The Best Small Business Checking Accounts

The Best Small Business Checking Accounts

The Best Small Business Checking Accounts

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If you’re looking to grow and sustain your business, opening a business checking account should be at the top of your to-do list. Having a business bank account that’s separate from your personal account allows you to more easily keep track of your money and process financial transactions.

But finding the right bank account is crucial. Nav’s 2018 Business Banking Survey showed that 93% of business owners interact with their banking institution on a weekly basis, so choosing a bank account with all the bells and whistles you need should decide where you bank.

In this article:

Why is a business bank account important?
What is required to open a business bank account?
What to consider when choosing a business bank account
Do I need a business checking or business savings account?
What business banking fees should I watch out for?
The Best Free Business Checking Accounts
The Best Business Checking Accounts for Established/Growing Businesses

Why is a business bank account important?

Keeping your personal and business finances separate is a key first step in making your business legit in the eyes of banks and lenders. Additionally, it reduces the problems you’ll run into doing your taxes, and makes it generally easier to manage your financial life as a business owner and a consumer.

Banks and lenders often want to see that their potential clients have healthy cash flow. They may ask for your recent bank statements, which means they want a clear picture of money coming in and going out of your business. Using a business bank account is the best way to give lenders that clear picture.

Running your purchases, income, and expenses through a business bank account can help you avoid missing out on valuable tax deductions. If you use personal accounts, you may forget which purchases were made for personal use and which ones were made for business use.

It may also set you up for success. Nav’s Business Banking Survey also revealed that 70% of businesses lacking a business bank account that applied for financing in the past two years were denied. These businesses are also twice as likely to consider closing the doors on their business than those that do have a business bank account, stressing the importance of creating a clear separation in your personal and business financial life.

What is required to open a business bank account?

Documentation needed may vary by bank, but you may need any or all of the following:

  • Valid identification (driver’s license, passport).
  • Proof of address (i.e. two or more pieces of mail with your business’s name on it).
  • Business license(s).
  • Documentation of legal incorporation:
    • General and Limited partnerships will need a Partnership Agreement showing business names and partners
    • Limited Liability Corporations will need Articles of Organization or Certificate of Formation
    • Corporations will need Articles of Incorporation or Certificate of Incorporation
  • EIN. Although you can open a business checking account with your Social Security number, you’ll want to use your business’s tax identification number (or “EIN”) if applicable.

What to consider when choosing a business checking account

The business banking study revealed that most business owners choose where they bank based on location and where they bank personally. Other important factors include:

  1. Cost. Free business checking accounts usually don’t earn interest, and they are subject to various fees that can be avoided if you choose your account carefully.
  2. Perks. Business checking account perks may include sign-up bonuses or interest earned.
  3. Monthly transactions. Monthly transactions include cash and check deposits, cash withdrawals, and checks you write. For some banks, electronic payments are also included in this number. Most checking accounts limit the number of transactions you can make per month.
  4. Minimum balance requirement. Many of the best accounts have a minimum average daily balance required to avoid paying monthly maintenance fees. The problem with maintaining a high average balance is that the money maintained is money you won’t be spending on either growing your business or investing in a source that will earn your dollars interest. Keep this in mind when choosing an account.

Business checking account vs savings account

Offerings for checking and savings accounts will vary by bank, but in general you can expect these differences between checking and savings accounts.

Business checking account Business savings account
Transaction limits No transaction limits
Used to pay bills and write checks Used to manage cash reserves
Usually no interest earned Interest earned

What business checking fees should I watch out for?

  • Monthly maintenance fee. This is usually waived for business checking accounts if you are able to maintain an average daily balance of a certain amount (varies by bank).
  • Excess Transaction fee. Most accounts will allow a certain number of transactions (varies depending on the bank and type of checking account you get). These fees vary from $0.10 – over $0.50, so you’ll really want to know what you’ll be paying if you go over your monthly transaction limit.
  • Cash Deposit Processing fee. Most accounts will allow a certain dollar amount for cash deposits before they start changing a fee—e.g., $0.30 per $100 cash deposited in your account.
  • ATM fees. Some banks charge money for using an ATM outside of their network of ATMs. If it’s important to you to be able to take out cash anywhere, consider an online bank where all ATM fees are waived, or a bank like BBVA Compass which charges $0 for using an ATM outside of their network.
  • Early Account Closing fee. Businesses that close their accounts within the first few months of opening may be subject to an early account closing fee.
  • Paper Statement fee. By signing up for electronic statements, your business may be able to save money.
  • Wire transfer fees. Wire transfer fees are common amongst business checking accounts but can vary quite a bit based on whether the transfer is domestic or international. If you plan to make international wire transfers, make sure you know these fees first.

These fees only scratch the surface of possible fees you might be charged. Check your bank’s disclosure statement for all possible fees.

The 8 Best Free Checking Accounts

Most banks that offer business checking accounts offer a way to waive the monthly account fee by maintaining an average daily balance of a specific amount. Before you decide on a bank, consider this—it’s one of the easiest fees to waive, and even a small monthly fee can add up quickly.

Monthly cost Minimum balance to waive fee Monthly free transactions Noteworthy Perks
Chase Total Business Checking ® $15 $1,500 daily balance 100 $200 signup bonus (offer code required)
Bank of the Ozarks Small Business Checking $0 None. 250 None
Navy Federal Credit Union Premium Business Checking $20 $5,000 average daily balance 100 Earns interest (0.05% APY). Dividend rate of 0.05% earned daily.
BBVA Compass Clear Connect for Business $15 $5,000 average daily balance. Or process $5,000/month through Merchant Services. 250 None
America First Credit Union Basic Business Checking $0 None 250 None
Comerica Basic Business Checking $0 None 75 None
Wells Fargo Simple Business Checking $10 $500 average daily balance 50 None
Axos Bank Business Interest Checking $10 $5,000 average daily balance 50 Earns interest (0.80%) & APY of 0.80%.

The 5 Best Checking Accounts for Established and Growing Businesses

If your business is established or growing fast and you’re already pushing the 100-250 transactions/month limit, you may want to consider starting with a premium business checking account. Retail businesses, for example, may need more transaction volume for cash deposits or physical transactions.

Monthly cost Minimum balance to waive fee Monthly free transactions Noteworthy Perks
PNC Bank Business Checking Plus $20 $5,000 average monthly collected balance. Other offset-fee options available. 500 $10,000
BBVA Compass ClearChoice℠ Premium for Business $25 $25,000 OR $50,000 in combined BBVA accounts. 500 $25,000
Wells Fargo Platinum Business Checking $40 $25,000 average balance OR $40,000 in combined business balances (savings, checking, CDs, credit). 500 $20,000
Bank of America Business Advantage Checking $29.95 $15,000 average balance OR $35,000 balance in combined linked BofA accounts. Other options available. 500 $25,000
Chase Performance Business Checking $30 $35,000 in qualifying business deposit accounts 250 $20,000

This article was originally written on May 1, 2018 and updated on November 24, 2020.

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Ty Kiisel

Ty Kiisel is a Main Street business advocate, author, and marketing veteran with over 30 years in the trenches writing about small business and small business financing. His mission at Nav is to make the maze of small business financing accessible by weaving personal experiences and other relevant anecdotes into a regular discussion of one of the biggest challenges facing small business owners today.

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