Business Bank Account Fees, Rates, and Terms

Business Bank Account Fees, Rates, and Terms

Business Bank Account Fees, Rates, and Terms

As a small business owner, it’s important to keep business expenses down while also getting your banking needs met. Understanding business bank account fees will allow you to save money while gaining access to a suite of useful items for your business. 

With a business checking account, you can get tools like a debit card, online banking, and online bill pay. You may also gain access to a mobile app or be able to connect directly with accounting software like QuickBooks or Freshbooks. But you want to make sure your bank account fees aren’t eating into your profits.

In this article, we cover the fees you can expect, how much they cost, and how to avoid them. Also, we’ll talk about other rates and terms to keep an eye out for before opening a business bank account.

Do Business Bank Accounts Have Fees?

Some business bank accounts charge fees and others don’t — it depends on the account. You may run into business bank account fees for things like dipping below your minimum balance requirement or using an out-of-network ATM with your business debit card.

However, each financial institution decides whether or not to charge the customer for these things. So you’ll have to examine any account you’re considering to make sure you understand the obvious — and the hidden — fees.

Types of Business Bank Account Fees to Look Out For

There are many different business bank account fees to be aware of before choosing an account. Here are a few of the most common.

Maintenance Fee

What it is

The monthly maintenance fee, also called a monthly service fee or a minimum account balance fee, is the cost of keeping your account open. It covers the administrative side of running your account. You can find business bank accounts that don’t charge this fee or allow you to get out of paying it.

What it costs

It’s usually somewhere between $10 and $20 per month, depending on the account. 

Ways to avoid it

You can often meet qualifying requirements to waive this charge, like keeping an average monthly balance or minimum daily balance, or spending enough each month. Also, many accounts don’t charge a fee to begin with.

Excess Transaction Fee

What it is

Some business bank accounts put a limit on how many monthly transactions you can make. The excess transaction fee charges you if you make too many transactions each month — like making remote deposits, making ACH transfers, or making withdrawals. Online transactions, like mobile check deposit or mobile banking, don’t always count against your transaction limit. Many online fintech companies don’t set limits to the number of transactions, but traditional banks often only allow between 20 and 200 free transactions each month.

What it costs

It will usually cost between $0.40 and $0.50 per transaction.

Ways to avoid it

Tally up the estimated number of banking transactions you think you’ll need to complete each month. Then try to find a business checking account that allows more than that for free. If your small business makes a lot of transactions, consider an online account that doesn’t limit the number of transactions.

Cash Deposit Fee

What it is

Also known as a cash handling fee, many banks will charge to receive a large amount of cash deposits. This charge covers the manpower it takes to physically handle your deposited cash. Electronic deposits don’t have this fee.

What it costs

The charge depends on the account. It can range from around $0.10 to $0.30 per $100 of deposited items over the limit.

Ways to avoid it

If your small business needs to deposit a lot of cash each month — think a restaurant or a gas station — pick a bank account with a high cash handling limit. You can also look for an account with no limit.

Merchant Service Fee

What it is

There’s a second type of transaction fee you might need to be aware of if your bank acts as your merchant service provider, meaning it allows you to accept card payments from customers. This fee affects business checking accounts that allow customers to pay your business directly using a card. It’s a cost associated with each card transaction.

What it costs

It depends on the account, but it’s usually a small percentage of the total payment plus a few cents.

Ways to avoid it

Some banks allow you to sign up for a card reader from the bank that lowers your per-transaction fee. Keep in mind that you may have to pay a monthly subscription cost to use the card reader, however. You may find that other online payment processing companies, like Stripe or PayPal, charge lower fees than your bank. 

ATM Fee

What it is

This fee is the cost of using out-of-network ATMs. If your bank uses the MoneyPass network, you’ll be charged for using an ATM from another financial system. However, your bank controls only half of the fees — the ATM owner can also charge you on the back-end.

What it costs

ATM fees from your bank are usually between $2.00 and $3.50 per transaction. 

Ways to avoid it

There are several ways to avoid these fees. First, you can use in-network ATMs when depositing or withdrawing cash. Also, consider looking for a business checking account that either doesn’t charge ATM fees or reimburses you for the fees you incur. 

Overdraft Fee

What it is

Also called an insufficient funds fee, this is a charge for spending more than your checking account balance. 

What it costs

Most overdraft fees cost between $25 and $40 per transaction. 

Ways to avoid it

You can find a bank that doesn’t charge an overdraft fee. Some banks will simply block you from using your card if you don’t have enough money in your account. Otherwise, look for an account that offers overdraft protection by linking to a savings account with the same bank.

