If you’re thinking of starting a business, you’re in good company. According to the Small Business Administration, there are over 30 million small businesses in the United States, with the number of proprietors growing by 2.3% each year.
Whether you’re a freelancer or small business owner, it’s essential that you open a business checking account to manage your income and expenses. In fact, there are many small business lenders that will not even consider a loan application for a business loan if your business doesn’t have a business account.
If you’re not sure where to start looking for the best small business checking account for your business, check out our picks for the best business checking accounts in 2020.
Best overall: Bank of America
Bank of America is our pick for the best overall business checking account because of its low fees and benefits.
Bank of America operates thousands of bank branches and ATMs, so you can get in-person assistance when you need it.
Bank of America offers two business checking options: Business Fundamentals and Business Advantage Checking. While both options are robust and have plenty of perks, you should be aware that the monthly fees can be high, unless you carry a high enough balance and meet some other requirements to qualify for a fee waiver.
The Business Fundamentals account has a $17 per month fee. However, you can have that fee waived if:
- You spend at least $250 in net new purchases on a business debit or credit card
- You maintain an average monthly balance of $5,000 or more
- You maintain a minimum daily balance of $3,000 or more
- You maintain a combined average monthly balance of $15,000 or more in your linked Bank of America accounts
- You qualify for and enroll in the Preferred Rewards for Business program
As a Business Fundamentals customer, you get access to Small Business Online Banking, an online platform that allows you to access your accounts, use online bill pay, and set up alerts. You’ll get business and employee debit cards, so you can easily track your spending, and you can open up a business savings account without having to pay an additional monthly fee.
For more established businesses, the Business Advantage account can be a good fit. It has a $29.95 per month fee, but that can be waived if:
- You spend $2,500 in net new purchases on a business credit card
- You maintain a combined average monthly balance in your linked Bank of America accounts of at least $35,000
- You maintain an average monthly balance of $15,000 or more
- You actively use Bank of America Merchant Services or Payroll Services
- You qualify for and enroll in the Preferred Rewards for Business program
As a Business Advantage customer, you’ll get extra perks like a second Business Advantage Checking account and a Business Advantage Savings account, with no additional fee. Your account will seamlessly connect with QuickBooks, streamlining your bookkeeping processes. And, you’ll pay no fees for business services like stopping payments, incoming domestic and wire transfers, or an introductory check package.
Runner up: Chase
Chase is an outstanding option for business owners of all sizes. As a Chase customer, you have access to 16,000 ATMs and 5,000 branches nationwide. Customer service is available 24 hours a day, seven days a week, so you can always get help with your accounts when needed. However, Chase isn’t available in all states, so check online to make sure it operates where you live.
A debit card is available for employees and can be used both online and at brick-and-mortar stores. Mobile banking options make it easy to handle your finances while you’re on the go; you can deposit checks directly from your phone.
Chase offers three different business checking accounts: Chase Total Business Checking, Chase Performance Banking Checking, and Chase Business Platinum Checking.
Total Business Checking
The Total Business Checking Account has a monthly maintenance fee of just $15, but it can be waived if you maintain a $1,500 minimum daily balance or maintain a linked Chase Private Client Checking or Chase Sapphire Checking personal account.
You’ll get 100 transactions per month at no cost, and unlimited electronic deposits. And, you can deposit up to $5,000 in cash each month without incurring additional fees.
Performance Banking Checking
Mid-sized businesses should consider the Performance Banking Checking Account. It has a $30 monthly fee, but it will be waived if you maintain a combined average daily balance of $35,000 or more in business deposit accounts.
As an account member, you can complete 250 transactions at no charge, as well as unlimited electronic deposits and wire transfers. You can make cash deposits up to $20,000 each month without needing to pay additional fees, and you can open up a Chase Business Premier Savings account with no monthly service fee.
Business Platinum Checking
If you run a larger business, the Business Platinum Checking account may be for you. You can complete 500 transactions per month without a transaction fee, plus unlimited electronic deposits and wire transfers.
It does have a $95 per month fee, but it will be waived if you maintain an average daily balance of $100,000 or more in qualifying business deposit and business investment accounts.
You can make up to $25,000 in cash deposits per month with no extra fee, and all incoming wires and your first most expensive outgoing wires are free per statement cycle.
Best online bank: Azlo
There are no maintenance fees or transaction fees, regardless of your account balance. You can completely manage your account online or through your phone, and your account can easily connect to tools like QuickBooks or PayPal.
Azlo’s account even allows you to send digital invoices. You can connect your Azlo account to your Stripe account to receive credit card payments, and accept fee-free bank transfers.
However, Azlo’s services are completely online. If you need personalized attention, or frequently need to make cash deposits, Azlo may not be a good fit for you. You’d be better off with a traditional bank like Bank of America or Chase.
Business checking FAQ
1. What should I look for when choosing a business banking account?
When you’re looking at your options for a business checking account, pay attention to the bank’s fees and account minimums. Depending on the bank, you may have to pay fees for monthly maintenance, maintain a balance minimum, and pay fees for cash deposits. These added fees can cut into your profits, so make sure you know what fees are involved.
2. What bank has free business checking?
Many banks offer free business checking. Azlo’s business checking account is completely free, with no monthly service fees or account minimums.
Both Bank of America and Chase charge monthly service fees. However, you may be able to get those fees waived if you maintain a minimum balance or link your account to other bank-offered services.
3. Do I need a business checking account?
If you’re a freelancer, entrepreneur, or small business owner, you need to have a business checking account that is completely separate from your personal bank accounts. Not only will it make bookkeeping much simpler, but it will save you from a lot of headaches at tax time. You can sync your account with a program like QuickBooks or Freshbooks to make tax preparation a breeze.
4. What do I need to open a business bank account?
In many cases, you can open a business bank account online. However, there are some banks that will require you to apply in person at a brick-and-mortar branch. In either case, you’ll need to have the following information handy to open a business checking account:
- Your Social Security Number or employer identification number
- Identification, such as a driver’s license
- Business license
- Articles of organization
- Organization documents filed with your state
5. How did you choose the best business checking accounts?
Nav selected the best business checking accounts by completing a rigorous editorial research process where each of the following factors were scored:
- Maximum transactions allowed
- Monthly balance required for fee waivers
- Monthly service fee
- Opening deposit required
- Number of physical branches
- ATM access
- Overdraft fees
- Mobile app reviews
Opening a business checking account
If you’re a small business owner or entrepreneur and you don’t yet have a separate bank account, make opening a business checking account a priority in 2019. Not only will it help you appear more professional, but it will also make managing your finances much easier.
By doing your homework, comparing fees, and reviewing minimum balance fees, you can find the right business checking account for you and your goals.