Best Bank for Small Business
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The right bank account can make or break your business. Narrow down your options and find the best business bank account with this guide.
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Basic Business Checking - $200 Bonus
- New business owners get a $200 welcome bonus!
- Zero monthly maintenance fees
- Unlimited Transactions
- Unlimited domestic ATM fee reimbursements
- $0 Minimum Opening Deposit requirement
- 2 Free Domestic Wires, monthly
- Cash Deposit capability via MoneyPass and AllPoint networks
Free Checking Account for Sole Proprietors and Single-Member LLC
- Sign up in 3 minutes; no credit check
- No account fees - $0 monthly fee, overdraft fee, foreign transaction fee, or ATM fees at 38,000+ locations
- Auto save for taxes
- Track write-offs with a swipe
- Prefilled annual Schedule C
Business Checking - Up to 2.0% APY
- 2.0% APY on your balance up to $250,000 for customers that meet monthly eligibility requirements
- $0 minimum opening deposit
- $0 monthly service fee
A business banking account is more than just a place to store your business funds. The right bank can also make managing your business easier and help you reach your goals.
But they're not one-size-fits-all. Restaurants need to deposit cash at a physical branch. A tech startup may prefer an online bank.
Take a look at our list of the best banks to open a business checking account.
Here are the best banks for opening a small business account:
- Chase for best national bank
- Bluevine for online business banking
- Found for self-employed
- Novo for small online startups
- Axos Bank for business checking with interest
- Wells Fargo for SBA loans
- Bank of America for low minimum requirements
- Capital One for high volume businesses
- U.S. Bank for free checking with a national bank
- NorthOne for user-friendly features
- LendingClub for cashback rewards
- Digital Federal Credit Union for best credit union
Looking for business checking promotions? Jump down to find current deals and coupons by state.
Best Type of Bank to Open a Business Account
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The first step is to decide what kind of bank you want to use for your small business. There are three main types:
- National bank: These are the big banks with a lot of branches and ATMs across the nation. They're convenient and usually offer more services and products. This could be a good choice for more established businesses.
- Local bank: Micro businesses may benefit more from a local bank or credit union. A smaller bank is more likely to take a greater interest in helping local businesses grow.
- Online bank: This option is good for online businesses or freelancers who don't need cash deposits. Online banks have less fees and requirements. As a bonus, they often offer higher interest rates.
10 Best Banks for Business Accounts in 2023
Here are the top picks for small business bank accounts. We'll go over the pros and cons of each one.
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1. Chase: Best Brick-and-Mortar Bank
Chase made our #1 spot because of its excellent business products and customer service. Plus, it often offers coupons for new customers.
It has a unique business checking account with credit card processing built in. You don't need to open a separate merchant account. It's a good option for small retailers, restaurants, and local services.
When you take card payments using QuickAccept, you get same-day deposits into your business checking account. This really helps to keep the cash flow moving.
Chase also has some of the best business credit cards on the market. There are several options ranging from cashback to travel rewards.
Chase Business Complete Banking℠ - $300 Bonus
- Earn $300 when you open a new Chase Business Complete Checking℠ account. For new Chase business checking customers with qualifying activities.
- Multiple ways to waive the Monthly Service Fee, including maintaining a minimum daily balance or purchases on your Chase Ink® Business credit card.
- Built-in card acceptance. Accept card payments anytime, anywhere in the U.S., and get transparent pricing with Chase QuickAccept℠.
- Same-day deposits with QuickAccept. Free up the cash you need to keep your business moving forward with same-day deposits at no additional cost.
- Alerts to help you stay on top of your account activity.
- Easy account management through Chase Business Online and the Chase Mobile® app.
- Unlimited electronic deposits, ACH and Chase QuickDeposit℠
- Convenient access to more than 16,000 ATMs and more than 4,700 branches.
- Monthly Fee: $15 with ways to waive
Pros:
- Over 4,700 branches and 16,000 ATMs
- All-in-one checking + payment processing
- Excellent small business credit cards
- Highly-rated mobile app
- 24/7 customer service with real reps
Cons:
- Minimum requirements to waive the monthly fees
- Many other banking fees like overdrafts and wires
2. Bluevine: Best Online Business Checking Account
Bluevine is popular for its high interest rate. It's a basic business checking account, but it has no monthly fees with unlimited transactions.
