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 choose a bank account that has all the bells and whistles you need so it helps you run your business more smoothly.

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

FAQs

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 before approving them for financing. 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 a 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 as 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 Needed to Open a Business Checking Account?

If you’re looking for information on how to open a business bank account, start by knowing what information and documents you’ll need to open one. Whether you want to open an online business checking account or one in a brick and mortar bank, you’ll likely 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: Partnership Agreement showing business names and partners
    • Limited Liability Corporations: Articles of Organization or Certificate of Formation
    • Corporations: Articles of Incorporation or Certificate of Incorporation
    • If you’re a sole proprietor, you won’t need any documentation.
  • EIN. Although you can open a business checking account with your Social Security number, you’ll want to use your business’s Employer 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. Unlimited transactions may come with higher fees.
  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 you keep in the account to meet that requirement 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 business checking and business 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?

Even fee-free business bank accounts can have fees like the following, so read the fine print to be aware of what you could pay.

  • Monthly service 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 range from $0.10-$0.50+ per transaction, 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 charging 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 business bank account where all ATM fees are waived, or a bank like BBVA Compass, which charges $0 for using an ATM outside of its 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 or ACH 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, and an incoming wire or outgoing. If you plan to make international wire transfers, make sure you know these fees first.
  • Overdraft fee. Should you make more purchases than the balance in your account can cover, you may be charged an overdraft fee.

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

How to Choose the Right Checking Account for Your Business

Ultimately, the best business checking account for you is the one that offers the account features that you’re looking for.

Business Debit Card

Having business debit cards for you and your employees makes it easy to make purchases for your business.

Business Credit Card

If you’re also interested in business credit cards, it might be smart to open your business checking account at a bank that offers business credit cards with competitive interest rates and rewards cards. Some offer perks like travel rewards or cash back, which can offset your card payments.

Online Banking

Tech tools like online bill pay and mobile check deposits help save you time. Look for a bank that offers online business tools and a mobile app so you can check your account balance from anywhere.

Business Financing

If down the road, you want to apply for small business loans, it can help to have a relationship with the bank. Opening a checking or savings account for your business with that bank now could help you establish that relationship.

Location

For some businesses, it’s important to have nearby branch locations and a robust ATM network. Others are fine with totally online or mobile banking. Know what your needs are and choose a bank that can deliver.

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 or monthly balance of a specific amount. Some basic business checking accounts will even offer ATM fee reimbursement and free cash deposits.

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.

Here are a few of the best banks that offer free business checking.

Monthly cost Minimum balance to waive fee Monthly free transactions Noteworthy Perks
Chase Business Complete Banking ® $15 $2,000 daily balance 100 $300 signup bonus 
Bank of the Ozarks Small Business Checking $0 None 250 None
Bluevine Business Checking $0 None Unlimited Earns interest (1% APY). 
BBVA Business Connect  $0 None 5 checks or in-branch withdrawals

2 in-branch deposits

All other transactions unlimited

None
America First Credit Union Basic Business Checking $0 None 250 None
Comerica Basic Business Checking $0 None 75 None
U.S. Bank Silver Business Checking $0 None 125 None
Axos Bank Basic Business Checking $0 None 200 None

This article was originally written on May 1, 2018 and updated on October 5, 2021.

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ABOUT AUTHOR

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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