I’ve always believed that every business needs a bank, but not every bank deserves your business. As you start your new business venture and run through the checklist of to-do items such as gathering up capital sources, deciding on the right name, deciding on whether you will incorporate, completing state registrations, finalizing business plans, and more, a very important aspect you must decide on is an efficient banking institution to manage your business bank account.
It’s important to establish a separate business bank account in the name of your business. As in the case of incorporation, this helps to separate your personal expenses and affairs your from business expenses and affairs, which can protect the vitality of your corporate veil under times of lawsuit distress. But which banking institution should you choose?
Choosing From 6,000 Banking Institutions
According to the FDIC (which protects your bank deposits up to $250,000) there are over 6,000 FDIC-insured banking institutions in the United States as of June 2016. Of these 6,000 options, here are some guidelines to help you find a good offer—plus a look at a few good options to consider.
For business checking accounts, I chose two that fit my “3-Star Regimen” of:
- FDIC Insurance Protection up to $250,000
- Great customer service with convenient ways to manage your account
- No fees for checking, debit card usage, nor ATM withdrawals
For business savings accounts, I chose two that fit my “4-Star Regimen” of:
- FDIC Insurance Protection up to $250,000
- Great customer service with convenient ways to manage your account
- No fees for savings account management
- Great savings account yield
Capital One Spark Business Checking
The Spark Business Checking from Capital One comes with no monthly transaction limits, no monthly fees, no minimum balances required, free online invoicing, free online bill pay, a mobile application, and over 40,000 ATMs nationwide that you can access your cash without paying any ATM withdrawal fees. This is one of the best business checking accounts in the country. You can open the account in minutes online.
Capital One Spark Business Savings
The Spark Business Savings from Capital One comes with no monthly service fees, no minimum balances required, a mobile application, along with a 1.00% APY for the first 12 months and then 0.40% APY for every year thereafter. This is one of the best business savings accounts in the country. Also if you have the Spark Business Checking program covered above, you could also get free overdraft protection.
The Farm Bureau Bank Business Checking
The Farm Bureau Bank Business Checking comes with no monthly transaction limits, no monthly fees, unlimited check/debit card access, and free online bill pay. The minimum opening deposit is $100. Farm Bureau Bank has an online banking division that accepts deposits from any citizen in any state in the country, without them needing to be a Farm Bureau Bank member. There’s a $15 monthly fee if you keep balances under $5,000 and if you aren’t a Farm Bureau member, but this can easily be waived by either keeping balances over $5,000 or becoming a Farm Bureau member (membership fees range from $25 to $45 per year, but may vary by location), which helps support the agriculture industry.
The BOFI Federal Bank High Interest Business Savings
The High Interest Business Savings Account from BoFI Federal Bank requires just a $2,500 balance to get no monthly maintenance fees, an initial deposit of just $1,000, free online banking, free statement images, along with a 0.80% APY. For more information on the terms and conditions of the account, see the overview here.
Choosing the Right Business Bank Account
There are a ton of options available for your business banking needs, but not every bank deserves your business. Far too many banks charge small businesses high monthly fees, high transaction fees (sometimes 50 cents or more), along with a host of other fees for their banking services. As a small business owner, your time should be spent managing your business, rather than trying to fully comprehend the hidden “gotcha” fees in a bank’s terms and conditions.
More answers to pressing questions
Business Credit Cards for Bad Credit
What Is a Good Business Credit Score?
How to Shop for a Business Loan Without Hurting Your Credit Scores
This article was originally written on October 24, 2016 and updated on January 26, 2021.
Have at it! We'd love to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and protect yourself. Refrain from posting overtly promotional content, and avoid disclosing personal information such as bank account or phone numbers.
Reviews Disclosure: The responses below are not provided or commissioned by the credit card, financing and service companies that appear on this site. Responses have not been reviewed, approved or otherwise endorsed by the credit card, financing and service companies and it is not their responsibility to ensure all posts and/or questions are answered.