You can earn the high APY if you do one of the following:
- Spend $500 per month with your Bluevine business debit card, OR
- Receive $2,500 per month in customer payments
There's no business savings account, but you can open 5 free subaccounts with their own unique account numbers. Your balances in the subaccounts are eligible for interest too (up to $100k combined across all the accounts).
It lets you deposit cash at over 90,000 GreenDot retailers (though there's a fee). With cash deposits and lots of free ATMs, it works even for a small physical local business.
Bluevine also offers flexible business line of credit up to $250,000.[1] You can get decisions in as little as 5 minutes.
Business Checking - Up to 2.0% APY
- Minimum Deposit to Open: $0
- Balance Requirement: $0
- Monthly Fee: $0
- APY: 2.0% on balances up to $250,000 with monthly eligibility requirements; 0% APY on balances over $250,000
- ATMs: 37,000+ MoneyPass ATMs
- Perks: 2 free checkbooks per year; No non-sufficient funds fee
Pros:
- Potential to earn a high APY
- Total of 6 free business checking accounts
- 2 free checkbooks per year
- No fees for overdrafts or incoming wires
- Cash deposit available
- Multiple users and different access levels
Cons:
- $4.95 for cash deposits
- Limited integrations
Bluevine is designed for growing small businesses. The next bank may be better if you've just started freelancing or self-employment.
3. Found: Best for Self-Employed
Doing taxes and managing business finances can be hard for new self-employed people. Found helps you with that. It combines business banking with bookkeeping and tax tools.
Found tracks your business expenses, so you don't miss any write-offs. And the cool thing is - whenever you have a business transaction, it estimates your new tax bill. This way, you'll always know how much you owe.
The money for taxes is automatically set aside in a Tax Savings Account. So when it's tax time, you've already saved for it.
Found can even do your taxes for you. Just fill out a tax profile and Found will send your quarterly tax payments directly to the IRS - correctly and on time! This is a huge help for those who struggle with taxes.
And finally, you can send customized invoices right from the app.
Free Business Banking for the Self-Employed
- Minimum Deposit to Open: $0
- Balance Requirement: $0
- Monthly Fee: $0
- APY: N/A
- ATMs: Any ATM that accepts Mastercard; No ATMs fees from Found, but the owner may have fees
Pros:
- Automatically track tax write-offs
- Always see your estimated taxes in real-time
- Save and pay for taxes straight from the app
- Free unlimited invoicing
- No credit check
Con:
- No cash deposits or check deposits
- No physical checks
- No savings accounts aside from Tax Savings Account
- No network of free ATMs
- No wire transfers
- Only one physical debit card per account
Though Found has great tax tools, as you can see, it's quite limited in other areas. If you need more, the next bank has more features.
4. Novo Bank: Best for Small Online Startups
Novo is free online banking platform for entrepreneurs and small business owners. It has no monthly fees.
What makes Novo unique is that it integrates with thousands of popular business tools like Shopify, QuickBooks, HubSpot, Google Ads, Slack, and more. You can have everything all in one place along with your banking.
It also offers exclusive savings from popular business services. Examples include $20,000 in fee-free card processing with Stripe and $300 in Google Cloud credit.
Another great feature is that you can create 10 Reserves. This helps with cash management so you can put aside funds for things like taxes or big business expenses.
Novo does not do a credit check. Your credit score will not be affected by having a Novo account.
Free Business Checking
- Minimum Deposit to Open: $50
- Balance Requirement: $0
- Monthly Fee: $0
- APY: N/A
- ATMs: Unlimited ATM fee rebates each month worldwide
- Perks: Thousands of dollars in exclusive perks from popular business services
Pros:
- Create up to 10 Reserves
- Thousands of integrations
- Free unlimited invoicing
- Send paper checks for free through the Novo app
Cons:
- No overdraft protection. Each overdraft costs $27.[2]
- No cash deposits
- Cannot send wires. You can only send international money transfers through the Wise integration.
Banks may run a soft inquiry on your credit. That won't affect your credit score. But most banks do run your banking history through the ChexSystem. If you have had overdrafts or other bad marks, that may go against you.
5. Axos Bank: Business Checking with Interest
Axos Bank offers business checking and savings accounts with competitive interest rates.
It has an excellent business interest checking account. Unlike Bluevine, there are no deposit or activity requirements to earn the APY. You get a high interest rate on all balances below $50,000.
