Having a business checking account seems like a given for any small business owner. Part of separating your personal and business finances simply has to involve a business checking account, along with applying for and using new sources of credit. While a business checking account can’t usually offer the rewards of business credit cards, it is vitally important. Unfortunately, not having a business checking account isn’t just inconvenient, it could also spell bad news for your business.
In a survey done by Nav, 50% of business owners without a business bank account want to open one, but haven’t had the time to set one up. Those who didn’t have a business bank account considered closing their business at twice the rate of those with a separate business bank account. To make things smoother for yourself as you run a business, it’s good practice to open that separate account sooner rather than later (read more about the importance of separating your business finances here).
The majority (57%) of business owners surveyed bank with a larger bank, and there are certainly worthy options among the larger institutions. Both Chase and Bank of America are common choices for business owners, but which business checking account is better for your business and your money?
In an environment with many online banks and business rewards credit card companies, it can be tough to choose. Chase Bank and Bank of America, while big financial institutions, can be good options for businesses that may need direct deposits, mobile banking through a mobile app, preferred rewards programs, and other business account options. Here’s a breakdown.
Chase Bank vs Bank of America: Which one is the best for your business?
Chase vs. Bank of America: Basic Checking Accounts
Everyone starts somewhere. If your business’ needs are relatively basic and don’t have heaps of money coming in, you’ll likely be looking at one of these more barebones accounts. But don’t fret! Nav combs through business checking account options to help you identify what’s best for your business at any stage. Let’s take a look at what each bank can offer you in the way of a basic checking account.
New Eligible Chase Business Checking Account
- Get $300 as a new Chase business checking customer, when you open a new eligible Chase business checking account with qualifying activities
- Access to 16,000 ATMs and nearly 4,900 Chase branches
- Chase has business specialists at your local branch to help with your business needs
- Account Alerts are a great way to stay on top of your account’s activity and enhance security
- Unlimited electronic deposits at no charge, including Chase QuickDepositSM, ACH and ATM
On Bank of America’s side of town, the Business Fundamentals Checking account offers similar benefits. Also available with online banking, maintaining a $3,000 daily minimum balance or a $5,000 average monthly balance, can help you avoid the $17 service fee. This threshold is significantly higher than Chase’s offer, but you can open a business savings account for free with your Fundamentals account with Bank of America.
The higher threshold of a $3,000 daily balance is a bit of a drawback, but good preparation for businesses who plan on leveling up once their business grows. Bank of America’s next option has a $15,000 minimum balance requirement, not nearly the jump that Chase has between the two levels.
|Account Type||New Eligible Chase Business Checking Account||Bank of America Business Fundamentals Checking|
|Monthly Maintenance Fee||Varies by product||$17|
|Minimum Balance to avoid fee||Varies by product||$3,000 daily minimum or $5,000 daily average per statement cycle|
Chase Performance vs Bank of America Business Advantage Checking
Taking a step up, both banks have solid offerings for mid-sized businesses. Here’s the breakdown:
Chase Performance Business Checking
Designed for a business with some time under its belt, the Chase Performance Business Checking account is a strong option. You can take the $30 out of the equation with a $35,000 minimum daily balance. You’re allowed 250 transactions per month and $20,000 in cash deposits without a fee. As with Total Business Checking, you have unlimited electronic deposits every month and the option to open an account that yields interest. The Annual Percentage Yield (APY) will depend on the daily collected balance.
With the high minimum balance limit and 250 transactions per month limit, this is a tough option to swallow. It still allows for a high $20,000 in cash deposits per month, but the jump from basic to mid-tier in this case seems more of a quantum leap.
Bank of America Business Advantage
In terms of business size, Bank of America’s Business Advantage checking is the ceiling. It requires a much lower monthly balance ($15,000) than Chase Performance to avoid the $29.95 monthly fee, a 5 cent improvement over Chase’s requirement. You can also open a business savings or second business checking account at no charge, and will have access to Bank of America’s business services with no fees.
