop.
Does It Cost Money To Open a Bank Account for a Business?
It should never cost you money to open a bank account, whether it’s a business or personal account. However, there may be a minimum amount of money you are required to put in your account to open it, and many accounts have monthly service fees.
Best Banks to Open a Business Bank Account
While the list we cover here is far from exhaustive, it does give you a starting point in researching banks with different types of features.
We’ll look at both online banking and banks with physical locations, as well as those that charge a monthly maintenance fee and those that have no fees. By the end, you should have a better sense of what you need in a business account.
Banks with the Best Welcome Offers for Opening a Business Bank Account
On our list of the best business checking account options are those that come with enticing account offers. It never hurts to put a few hundred dollars in your bank account right off the bat!
If you’re looking for a bank with branch locations and a great welcome offer, look at the Chase Business Complete checking account. Not only can you manage your funds, accept payments with the QuickAccept app, and get same-day deposits at no extra charge, you also can get a $300 sign-up bonus with certain qualifying activities.
There’s a $15 monthly service fee, but you can waive it if you maintain a $2,000 minimum daily balance or complete other qualifying activities.
Banks with the Best Perks for Their Business Bank Accounts
Some banking services come with cool extras that provide incentives for you to stay a customer long term.
Bank of America offers a variety of services to businesses, including checking and savings, loans, cash management, payroll tools, and more.
Customers pay no fees on certain banking services like inbound wire transfers and monthly banking services, and they also can get a 25-75% rewards bonus on business credit cards. Additionally, members can get rate discounts on small business loans and an interest rate booster on savings accounts.
There’s also currently a $100-500 bonus when you open a new account with qualifying activities.
Banks with Free Accounts
If your business banking needs are simple, look for basic business checking account options with no fees.
Capital One Checking
Though both the Basic Checking and Unlimited Checking come with fees at Capital One, you can also waive those fees if you meet certain requirements.
With the Basic Checking, you can waive the $15 a month fee if your prior 30- or 90-day balance averages $2,000 or more. With the Unlimited Checking plan, you can waive the $35/month fee if that prior 30- or 90-day balance averages $25,000 or more. Both accounts have access to the bank’s mobile app and online bill pay.
Banks That Offer More Business Services
If you’re looking for more than just business checking, find a bank that offers small business financing, savings accounts, and other business services.
Wells Fargo Checking
Wells Fargo offers three business checking accounts:
- Initiate Business Checking
- Navigate Business Checking
- Optimize Business Checking
Each offers progressively more features, number of transactions per month, and minimum daily balance requirements.
Additionally, Wells Fargo offers merchant services, small business and SBA loans, and lines of credit.
Here’s another option if you want more bang for your bank buck: TD Bank. In addition to checking and savings accounts for business, the bank also offers invoicing tools, loans, credit cards, and money markets. The bank has low fees, and the first three months of your business checking service are free.
Terms and Rates to Look Out for When Choosing a Bank for Your Business Account
One thing to realize is that even when a bank offers great perks or what seem to be no fees, there are sometimes hidden fees you might not be aware of at first.
Even banks that offer free transactions may charge a fee if you go over a certain number of transactions or withdrawals in a month. You may also be charged a fee for an overdraft or wire transfer, so read the fine print before opening an account.
In terms of interest rates, some checking accounts actually allow you to earn interest on your balance (like Bluevine). If you’re also considering opening a savings account, compare rates from one bank to another. Typically they’re similar, but some will offer different rates for different balance ranges.
How Your Small Business Can Benefit from Your Bank
Banks realize they have to compete to get your business as a small business owner, and that means you hold the power. Look for a bank that can deliver more than one type of business banking solution to fit your needs, as well as one that offers other perks, whether that’s no fees or rewards like what we discussed above.
You can also benefit from features like being able to order business debit cards for employees who are authorized to make purchases on behalf of your business.
If you decide down the road that you want to take out financing, if your bank is also a lender and offers bank loans, SBA loans, or both, you’ll already have an established relationship with your bank, which may streamline the application process to help you with your business finances and help you get the capital you need to improve cash flow.
Tips for Finding the Right Bank for Your Business Account
Once you’ve created your “must-haves” list for your business bank account, including whether you prefer mobile banking or a physical branch, whether you are okay paying a monthly service fee to get additional features like unlimited transactions, and any other qualifying features you’re looking for, compare one bank to another on your shortlist.
Does this bank have convenient ATMs, or will it reimburse you for using other ATMs?
Is there a minimum opening deposit, and can you meet it?
What fees does the bank charge, and are there ways to waive the monthly service fee?
Next, research how to open a business bank account with the bank you’re considering. Some have very simple online processes, while others require you to come into a physical branch to apply.
Also read reviews online about the bank’s customer support, since you want assurance that any issues you have will be quickly resolved and that customer service reps are responsive.
Whether you have a new business and are opening an account for the first time or you run an established company and are looking for a change, spend time with this decision. It’s an important one.