You get unlimited domestic ATM fee reimbursements. Cash deposits are available via MoneyPass and AllPoint ATMs.
But the business interest checking account requires an average balance of $5,000 to waive the monthly fee.[3] Another downside is that it only gives you 100 free transactions per month.
Basic Business Checking - $200 Bonus
- New business owners get a $200 welcome bonus!
- Zero monthly maintenance fees
- Unlimited Transactions
- Unlimited domestic ATM fee reimbursements
- $0 Minimum Opening Deposit requirement
- 2 Free Domestic Wires, monthly
- Cash Deposit capability via MoneyPass and AllPoint networks
Business Interest Checking - 1.01% APY
- New business owners get a $200 welcome bonus!
- Earn up to 1.01% APY*
- $100 minimum opening deposit
- Pay no monthly maintenance fee with an average daily balance of at least $5,000
- Unlimited domestic ATM fee reimbursements
- Up to 100 free items per month, $0.50 per item thereafter (includes debits, credit, and deposited items)
- Up to 60 items per month for Remote Deposit Anywhere (includes monthly per item processing limitation)
Pros:
- Offers higher interest rate than most other banks
- Unlimited domestic ATM fee rebates
- First set of 50 checks free
Cons:
- The business interest checking account requires a higher minimum to waive the monthly fee
- Only integrates with Quickbooks
6. Wells Fargo: Best for SBA Loans
Wells Fargo has the largest national footprint. It has a wide range of services and convenient locations. It's a good choice if you want everything in one place.
It's also one of the top SBA 7(a) lenders. If you think your business may need an SBA loan in the future, it's good to go with a bank known for approving these loans.
The Wells Fargo Initiate Business Checking Account is ideal for growing small businesses. It's pretty easy to waive the monthly fee. But you only get 100 free transactions per month.
And if you need more banking services down the road, Wells Fargo also offers business loans, payroll, tax programs, merchant services, and insurance.
Initiate Business Checking
- 100 free transactions each fee period
- $5,000 in cash deposits processed free each fee period
- $25 minimum opening deposit
- Waive the $10 monthly service fee by maintaining a $500 minimum daily balance or a $1,000 average ledger balance
- Balance Requirement: $500 minimum daily balance to waive $10 fee
- Monthly Fee: $10 (can be waived)
- ATMs: 12,000+ nationwide
Pros:
- Over 4,900 branches in 37 states.
- 3 business checking accounts for different needs
- A large range of business services
- Active SBA lender
Cons:
- Many other banking fees like overdrafts, stop payments, and wires
7. Bank of America: Low Minimum Requirements
Bank of America is one of the largest brick-and-mortar banks in the United States. It's a good option if you're looking for lots of physical branch locations and ATMs.
The Business Advantage Banking account has 2 tiers. You can switch between them anytime. This gives you more flexibility to switch as your needs fluctuate.
The basic tier offers easy ways to waive the monthly fee. You only need $250 in debit card monthly purchases. No minimum balance required.
It comes with built-in cash management tools. Your account integrates with business apps like Quickbooks, Google Analytics, and tons more. You can see your business metrics all in one place.
Business Advantage Fundamentals™ Banking
- 200 free transactions per month
- $7,500 in cash deposits per month
- Waive the $16 monthly fee in a variety of ways
- Minimum Deposit to Open: $100
- Balance Requirement: None
- Monthly Fee: $16 (can be waived by spending $250 in new net qualified debit card purchases each month)
- APY: N/A
- ATMs: 17,000 ATMs
Pros:
- Thousands of ATMs and financial centers
- Switch between the two business checking accounts
- Many app integrations
- Access to Small Business Specialists
- Highly rates mobile app for customer satisfaction
Cons:
- Many other banking fees like overdrafts, stop payments, and wires
- Less active SBA loans lender
Shep Hyken, customer service/experience expert, keynote speaker and New York Times bestselling author
8. Capital One: Best for High Volume Businesses
For businesses with a lot of monthly transactions, Capital One is worth looking into. The Basic Business Checking gives you unlimited free digital transactions.
Another thing Capital One is known for is their business credit cards. It has a strong lineup of cards offering cashback or travel rewards. Plus, all Capital One credit cards have no foreign transaction fees.