The fact that this account encompasses a wide range of upper-tier clients makes the Bank of America system different from the three-account Chase system, but it allows room for substantial growth for the business that chooses Business Advantage. The option to open additional accounts down the road at no additional cost is a great plus, especially for businesses looking to maintain a savings account as well.
|Account Type||Chase Performance Business Checking||Bank of America Business Advantage|
|Business Size||Mid-Sized||Mid-Sized to Large|
|Monthly Maintenance Fee||$30||$29.95|
Chase Platinum Business Checking
While the Bank of America Business Advantage checking account is meant to serve clients with an average monthly balance of $15,000 and more, this Chase checking account has an additional tier above their mid-level account. Meant for large businesses, the Chase Platinum Business Checking account has a $95 monthly fee that you can avoid with a daily balance of $100,000. You’re allowed 500 transactions without a fee, unlimited electronic deposit, and $25,000 in cash deposits without a fee.
The main benefits of this account are the waived fees for the 4 most expensive wires you send out, and all wires coming in. This can lead to major savings, depending on how you conduct your business. Apart from that, the limits are a bit too much of a hindrance, considering the level of cash flow this product is aimed at. However, there is no minimum opening deposit.
|Account Type||Chase Platinum Business Checking|
|Monthly Maintenance Fee||$95|
Business Checking Accounts: Chase or Bank of America
Whether they’re looking for business checking accounts or business credit cards, business owners looking to grow their business can find excellent financial services with both Chase and Bank of America. At the most basic level, Chase offers a solid set of benefits through their Total Business Checking, and appears to pull ahead of Bank of America at that tier.
Moving into the mid-sized business checking accounts, Bank of America offers customers a lower threshold to avoid fees and an open field to grow and expand your business. For an experienced business looking to continue growing, Bank of America may be the better option.
Additionally, both Chase and Bank of America offer free additional debit cards for employees, and the ability to avoid the monthly service fee is a win. Their online banking services make everything convenient, as well. Having an account with either bank can make it easier to apply with them for business credit cards, as well, which can offer substantial rewards for your business.
Choose Bank of America Business Checking if You:
- Operate your business using a lot of cash.
- Prefer online in-person banking at physical branches.
- Don’t mind paying a monthly fee or keeping a consistent account balance that offers a fee waiver.
BOA business checking accounts should be considered by businesses that are handling up to $20,000 in monthly cash deposits. With a BOA business account, you have the ability to qualify for other types of accounts as you build your business banking relationship. This means if your business begins to grow or shift and you need financing like a line of credit or a loan, your business checking relationship can help you qualify for a lower interest rate.
In addition, BOA’s Business Advantage Relationship Banking offers a plethora of integrations such as:
- Additional business checking and savings accounts included for no monthly fee
- Easy QuickBooks integration
- Ability to grant and customize account access level per employee
- No fees for incoming wires, stop payments, electronic deposits, and more
This is an amazing opportunity for businesses that are expanding at a consistent rate and also may add contractors or employees.
Choose Chase Business Checking if you:
- Are a business that is established.
- Receive a lot of cash deposits.
- Keep a higher minimum balance than other businesses.
The Chase Business Complete Checking Account allows businesses the option to take out multiple debit cards for owners and employees, which is great for the ones who are much more established in their business. In addition, Chase Performance Business and Chase Platinum Business are better for businesses that handle larger amounts of cash and checks while also needing to do a lot of in-person transactions per month.
Chase also allows customers to access all of their business accounts online, which also includes Business Complete Banking accounts. Businesses that need to access everything including your business savings account, certificate of deposit (CD), any business lines of credit, or your merchant services account would like Chase as an option.
Other Business Checking Options to Consider
When considering the best bank option for your small business, you want a banking experience that can focus on convenience and efficiency, and meets your level of business needs. Small business owners who don’t average a higher revenue threshold or cash deposits in their accounts, conduct most of their business online, or just getting started in their small business journey should consider banking options that offer:
- Lower fees (or no fees)
- Overdraft protection or no overdraft fees
- Interest-bearing accounts
- Are insured through the FDIC
Some of the options in Nav’s marketplace are:
However, some of these account options may come with network ATM fees, no physical branch locations, or offer cash back for certain transactions.
Choosing a business checking account comes down to your specific immediate business needs and as you grow your business. Nav’s business checking marketplace can help you sort through your options and match you based on your particular needs with the ultimate goal of helping you attain the best possible banking experience and relationship.
This article was originally written on December 11, 2019 and updated on January 18, 2023.