When it comes to the types of banking options and services a business needs, small business owners have never had more choices. Whether you’re looking for a high-interest online savings account to build a nest egg for your company or a checking account you can easily deposit checks to and make purchases from, we’ve got you covered.
Understanding Banking for Small Business
Just like with the personal accounts you have at your bank, you also have different account options for your business. For example, a business checking account allows you to funnel income and expenses through an account dedicated to your business, as opposed to your personal account mixing the two.
As I said: we’ve never had more choices than we do right now when it comes to banking for business. You can have an online business bank account if you do all your transactions digitally…or a bank with locations right down the street. You can manage your finances through a mobile app..or work with a personal banker in a branch.
Gone are the days where every bank charged a high monthly maintenance fee. Now there are totally free business checking account options, and for those that do charge a fee, there are often easy ways to waive it.
But that’s just the tip of the iceberg. There are many other types of business banking options, which we’ll cover in the next section.
Types of Banking Options for Small Businesses
Now let’s look at your options when it comes to banking.
Business Checking Accounts
The first type of account you’ll likely want is a checking account. With this account, you can deposit cash or electronic funds and make payments with cash, a debit card, or a check. Many banks allow you to get a business debit card not only for yourself but also for employees who need to make purchases on behalf of the company.
Business Savings Accounts
Saving for a rainy day (and unforeseen business expenses) requires a business savings account. These accounts earn interest on the balance and may have a limited number of free transactions, after which a fee may be incurred.
Money Market Accounts
Money market accounts are a cross between savings accounts and checking. You can make purchases with a money market account, and it earns interest. Typically there is a high daily balance requirement.
Small Business Financing
The best banks for small businesses offer far more than checking and savings accounts. Many are also lenders that specialize in small business loans, including those backed by the SBA. Are you looking for a loan to purchase commercial real estate? Or maybe a line of credit you can borrow against when you need the money? Look for a bank that can deliver.
Business Credit Cards
Another type of banking service you might be interested in is a small business credit card. With business credit cards, you can make purchases even when you don’t have cash on hand. Many offer perks like cash back or travel rewards, which can offset the high interest rates they bring.
What to Look for in Banking for Your Small Business
Likely, you could benefit from more than one of the banking services mentioned above, so carefully consider each option to find a bank that can provide you with as many of the solutions as possible in one place.
Start by considering whether you need access to a physical branch or if 100% online banking works for you. If you do business online rather than in person, you might not need branch locations nearby. And online banks often waive fees at ATMs everywhere.
Next, consider whether you can get what you need from a free bank account, or if you need more bells and whistles that might necessitate you paying a monthly service fee. Look for banks that offer a high number of monthly transactions with low fees, if possible.
You definitely want a bank that is FDIC insured, meaning your money is protected even in the event of theft or a data breach with the bank.
Beyond that, look at the requirements for how to open a business bank account. What’s the minimum opening deposit? How many transactions can you make a month before incurring transaction fees? What are other fees, like for overdrafts or ACH (wire transfers)?
And then, look for other business services you might need, such as merchant services, which allow you to accept credit and debit card payments through a card terminal or even on your phone.
The Best Banking Options for Small Businesses
Certainly, do your own research to find banking options that fit your needs, but get a head start with some that we can vouch for.
If you want a bank with local branches, consider some of the best business checking account options we’ve seen:
Chase offers a variety of other services for businesses, including its QuickAccept app with low card processing fees.
Bank of America’s Business Advantage accounts offer Preferred Rewards, with no fees on select banking services and interest rate discounts on loans.
Wells Fargo Business Checking
Wells Fargo offers robust checking options, including mobile banking and mobile check deposits.
& Savings Accounts
If you prefer online basic business checking, Axos has no monthly fees and will reimburse ATM fees. There is no minimum balance requirement, and you get up to 200 free monthly transactions.
And if you like the sound of Axos’ checking account, you’ll love that they also offer a savings account with a competitive interest rate. There are no monthly fees if you maintain an account balance of $2,500.
Capital One’s Business Advantage Savings
Capital One’s Business Advantage Savings lets you earn interest on your money and make up to six transactions a month. Plus, you can use Capital One ATMs with no fee.
How to Know What Type of Banking Will Work Best for You
Whether you’re a new business needing a small business checking account or an established one looking for tools to manage your cash flow, there’s a banking solution that can provide exactly what you need.
This article was originally written on October 5, 2021 and updated on January 18, 2023.