Basic Business Checking
- Unlimited free transactions each month
- $5,000 in free cash deposits each month
- Waive the $15 monthly service fee by maintaining a prior 30- or 90-day average balance of $2,000 or more
- Minimum Deposit to Open: $250
- Balance Requirement: $2,000 average balance to waive $15 fee
- Monthly Fee: $15 (can be waived)
- ATMs: 70,000+ Capital One, MoneyPass and Allpoint ATMs
Pros:
- Unlimited fee-free transactions
- Free ATM access to Allpoint and Moneypass ATMs
- Excellent small business credit cards
Cons:
- Business checking accounts require higher minimum balance
- Only have branches in a few states
- You may need to apply in person
9. U.S. Bank: National Bank with Free Checking
It's hard to find a free business checking account at a big financial institution. U.S. Bank is one of the few large physical banks with a no-fee business checking option.
The Silver Business Checking Package has no monthly service charges or account minimum balance. It's ideal for new small businesses and startups looking to save money on bank fees.
US Bank has over 2,000 branches. But even if you don't live near a branch, you can also use 37,000+ MoneyPass ATMs for no fees.
Silver Business Checking Package - $500 Bonus
- Enroll in business online banking within 60 days of account opening.
- Complete $3,000 in new money deposits and maintain for 60 days from account opening.
- Monthly Fee: $0 monthly maintenance fee
Pros:
- Free basic business checking account
- Nonprofit and premium checking options
- One of the more active SBA lenders among big banks
Cons:
- Many other banking fees like overdrafts and wires
- Checking accounts have less features than other big banks
Silver Business Checking Package - $500 Bonus
- Enroll in business online banking within 60 days of account opening.
- Complete $3,000 in new money deposits and maintain for 60 days from account opening.
Gold Business Checking Package - $500 Bonus
- Enroll in business online banking within 60 days of account opening.
- Complete $3,000 in new money deposits and maintain for 60 days from account opening.
Platinum Business Checking Package - $500 Bonus
- Enroll in business online banking within 60 days of account opening.
- Complete $3,000 in new money deposits and maintain for 60 days from account opening.
10. NorthOne: User-Friendly Features
NorthOne is a digital business checking platform designed for freelancers, startups, and all types of businesses. Even though the $10 monthly fee can't be waived, it offers some of the most well-rounded features.
You can create unlimited "envelopes," which act like savings accounts. You can create custom rules to automatically move money into your envelopes (either a percentage of every payment or a set amount on a recurring schedule).
Another cool feature is the free Invoice Maker. This lets you create and send professional invoices right from the app. And if you need to deposit cash, you can do so at Green Dot locations.
It also offers many integrations, including Quickbooks, Gusto, Wave, Shopify, Square, Amazon, and tons more.
NorthOne Business Banking
- Minimum Deposit to Open: $50
- Balance Requirement: $0
- Monthly Fee: $10 (cannot be waived)
- APY: N/A
- ATMs: 2 million MoneyPass and Cirrus® ATMs worldwide
Pros:
- Unlimited envelopes
- Ability to deposit cash
- No overdraft fees
- Lots of digital integrations
Cons:
- $10 monthly fee can't be waived
- No checkwriting
- Only one debit card
- Cannot send or receive international wires
11. LendingClub: Best for Cashback Rewards
LendingClub (previously Radius Bank) is an online-only bank with a great business checking account.
The Tailored Checking account gives you Unlimited 1% cashback on debit card purchases (for accounts with at least $500 balance). Plus, you earn up to 1.50% APY.
You get free ATM access worldwide. You can deposit cash in a deposit-taking ATM in either the MoneyPass or Sum network.
To apply to LendingClub, you must have an online website or social media presence.
Tailored Checking - Business Banking
- Minimum Deposit to Open: $100
- Balance Requirement: $0
- Monthly Fee: $10 (can be waived by maintaining a $500 balance)
- APY: 1.50% APY on balances up to $100,000.00 and 0.10% APY on the portion of the balance that is $100,000.00 and greater
- ATMs: Unlimited ATM fee rebates worldwide
- Perks: Unlimited 1% cashback on debit card purchases (for accounts with at least $500 balance)
Pros:
- Free ATM access worldwide
- Integrates with Quickbooks, Quicken, and Mint
- Variety of SBA lending programs
Cons:
- Minimum balance requirements to waive the monthly maintenance fee and receive cashback rewards.[4]
12. Digital Federal Credit Union: Best Credit Union
Consider a credit union if you don't like the idea of a big bank. Credit unions are often more affordable and offer more personalized service.
