Just as your business grows and changes, so do the tools you rely on to get things done. If you’ve decided it’s time to switch business bank accounts, here’s how to make it happen as seamlessly as possible.
How to Know When to Change Business Banks: A Checklist
There are plenty of reasons you may want or need to change your business bank account provider. The first is because you have no choice.
Your bank may be acquired and no longer offer business bank accounts, or it may simply get out of that line of business. In early 2021, for example, Azlo stopped offering business checking accounts and in mid-2022 Brex announced it would no longer offer services to many of its small business customers. When this happens, you’ll have no choice but to find another bank.
However, there are also times when your bank account is no longer a good fit. And when that happens, you may want to change banks. Here are several reasons this may happen:
Fees: Are fees eating away at profitability? Can you find a low or no-fee bank instead?
Location: Has your business moved to a state not served by your bank? Do you need a bank locally anymore or would an online bank be a better fit?
Mobile friendly: Does your bank make it easy to do business from anywhere, including with mobile deposits? Do you need free ATM access in more locations?
Customer service: Are you able to get help when you need it?
Business needs: Have your business needs changed? Perhaps you’re growing more rapidly than you expected, or you’re facing unexpected cash flow challenges and your current account is no longer a fit.
Whatever the reason, finding and opening a new business bank account can help you build a more financially healthy business.
What to Look for in a New Business Bank Account
When searching for a new business bank account, your first consideration is probably convenience. At least that’s what most business owners said in Nav’s 2018 Business Banking Survey. That survey revealed that nearly half of business owners opened an account with the bank they use for personal banking, and nearly as many cited location as a primary reason for choosing the bank they did.
However, a convenient financial institution doesn’t always land you the best bank account, as we’ll explain here.
The second reason business owners chose their current business bank was because of cost, according to that survey. Fees can add up quickly, and smaller businesses in particular will feel the impact of fees more acutely.
Finally, perks were the third most popular reason for choosing their current bank. Whether it’s a high APY savings account, integrations with other financial apps, free invoicing or any other number of extra perks, business owners may want a bank that offers a wider range of benefits to meet their needs.
Top Business Checking Account Features All Small Businesses Need
A business bank account is an essential part of your small business financial toolkit. So you’ll want to find one that’s a good fit now, as well as one you can grow with if that’s your goal.
Here are 3 top features to consider:
Affordable fees. For some small business owners, a checking account with low or no monthly fees may be ideal. Others may maintain high enough balances to avoid fees, or may even be willing to pay a little more provided the benefits outweigh the cost. Your threshold will be different than that of other businesses, but be sure to understand fees from the beginning.
Consider: Minimum balance requirements to avoid monthly payment fees, overdraft fees, ATM fees, cash deposit fees, wire transfer fees.
Convenience. As mentioned, many business owners choose a business bank for convenience. Fortunately today there are many online banking options that mean you don’t have to be tied to a local bank for your business checking. With mobile banking, ATMs and other deposit networks, it can be easy for many small businesses to do business to access banking services completely online if you find that bank is a better fit.
Consider: Mobile app, mobile deposit, ATM network, customer service availability, location of physical branches (if needed).
Integrations and Insights. Some business owners want their business bank account to help them understand their business finances. They are looking for integration with their accounting software, for example, or for account management features such as sub accounts they can use to make sure they’ve set aside funds for taxes or periodic expenses.
Consider: Welcome bonus for new accounts, business debit card and/or business credit card, virtual account numbers, accounting software integration, sub accounts, APY on deposits.
Compare the best business checking accounts
Opening a business checking account can increase your chances of getting financing and simplify your cash flow management. Use our research to quickly and easily find the right account for your business.
Pros and Cons of Switching to a New Business Checking Account
Pros
- Save money on fees
- Earn higher APY on balances
- Get new features
- More convenient access
Cons
- Takes time and effort
- Lose access to current account info
- Requires updating payment info
- Can overdraft if not organized
How to Switch Business Bank Accounts
Changing business bank accounts may seem like a hassle. But with some careful planning you should be able to switch effectively. In the long run, it will be worth it.
At the most basic level, there are three steps:
- Open your new account and put money into it.
- Close your old account and remove any remaining funds.
- Make sure any payments or deposits set up with your old account are switched to the new one.
Within those steps there are details you won’t want to miss so let’s go through those next.
Step By Step Instructions for Transferring Bank Accounts
Here’s how to make the switch to your new account, step-by-step. Keep in mind that some banks offer a current account switch service or switch kit to make it easy to change banks.