Wire Transfer Fee

What it is

Wire transfers allow a consumer or business to send money almost instantly. Banks may charge fees for sending (outgoing) and receiving (incoming) wire transfers.

What it costs

Outgoing domestic wire transfers (within the US) usually cost between $15 and $25, while outgoing international wire transfers usually cost around $50. Incoming wire transfers typically cost about $10 to $15.

Ways to avoid it

There are a few banks that don’t charge for wire transfers. Or you may be able to save money with an online wire transfer as opposed to one in person at a branch. Another option is lower this cost (but not eliminate it) is to compare costs with a service like Wise. To avoid this fee you may be able to use ACH, online bill pay or a paper check.

Other Rates and Terms to Consider When Choosing a Business Bank Account

As a small business owner, business bank account fees aren’t the only thing you should look into when deciding which account to open. Here are a few other account features to consider.

  • Type of account. There are several types of business bank accounts that could suit your needs besides a checking account. 
    • Money market account: Gives you a debit card and checks, it’s a bit less flexible than a regular checking account but can earn higher interest.
    • Business savings or certificate of deposit account: Great for earning more interest, as well, but are limited in day-to-day functionality.
    • Line of credit or credit cards: Two financing options that expand your cash flow as needed.
  • Welcome offers and rewards. Like credit cards, some small business checking accounts will give you an introductory bonus of a few hundred dollars during your account opening. Oftentimes you have to spend a certain amount in the first few months to get the perk. Additionally, you can get cash back from debit card purchases with some business bank accounts.
  • Annual percentage yield (APY). This is also known as interest rate, but in a positive way — APY is how much interest you can make by holding your money in an account. Some business checking accounts give you interest on your balance just by letting your money sit in the account.
  • Minimum opening deposit. Some banks require you to deposit a minimum amount before you can open a checking account. Others don’t have this requirement. 
  • Expanding your credit. Think about whether you’ll need a business credit card in the future. Often, banks are more willing to lend credit to borrowers they already have a relationship with. 
  • Types of businesses that qualify. Many business checking accounts welcome sole proprietors as customers, but some require a business entity such as an LLC or Corporation (S Corp or C Corp). Some also offer accounts specifically for non profits.

How Much Does It Cost For a Business Business Bank Account?

Business bank account fees are all over the board — it depends on the account. However, they tend to charge more fees than personal checking accounts. 

When you’re deciding which account would work best for you, consider what you’ll be using it for. A sole proprietorship or an LLC would likely have different needs than a startup or a nonprofit. Consider whether you need to be able to deposit cash (and how much), whether you can qualify for the monthly fee waiver, and how many card transactions your customers will make each month. Make sure your checking account fits those needs and remains affordable.

In the chart below, we looked into the most basic account offered by each of the companies to compare fees.

AccountExcess Transactions FeeOverdraft FeeMonthly Maintenance FeeCash Deposit Fee
nbkc bankN/AN/AN/AN/A
BlueVineN/AN/AN/ACannot deposit cash directly
NovoN/A$27N/ACannot deposit cash directly
Bank of America$0 for the first 200, then $0.45 each$35$16, but you can qualify to waive itNone on the first $7,500
U.S. Bank$0 for the first 125, then $0.50 each$36N/ANone on the first 25 deposits
Chase Bank$0 for the first 20, then $0.40 each$0 with overdraft protection, or $34$15, but you can qualify to waive itNone on the first $5,000

Why Do Business Bank Accounts Have Fees?

Business bank account fees are one source of revenue for banks and other financial institutions. These fees also provide incentive for a bank’s customers to behave in a way that will benefit the bank, like keeping a set amount of money in their account or avoiding depositing excessive amounts of cash each month. 

If the fees on your business checking account will eat into your profits, consider your other options. You can find no-fee accounts with unlimited transactions with online companies. Otherwise, you can make sure you qualify to waive many of the existing fees on the account.

What Bank Doesn’t Charge Monthly Fees For A Business Account?

When business owners think of free business checking, they are often thinking of an account that doesn’t charge monthly fees. As you can see from the list above, there are several banks that don’t charge a monthly fee for a business checking account. Options with no monthly fee include:

NBKC Bank Free Business Checking: $0 to open, $0 minimum balance and $0 for many other fees

BlueVine Business Checking: No minimum opening deposit, no monthly service fees.

Novo Business Checking: No monthly fees or minimum balance requirements

US Bank Silver Business Checking Account Package: $0 monthly maintenance fee. (There are caps on the number of free transactions per month.)

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.

Leave a Reply

Your email address will not be published.