Digital Federal Credit Union lets anyone join by becoming a member of one of their participating organizations. The membership fee starts from just $10. Or you can join if you or a family member works for one of the many participating employers.
It offers a Free Business Checking account with no monthly maintenance fees or minimum balance requirements. It's ideal for new businesses with low activity.
Pros:
- Free ATM access to 80,000+ DCU, Allpoint, SUM or CO-OP ATMs
- Up to 4 debit cards per account (upon approval)
- Several business savings accounts, including IRA options for your employees
Cons:
- Limited services compared to the big banks
- Less small business loans
- Physical branches only in MA and NH
Best Regional Banks for Small Business
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If you have a local business, a regional or community bank may fit your needs. It gives you the chance to build a personal relationship with your banker. They also have more interest in helping small businesses succeed.
Here are some of the best business checking accounts from regional banks:
Huntington Bank
Huntington Bank offers three business checking accounts depending on the size of your business. It even has a free account with no minimum balance. All accounts come with digital tools to help you manage income and expenses. This bank has a large presence in the Midwest.
Business Checking Account - $1,000 Bonus
Open a new Huntington Unlimited Plus Business Checking, Business Analyzed Checking, or Non-Profit Analyzed Checking account using offer code. Make a minimum cumulative new money deposit into the new checking account of at least $20,000 within 60 days of account opening. Account must maintain an open status for at least 90 days to be eligible.
This offer is only available to applicants residing in Colorado, Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, South Dakota, West Virginia, or Wisconsin. This offer is only available to new business checking customers. All current Huntington business checking customers, including those with business checking accounts closed within the last six months, are not eligible. $1,000 bonus will be deposited to your new checking account within 14 days after completing requirements.
Business Checking Account - $100 Bonus
Open a new Huntington Business Checking 100, Huntington Unlimited Business, Huntington Unlimited Plus, Business Analyzed, Non Profit Analyzed, or Non Profit Interest Checking account. Make a minimum cumulative new money deposit into the new checking account of at least $2,000 within 60 days of account opening. Account must maintain an open status for at least 90 days.
This offer is only available to applicants residing in Colorado, Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, South Dakota, West Virginia, or Wisconsin. This offer is only available to new business checking customers. All current Huntington business checking customers, including those with business checking accounts closed within the last six months, are not eligible. $100 bonus will be deposited to your new checking account within 14 days after completing requirements.
Business Checking Account - $400 Bonus
Open a new Huntington Unlimited Business Checking, Unlimited Plus Business Checking, Business Analyzed Checking, Non-Profit Analyzed Checking, or Non-Profit Interest Checking account. Make a minimum cumulative new money deposit into the new checking account of at least $5,000 within 60 days of account opening. Account must maintain an open status for at least 90 days to be eligible.
This offer is only available to applicants residing in Colorado, Illinois, Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, South Dakota, West Virginia, or Wisconsin. This offer is only available to new business checking customers. All current Huntington business checking customers, including those with business checking accounts closed within the last six months, are not eligible. $400 bonus will be deposited to your new checking account within 14 days after completing requirements.
PNC Bank
The basic Business Checking lets you waive the $10 monthly maintenance fee by maintaining a $500 average monthly balance. The opening deposit is just $100.
PNC Bank: Business Checking Account - $200 Bonus
Open a new PNC Business Checking or PNC Business Checking Plus account. Maintain an average cycle balance of $5,000 in your new checking account for each of the first three statement cycles. Make at least 20 qualifying PNC Bank Visa Debit card transactions within the first three statement cycles.
This offer is only available to businesses with an annual revenue of less than $5 million. All existing business checking customers, including those who have closed an account in the past 90 days or has been paid a promotional premium in the past 12 months are not eligible for this offer. $200 bonus will be credited to your new business checking account within 90 days after all conditions have been met.
PNC Bank: Business Checking Account - $500 Bonus
Open a new PNC Treasury Enterprise Plan or Analysis Business Checking account. Maintain an average cycle balance of $30,000 in your new checking account for each of the first three statement cycles.
This offer is only available to businesses with an annual revenue of less than $5 million. All existing business checking customers, including those who have closed an account in the past 90 days or has been paid a promotional premium in the past 12 months are not eligible for this offer. $500 bonus will be credited to your new business checking account within 90 days after all conditions have been met.
TD Bank
TD Bank has a large footprint on the East Coast with 1,300 locations. It's known for extended banking hours and 24/7 live customer service.