1. Open Your New Account
Pick your new bank. Here you’ll identify where you want to have your new business bank account. (See our picks for best business checking below.)
TIP: Startups who are opening a business account for a new LLC, Corporation or other formal business entity will likely need a corporate resolution to open the account.
Apply for the new account. You’ll need to apply to the account, either in person if it’s a local bank, or online if it’s not. (Your local bank may also offer the option of opening your new account online.)
Typically, to open a new business checking account you’ll need to provide proof of your personal identity including a driver’s license or passport, as well as your Social Security number. (This information is needed to comply with federal banking laws.) You’ll also need to provide information about your business, which may include your articles of organization, EIN, business licenses or other details depending on the bank’s requirements.
Resource: What Do I Need to Open a Business Checking Account?
Fund the new account. You will put in the money needed to open the new account. If funds are tight, choose a bank with no or low minimum balance required. (You’ll still need to put some amount of money in the account to get started.)
2. Close Your Old Account
Stop using your old bank account. You want time for any outstanding checks to clear, payments to process or ACH invoices in process to be paid.
Before you close your account make sure you have records of all transactions! This is essential for accounting purposes.
Download all your statements and, if necessary, make sure transactions have been synced in your accounting software. Typically when you close a bank account you’ll lose online access to your account. If you normally get paper statements and you’ve saved them in a safe place, or if you regularly download statements and keep a backup, you’re fine. If not, back them all up first.
Also don’t forget to record documentation of all your most recent transactions (after the last statement was created) before you close it.
Remove remaining funds. You may be able to initiate an external transfer online to move most or all of your funds to your new account. A wire transfer may be more expensive, but it may be another option. If not your bank may give you a cashier’s check with the remaining funds and you can deposit that in your new account. Whichever method you choose, make sure you’ve kept a record of these transactions for accounting purposes. Missing money is a headache for bookkeepers and accountants.
Unless your current bank account is changing and won’t be available, you may want to make this transition over a period of a few weeks or even a month or more. Leave enough money in your account to cover any pre scheduled transactions, and to set up new payment methods as described in the next step.
Your bank will likely require you to fill out a form to officially close the account. Keep a copy for your records.
3. Switch Payment Accounts
Chances are you’ve given out your business bank account number or your business debit card number for online deposits from customers or clients or you’ve used your business bank account number or your business debit card number for online payments to vendors, suppliers, taxing authorities etc . You will need to update this information with your clients or customers, as well as suppliers and vendors.
Review your statements for recurring payments and direct debits or for automatic deposits. These transactions may include:
- Business loan payments
- Automatic credit card payments
- Automatic payments for service providers
- Payroll or tax withdrawals
- Direct deposits from vendors or suppliers
- Bill payments set up on auto pay through your debit card
Don’t overlook this step! You don’t want payments to your business to go to your old bank, and you don’t want to miss payments you owe to others as they can affect your business credit.
Best Business Checking Accounts for Small Businesses
Nav makes it easy to find a new business checking account. Consider these top picks:
One Platform to Manage All Your Business Finances
Lili - Banking designed for your business
Lili empowers business owners by combining business banking, accounting, invoicing, and tax preparation in one platform. For business owners, centralizing all aspects of their business finances streamlines their business operations and provides clarity about their financial position. Lili accepts S-Corps, Partnerships, and LLCs (both single and multi-member). Lili is a financial technology company, not a bank. Banking services provided by Sunrise Banks N.A., Member FDIC.
Minimum Balance
None
Monthly Cost
$0
Monthly Free Transactions
Unlimited
Noteworthy Perks
Fee-Free Overdraft
Great For Integrations
Online & Mobile Small Business Checking by Novo
Save up to $150/month in banking fees and subscription payments*. An award-winning business checking account without the sneaky fees or minimum balance. Rest easy knowing that banking won't be an obstacle to starting or running your business. Access your business finances from anywhere, anytime, all online. Every Novo checking account comes with a physical and virtual debit card, so you always have access in the palm of your hand. Spend securely and ditch the fees with a free business debit card. Transact internationally and access your funds from ATMs with fee reimbursement up to $7/month. Novo is a fintech company; not a bank. Deposit account services provided by Middlesex Federal Savings, F.A., Member FDIC. Physical debit cards issued by Middlesex Federal Savings or Patriot Bank, N.A., Member FDIC; virtual cards issued by Patriot Bank, pursuant to licenses from Mastercard® International Incorporated. Mastercard can be used everywhere Mastercard is accepted. Mastercard is a registered trademark of Mastercard International Incorporated. Value of savings is based on market research of fees and subscription pricing as of March 2024.
