Best Banks for Startups
Just started a business? You'll need a simple banking solution to help your business grow. Find out the best banks for your startup.
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Choosing the right bank can be challenging for a startup.
You want a bank with few fees and requirements to keep costs down so you can also focus on what matters: growing your business.
Luckily, there are banks that offer specialized features for startups. Read on to find out which banking solution fits your needs.
Here are the top banks for new small businesses:
Lili: Best for New Single-Person Businesses
If you're starting a business as a freelancer, sole proprietor, or even a single-person LLC, Lili is the easiest to start with.
First, you can sign up in just minutes with no credit check. And there's no minimum deposit or a minimum balance.
The free Lili Basic account will meet your basic business banking needs, such as managing transactions, connecting to digital tools, and even an Emergency Bucket.
Free Checking Account for Sole Proprietors and Single-Member LLC
- Minimum Deposit to Open: $0
- Balance Requirement: $0
- Monthly Fee: $0
- APY: N/A
- ATMs: 38,000+ MoneyPass ATMs
- Perks: Get direct deposits up to 2 days earlier
Lili unique benefits:
What's really cool about Lili is that if you upgrade to a paid plan, it can be used as a mixed personal and business account. This is convenient for new business owners because you don't need to manage 2 separate accounts.
You can categorize your expenses as personal or business. You can use Bill Pay to pay your vendors faster and optimize your cash flow. This keeps your finances organized even within one account.
Plus, the app keeps track of business tax write-offs for you, so you can maximize your tax savings.
What's more: it'll also automatically save a portion of your earnings into a Tax Bucket. This way, you'll be ready for those quarterly tax payments. No scrambling to find the funds.
Lili pros & cons:
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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
- Automatic Savings
- Get paid up to 2 days early
Lili is best for simple, online businesses. If you're starting a local business, it's probably best to go with a brick-and-mortar bank, like Chase below.
Chase: Best for Local Businesses
Chase offers one of the best business bank accounts for small business owners. Especially if you plan to take credit card payments from customers (which is pretty much essential nowadays!).
Plus, being a large traditional bank, it has lots of branches and ATMs for in-person banking. And you'll get traditional banking features like paper checks and cash deposits.
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 $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.
- Helping you save money. Multiple ways to waive $15 service fee and unlimited digital transactions helps you keep more of your money.
- Full-featured banking online and on-the-go. Manage your business' finances on your terms with the latest online and mobile banking technology.
- Trusted and secure financial partner. We're committed to helping you grow and protect your business.
Chase unique benefits:
What makes Chase unique is its Chase Business Complete Banking account with payment processing integrated into the checking account.
Usually, you need to open a merchant services account to process credit card payments. But Chase has it built in, so you don't need a separate merchant account. You can just handle it all through one Chase app.
With Chase QuickAccept, all you need to do is use the mobile card reader to accept payments or type in the transaction details on the app. And you can get the funds from sales deposited directly into your business checking account the same day.
Getting funds quickly keeps your cash flow moving, so you can pay bills and make purchases without holdups.
Chase pros & cons:
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- Personal information (name, address, contact details)
- SSN or Employer identification number (EIN)
- Driver's license or state ID
- Business license (if your state requires)
- Assumed Name Certificate if operating as a DBA
- Articles of Organization (for LLCs)
- Articles of Incorporation (for Corporations)
- Partnership or Joint Venture Agreement (for Partnerships)
Relay: Best For Startups With Bigger Teams
If your startup is growing and it's getting complicated to handle all business finances in only one account, Relay's got you covered.
With Relay, you can open up to 20 individual checking accounts for your business, each with its own unique account number. Plus, you're allowed to issue up to 50 debit cards.
The basic Relay account has no monthly fee, no minimum opening deposit, and no overdraft fees.
No-Fee Business Checking
- Minimum Deposit to Open: $0
- Balance Requirement: $0
- Monthly Fee: $0
- APY: Earn up to 3% APY: Earn 1% APY on savings balances of less than $50,000, 1.5% APY on savings between $50,000 and $250,000, 2% APY on savings balances between $250,000 and $1,000,000 and 3% APY on savings balances of more than $1,000,000.