TB Business Convenience Checking Plus
- Minimum Deposit to Open: $100
- Monthly Fee: $25 (waived by maintaining a $1,500 combined minimum daily balance with one TD personal checking account)
- APY: N/A
- ATMs: 1,300 TD ATMs
First Horizon Bank
First Horizon Bank offers a BizEssentials Checking account with no minimums or monthly service fee. This bank has a large presence across 10 southern states.
BizEssentials Checking
- $0 monthly fee
- No fee on first 250 transactions each month
- No fee on first $5,000 deposited in coin and currency each month
- Balance Requirement: $0
- Monthly Fee: $0
- ATMs: Fee-free access at 43,000+ First Horizons and Allpoint ATMs
Methodology
We compared dozens of both brick-and-mortar and online banks. We came up with this list of the best banks for small businesses by looking at several factors:
- Nationwide accessibility
- Reasonable minimum balance requirements
- Account fees
- Unique banking features
- Customer support
- Excellent reputation and security
We don't think you should pay to bank. So we made sure to find banks with easy ways to waive the monthly fees. Many banks on our list don't even have a monthly service fee.
We also know that different businesses have different needs. We found banks with features good for retailers, online-only businesses, startups, and larger growing companies.
How to Choose the Right Bank for Your Business
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When choosing the best business bank account for your needs, think about what perks or features you'd like. Consider these things:
- Fees and account balance requirements
We have free accounts on our list. But many banks have a minimum balance requirement to waive the monthly service fee. Can your business comfortably meet that requirement? - Transaction limits
How many monthly transactions do you expect? Some accounts give you a certain number of free transactions per month. Beyond that, they charge a fee for each one.Transaction items include debits, credits, ACH bank transfer, and deposit checks. - Cash deposit
If your business takes in a lot of cash, look for an account with a higher amount of fee-free cash deposits. Also note that some online accounts don't allow for cash deposits. - Size of bank
Large national banks are more convenient. On the other hand, local banks or credit unions offer more personalized service. They may be able to get you a better deal on a loan or provide more aid if something happens.One of the best resources for entrepreneurs is the Small Business Development Center. This nonprofit organization can help you with marketing, business loans and more. - Accessibility
If you make a lot of deposits and withdrawals, a brick-and-mortar bank may be better for you. Check that your bank have branches and ATMs near you.If you're okay with purely online and mobile banking, then an online bank can help you save. You can bank from anywhere on your smartphone.
- Cash management
Does the account have features to help manage your cash? For example, Bank of America has built-in tools. Novo has Reserves for you to set aside funds for business savings goals.Read more about cash management solutions. - Software integration
See if the checking account integrates with accounting software like QuickBooks, Freshbooks, or Xero. This matters because it could make your life easier. - Small business loans
Even if you don't need a loan now, you may later. Having a personal relationship with your bank may help you obtain these resources or get a better interest rate.You may want to see if the bank provides SBA loans. These loans give financing opportunities to businesses that can't get a traditional bank loan. - Types of accounts
Do you want personal and business accounts under one roof? If so, look for bank that also offers personal checking and savings accounts, as well as business accounts. - Customer support
It's important to get help from a real person when you need it. Read other customers' bank reviews to get an idea of how responsive they are.
Why Have a Business Bank Account
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All businesses, no matter the size or field, should have separate personal and business banking accounts. Here are some good reasons why you should have a business bank account:
- Easier to calculate business expenses during tax time and leaves a clear trail for the IRS.
- Pay bills, purchase items, and pay employees and vendors from your business bank account.
- Look more professional when applying for business loans.
- Accept credit card payments from customers.
- Share employee and accountant access.
Do You Need a Business Checking Account and Business Savings Account?
Technically, small business owners only need a business checking account. But also having a business savings account can help you better organize your finances and even grow your funds.
Business checking accounts are for managing your day-to-day business transactions. You need it to receive deposits, make purchases, pay vendors, accept credit card payments, write checks, and other daily activities.
Business savings accounts are for storing money you don't immediately need. They're a good place to keep your business emergency fund, so you're prepared if something unexpected happens or if you have a slow season. They're also good for saving money for future business projects.
Plus, business savings accounts usually offer higher interest rates, so your money can grow a little instead of just idly sitting there.
Small Business Banking FAQ
Are small banks better for small businesses?
