The complete guide to business bank accounts

When it comes to managing your business cash flow, the tools you use can be hugely important. And whether you have a human accountant or opt for online accounting software, it all starts with your business bank accounts.

Types of Business Bank Accounts

When you hear the term “business bank accounts,” you probably think of a business checking account. Certainly, that is the most popular type of business account, but there are others.

A business savings account lets you set money aside for a rainy day while earning interest. Interest rates will vary from one bank or credit union to another. Some have a monthly service fee if you exceed the limit for cash deposits and withdrawals in a month.

There are also money market accounts, which serve as a sort of hybrid between a checking and savings account. You can spend money from the account like a checking account, though there may be a high daily balance requirement. Also, a money market account earns interest.

Also consider business credit cards, which many banks offer. You can charge purchases and pay them off when you have cash available. Using a credit card responsibly can help you build your business credit.

How Does a Business Bank Account Work?

Business bank accounts work just like personal checking and savings accounts, but they are specifically designed for you to use for business transactions. You can connect your checking account to your online payment system so that when clients pay you or make a purchase, the funds get deposited into your bank account.

You can also use your business debit card to make a purchase for your business. Having all your business transactions in one place makes it easier to manage your business finances through your Quickbooks or Freshbooks accounting software.

What Type of Bank Account is Best for Small Business?

There’s no single answer to what the best business checking account is. It really depends on your specific needs. 

Start with the immediate problem you’re trying to solve. Are you looking for a checking account you can easily access to pay for purchases? Do you want a savings account that earns interest so you can put aside money for larger purchases down the road? Are you looking for mobile banking features that let you manage your money from anywhere?

Make a list of the features that you care most about, such as:

• Business debit cards for employees
• Online bill pay
• A mobile app
• Access to other business services

Keep both the short-term and big picture in mind when looking for the best business account for your needs because those needs will likely expand over time.

What to Consider When Choosing Bank Accounts for Your Business

Here are a few things to consider to determine what you need.

Can Your Current Personal Bank Deliver?

You likely already have personal accounts with a bank. This doesn’t necessarily mean you have to open your business accounts at the same place, but it’s a good place to start. See if this financial institution fits your business needs.

How Much Are You Willing to Pay?

Many accounts have a monthly maintenance fee of $15-30, so consider whether you’re willing to pay for that. Some banks will waive that fee if you meet certain criteria, such as maintaining a certain minimum account balance or having other types of business accounts.

You can also open a free business checking account, though check to make sure that you aren’t limited in the number of transactions you can have or other features that you need. Keep in mind, even free accounts may charge transaction fees for things like overdrafts or ACH (outgoing and incoming wires).

What Are Your Needs Down the Road?

Today, you might need a checking account. But maybe in a year, you plan to apply for a loan or line of credit. Opening an account with a bank that is also a small business lender could be a smart move since some banks offer a discount on interest rates to existing customers. And of course, applying for a loan where you already have accounts is just a little easier from a logistics standpoint.

You may also want a bank that offers additional business services, such as merchant services, credit card processing, or payroll services.

What Kind of Perks Do You Want?

If you’re considering a business credit card, there are many that offer rewards. Earn points with each purchase, then redeem them for cash back or travel rewards. 

Some banks offer other perks to business customers, like discounts on other products or even lower interest rates on loans.

Do You Need a Local Branch?

Today, you have more options than ever when it comes to online-only banking services. Are you okay having electronic deposits with an online business bank account, or do you need a physical branch to make deposits, withdraw cash, and interact with a bank rep in person? Most online banks let you use ATMs all over without charging a fee.

How to Open a Business Bank Account

Start by exploring how to open a business bank account. Some banks allow you to open a small business bank account online, while others want you to come to one of their branch locations. You’ll need to provide information and documents about your business and you personally. 

Once your account is approved, you’ll receive checks and a debit card (Visa or Mastercard) for your bank account. You’ll also receive access to your account online.

You might also want to add other banking services, like a savings account or business services like merchant card processing that let you accept payments from debit and credit cards, or accounting software. Some banks have partnerships with business service companies to offer you discounts on them as a customer.

Our Favorite Business Bank Accounts

Again, the right business bank account depends on your needs, but here are a few we at Nav approve of.

Best Intro Offer:

Another great option for business checking is Axos. With a totally free account, no minimum daily balance requirements, and unlimited ATM fee reimbursements, you’ll keep more money in your pocket. Additionally, there’s a $100 bonus when you open a business account and maintain a balance of at least $5,000 for 90 days.

Best Checking with Interest: Bluevine Business Banking

It’s not usual that a business checking account comes with 1% interest, especially for online banking, but that’s exactly what Bluevine offers—which is one of the reasons we like this account from Bluevine. Additionally, the company offers loans and lines of credit to business owners.

Best Full-Service Checking: Chase Business Complete Banking®

If you like the idea of a bank that has branch locations all over the country, as well as plenty of small business offerings, check out Chase’s Business Complete Checking—a more traditional checking account we like. You can even accept payments with the QuickAccept app with low card processing fees.

*All information about the Chase Business Complete Banking® has been collected independently by Nav. has been collected independently by Nav.

Best Money Market Account: U.S. Bank Preferred Business Money Market

Get the flexibility of a small business checking account combined with the interest-earning features of a savings account with U.S. Bank’s Preferred Business Money Market account. The $10 monthly maintenance fee is waived when you have a $1,000 minimum daily ledger balance, and you can earn .01% on your balance.

*All information about the U.S. Bank Preferred Business Money Market has been collected independently by Nav.

FAQs

Still have questions about business bank accounts? Get your answers here.

Does an LLC Need a Business Bank Account?

No matter if your business structure is an LLC, a corporation, a sole proprietorship, or a partnership, you need a business bank account. 

Can You Use a Personal Checking Account for an LLC?

While you technically can use a personal checking account for any business, it’s not wise to do so. Having a dedicated business bank account helps separate your business and personal expenses, which makes filing taxes easier.

What Do You Need to Open a Business Bank Account?

To open a business bank account, you’ll need to provide details about your business, including contact information and Employer Identification Number. You’ll also need to provide information about yourself as the owner, including your contact details and Social Security number. The bank may also require you to make a minimum opening deposit.

What Fees Does a Business Bank Account Have?

Every bank has different fees, but here are a few examples: monthly service fee, fee for wire transfers, overdraft fee, fee if you dip below an average balance.

Nav’s Verdict: Business Bank Accounts

Small business owners, startups, and freelancers all have one thing in common: the better the tools they have at their disposal, the more efficiently they can run their businesses. It all starts with business accounts like those we’ve gone over here.

It’s well worth your time to explore your options to ensure that you find the right business accounts, be they checking, savings, money market, or credit cards, to fire on all cylinders and meet your business banking needs.