Minimum Balance
None
Monthly Cost
$0
Monthly Free Transactions
Unlimited
Noteworthy Perks
Deep integrations with the tools small businesses already love
Great For High Interest Rate
Bluevine Business Banking
Earn 4.0% APY on Bluevine Premier and 2.0% APY on Bluevine Standard when you meet a monthly activity goal. Save time and pay vendors with unlimited transactions via ACH, same day ACH, domestic wires, and international payments. Add up to 5 sub-accounts, each with designated account numbers. $95 (waivable) monthly fee for Premier, $0 for standard. No overdraft fees, no minimum balance requirements. To earn the $300 bonus, customers must apply for a Bluevine Business Checking account anytime between now and 12/31/2024 using the referral code above. After opening the account, customers must add funds within 30 days, then meet at least one of the following eligibility requirements every 30 days for the next 90 days from account funding: Deposit at least $5,000 from eligible merchant services to your Bluevine account Make at least $5,000 of outbound payroll payments from your Bluevine account using eligible payroll providers Spend at least $2,000 with your Bluevine Business Debit Mastercard® and/or Bluevine Business Cashback Mastercard®
Minimum Balance
None
Monthly Cost
$0-$95 (Waivable)
Monthly Free Transactions
Unlimited
Noteworthy Perks
Up to 3.7% APY
Great For Unlimited Digital Transactions
Capital One Business Checking Accounts
No fees on unlimited digital transactions. Free overdraft coverage and debit cards included. All options include online and mobile banking, as well as mobile deposits from your smartphone. Send electronic payments to vendors for free.
Minimum Balance
None
Monthly Cost
Starts at $15 monthly service fee, waived with $2,000 minimum balance
Monthly Free Transactions
Unlimited Digital Transactions
Noteworthy Perks
Deposit checks from your phone
Great For Digital Banking
Chase Business Complete Banking®
Earn up to $500 when you open a new Chase Business Complete Checking® account. For new Chase business checking customers with qualifying activities. Multiple ways to waive the $15 Monthly Service Fee, including maintaining a minimum daily balance or purchases on your Chase Ink® Business credit card. Full-service business banking. Convenient access to all your business banking services in one place -- lending, checking, credit card and payment solutions. Your choice of payment types. Choose from a full range of options for accepting payments and making deposits that include Zelle®, Online Bill Pay, wire transfers and ACH payments. Convenient access to payment processing. Process all major debit and credit cards with QuickAccept®. It's a built-in feature with your Business Complete Checking account. Get support you can rely on. Get access to our customer support team, plus a wide array of solutions that carter to every stage of your business Full-featured banking online and on-the-go. Manage your business' finances on your terms with the latest online and mobile banking technology. Associate Debit and Employee Deposit Cards available upon request
Minimum Balance
None
Monthly Cost
$15 with ways to waive
Monthly Free Transactions
Unlimited
Noteworthy Perks
$500 Sign Up Bonus
Great For 1% Cash Back
Lending Club Tailored Checking
Unlimited transactions with no fees. Get 0.10% APY on certain balances and 1% cash back on certain transactions made with the LendingClub debit card. Manage your account online and use approved ATMs without fees.
Minimum Balance
None
Monthly Cost
$10 monthly maintenance fee, waived with minimum balance of $500
Monthly Free Transactions
Unlimited
Noteworthy Perks
1% Cash Back
Great For Linking Accounting Software
Relay Financial
Keep your business on the money. Relay’s business checking features will keep you and your team on the money all of the time. Don’t worry about fees, paperwork, or branch visits with this money management platform designed to help small businesses get crystal clear on what they’re earning, spending, and saving.
Minimum Balance
None
Monthly Cost
$0
Monthly Free Transactions
Unlimited
Noteworthy Perks
Large suite of integration options
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Gerri Detweiler
Education Consultant, Nav
Gerri Detweiler, a financing and credit expert, has been featured in 4,500+ news stories and answered 10,000+ credit and lending questions online. In addition to Nav, her articles have appeared on Forbes, MarketWatch, and Startup Nation. She is the author or co-author of six books, including Finance Your Own Business, and she has also testified before Congress on consumer credit legislation.