Small banks generally have less fees than the big banks. They may also be able to offer better loan terms. Plus, a small local bank is more likely to support local businesses. However, the trade-off is that they may not provide as many services.
Do I need a business bank account as a sole proprietor?
Sole proprietors aren't required to have a separate bank account. But it's still smart not to mix personal and business finances. Or else it'll be a big pain during tax time.
Do I need a business bank account as an LLC?
LLCs are legally required to have a separate bank account, because the owners and the LLC are separate entities. You're protected from personal liability if your business gets sued. So you need to maintain the separation with a dedicated business bank account.
What is the minimum amount to open a business account?
Each bank has their own requirements. But you can open a business checking account with $0. Some banks, like Bank of America, only requires $100 to open.
Are credit unions better for business banking?
A local credit union may have less fees and more personalized service. However, their services may be more limited than the big banks. Think about what you need (not only now but also down the road) to find what's best for you.
Can I open a business checking account with bad credit?
Yes you can. Some digital banks, like Novo, have no credit check. Or you can try to open an account with your local bank or credit union, as they may have more lax requirements.
Other Small Business Banking Topics You May Like
Here are some other small business topics you may find helpful:
Best Bank for Your LLC
LLCs may have different banking requirements than freelancers and sole proprietors. Here are some things to consider when choosing the best bank for your LLC.
- Location
Some traditional banks may require the owner(s) of LLCs to open a business checking account in person. Be sure to know your bank's requirements.A digital bank, like Novo, lets LLCs open an account online.
- A bank that can grow with you
You may outgrow an entry-level checking account. Does the bank offer higher tier business accounts with more transactions, features, or rewards? It can be a hassle to switch business accounts later. So keep the future in mind when choosing an account now. - Other services
As your LLC keeps growing, you'll probably need more services. Common things business owners need are loans, merchant services, and employee programs. If you'll need them, look for a bank that offers these business solutions. - Employee access and banking
Do you need to share access with an employee or accountant? Look for an account that allows for that. Or maybe you want the option of offering banking accounts to employees. Some banks, like Axos Workplace Banking, lets your employees open free checking accounts.
How to Build a Business Banking Relationship
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Building a strong banking relationship can go a long way in helping your business grow. A good relationship can help you obtain a line of credit, loan, or other services when you need it.
Here are some tips to building a good relationship.
- Get to know your banker, so they can see you as more than just an account number. This way, your banker is more likely to take more of an interest in your business's success. A banker is more likely to approve a loan to someone they trust.
- Share your business plan and your goals. The more your banker knows about your business, the more they can recommend products and services right for you.
- Be honest about your current situation. This includes both the good and bad. If you're facing some challenges, tell your banker. They can help you figure out options.
Unfortunately, online banks cannot provide the same type of personal relationship as a local branch. This is an important factor to consider if you're deciding between a traditional or online bank.
Managing Cash Flow for Small Businesses
Cash flow can really make or break a business. It's important to manage how much money is coming in and out. A big expense, delayed payments, or a slow season can all put you in the red.
All businesses experience up and down cash cycles. You should be able to turn to your bank for help if you find yourself struggling.
Here are some solutions to fix cash flow problems.
- Business credit card: This can be used as a quick fix when you just need some purchasing power. You can put some purchases on a credit card and pay it back next month. Just try to pay back the balance as soon as possible.
- Business line of credit: A line of credit usually has higher credit limits and lower interest rates. It's ideal for short-term operational needs, like purchasing inventory or paying staff. It can also be used during slow seasons to keep the business going.
It's smart to open a line of credit before you even need it. It'll be readily available when you do need funds. And if you don't use it, then you don't pay anything.
- Business loan/financing: A loan will provide you with a lump-sum of cash. There are different types of loans, such as long-term, short-term, equipment, or commercial mortgage loan. It's smart to finance large purchases so you free up working capital.
- Emergency fund: It's important to keep a financial cushion in a business savings account with interest. This cash reserve can help keep you afloat when times are bad.
How much cash reserves should a business have?
It is recommended for a business to keep 3-6 months of operating expenses on hand. Your expenses should include overhead, inventory costs, marketing, and employee wages.
The best thing you can do is prepare in advance. Use accounting software to stay on top of your finances and forecast your cash flow.
Using Business Credit Cards
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All small business owners should also consider getting a business credit card. If used smartly, they can be a great way to grow your business.
Here are some benefits of using a business credit card.
- Keep your business expenses separate from personal
- Increase your business purchasing power
- Easier to get a revolving line of credit than a loan
- Build business credit, which will be needed if you're applying for financing
- Earn rewards, like cash back or travel points
You don't have to get a business credit card from the same bank as your business checking. But it could make the approval easier. It could be more convenient to have banking and credit accounts under one roof.
Credit Card Processing
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Being able to accept credit cards is essential for all businesses. It allows you to cater to more customers. It's important to think about how you will be processing credit cards.
You have these options:
- Through your bank. Lots of banks offer merchant services. You may consider this option if you want to have everything under one roof. But the pricing is not always transparent. You'd have to go through an approval process, which may not be ideal for very small new businesses.
Chase Business Complete Banking offers a convenient solution. It's banking plus built-in processing with good rates.
- Sign up with a merchant account provider. There are lots of other merchant account providers, such as Payline Data and Payment Depot. The pricing is more competitive and transparent. But there's also an approval process, so it's better for more established businesses.
- Use a payment services provider. Third-party processors, such as Square and Stripe, don't require underwriting. You can sign up and start accepting card payments right now. This is the easiest and most affordable option for new and small businesses.
You don't have to get merchant services through your bank. It's important to compare pricing and features across all your options. See our list of the cheapest credit card processing companies.
What Experts Say
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As part of our series on small businesses, CreditDonkey assembled a team of industry experts to answer readers' most pressing questions. Here's what they said.
Bottom Line
Picking the best bank for your small business needs is important to your success and growth. You'll need it to manage your business finances. Plus, it'll help when applying for a business loan or other services.
The right bank can open more opportunities and help take your business to the next level.
Consider all your options to see what makes most sense for your small business banking needs. Pay attention to the fine print before signing up. If you're unhappy with your choice or your business needs change, you can switch to another bank, but it'll be a hassle.
Additional Resources
Business Checking Account Promotions
Chase Business Complete Banking℠ - $300 Bonus
- Earn $300 when you open a new Chase Business Complete Checking℠ account. For new Chase business checking customers with qualifying activities.
- Multiple ways to waive the Monthly Service Fee, including maintaining a minimum daily balance or purchases on your Chase Ink® Business credit card.
- Built-in card acceptance. Accept card payments anytime, anywhere in the U.S., and get transparent pricing with Chase QuickAccept℠.
- Same-day deposits with QuickAccept. Free up the cash you need to keep your business moving forward with same-day deposits at no additional cost.
- Alerts to help you stay on top of your account activity.
- Easy account management through Chase Business Online and the Chase Mobile® app.
- Unlimited electronic deposits, ACH and Chase QuickDeposit℠
- Convenient access to more than 16,000 ATMs and more than 4,700 branches.
Basic Business Checking - $200 Bonus
- New business owners get a $200 welcome bonus!
- Zero monthly maintenance fees
- Unlimited Transactions
- Unlimited domestic ATM fee reimbursements
- $0 Minimum Opening Deposit requirement
- 2 Free Domestic Wires, monthly
- Cash Deposit capability via MoneyPass and AllPoint networks
Business Interest Checking - 1.01% APY
- New business owners get a $200 welcome bonus!
- Earn up to 1.01% APY*
- $100 minimum opening deposit
- Pay no monthly maintenance fee with an average daily balance of at least $5,000
- Unlimited domestic ATM fee reimbursements
- Up to 100 free items per month, $0.50 per item thereafter (includes debits, credit, and deposited items)
- Up to 60 items per month for Remote Deposit Anywhere (includes monthly per item processing limitation)
Small Business Checking - $150 Cash Bonus
- Earn $150 when you open a Live Oak small business checking account between 2/15/2023 and 3/31/2023.
- Deposit at least $2,000 into your business checking account within 90 days of opening.
- Make at least 20 qualified transactions within 90 days of opening your account.
- Must be a first-time Live Oak small business checking customer to be eligible for this offer. See full terms and conditions
Business Checking Promotions for Alabama
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Additional Resources
References
- ^ Bluevine. Line of Credit, Retrieved 4/11/2022
- ^ Novo, Does Novo charge overdraft fees?, Retrieved 2/5/2022
- ^ Axos Bank, Business Interest Checking, Retrieved 2/5/2022
- ^ LendingClub Banking, Fees, Retrieved 2/5/2022
Write to Samantha Tatro at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
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