- ATMs: 55,000+ Allpoint ATMs
- Perks: Up to 20 accounts, 50 debit cards, and free checks
Relay unique benefits:
Having so many checking accounts really lets you customize how you manage your funds.
This means you can divide your payroll, taxes, supplies, marketing, and other startup costs into separate accounts, making it super easy to track your funds and stay organized.
And with up to 50 debit cards, you can assign different uses for each card depending on your needs (for example, a card just for business meals).
You can also give access to your team members to different accounts. There are plenty of permissions settings to make sure everyone has the right level of access.
Relay pros & cons:
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Relay integrates with some accounting software, but it's limited. If you want a fully-integrated business banking account, the next one can't be beat.
Novo: Best for Digital Tools
Use a lot of business software? It can be overwhelming to keep up with each one. If so, Novo Business Banking may be the perfect solution you didn't even know you were looking for.
You can integrate your account with all the business software you use. This way, you get a personalized, centralized dashboard with all the apps you need in one place. No more juggling a ton of different platforms.
Accounts are free to open, with no minimum balance required.
Free Business Checking
- Minimum Deposit to Open: $50
- Balance Requirement: $0
- Monthly Fee: $0
- APY: N/A
- ATMs: Up to $7 per month ATM fee reimbursement worldwide
- Perks: Thousands of dollars in exclusive perks from popular business services
Novo unique benefits:
Novo has dozens of app integrations for business tools like Quickbooks, Gusto, Stripe, Amazon, Zapier, Wise, and more. On top of that, you can connect thousands more with your account.
It also has a neat budgeting feature called Novo Reserves.[2] Think of it as digital cash envelopes you can save money in and dip into when you need it. This lets you budget for different things like utilities, taxes, miscellaneous costs, etc.
You don't have to worry about invoices either. You can create and send unlimited invoices for free. The app lets you customize your invoices, create recurring invoices, edit, cancel, and more.
Another benefit is that Novo refunds up to $7 per month ATM fees at the end of each month. This is helpful if you need to withdraw cash.
Novo pros & cons:
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Mercury: Best for Tech Startups
Mercury is a fintech company offering banking services specifically geared towards tech startups.
Its business checking account is as close to free as you can get. There's no monthly fee, overdraft fees, wire transfer fees, or ATM fees. The only fee is a 1% currency exchange fee.[3]
But what really sets Mercury apart is their funding program. We'll get into that in a bit.
Banking for Startups
- Minimum Deposit to Open: $0
- Balance Requirement: $0
- Monthly Fee: $0
- APY: N/A
- ATMs: 55,000+ Allpoint ATMs
Mercury unique benefits:
Mercury's personalized support is perfect for startups. They have a team of dedicated experts who'll provide 1:1 support.
What makes Mercury truly unique is their fundraising program, called Mercury Raise.[4] It connects startups at every stage to investors from various industries. Entrepreneurs can not only build their network, but also raise funds for their capital.
Since fall 2020, Mercury Raise has helped over 630+ startups raise $1.7 billion in funding.
You also get read-and-write API access, so you can build your own custom banking experience.
Mercury pros & cons:
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How To Choose The Best Bank For Startups
Here are the factors you should consider when choosing a bank for your startup:
- Monthly fees
Some banks offer a free business checking account, and some require a minimum balance requirement in order to waive monthly fees. Make sure you understand the terms and that you're able to meet the requirements. - Startup-friendly services
Banks for startups often have features that cater more toward the modern entrepreneur, such as integrations, API access, tax tools, and even funding assistance. Look for an account with the features you need. - Software integration
If you use software like Quickbooks, Gusto, Stripe (and others), look for an account that lets you integrate with the apps you use.This actually matters a lot, because it could make your life much easier. It also helps you save on costs you spend on manual tasks.
- Security
It's important to look into security features, especially when you open an online business account. Make sure they're FDIC-insured or partners with FDIC member banks. It's crucial that your funds are protected.
Methodology
We understand that it's best to keep costs down when starting a business. So we looked for banks that offer free business checking accounts (or with very reasonable ways to avoid monthly fees).
We also looked into digital tools that help with the usual challenges of startup owners. For example, a small business owner might find accounting daunting. There are available business tools that can assist them with that.
Then we highlighted standout features for each bank and weighed their pros and cons. This way, you can compare and figure out what suits your business most.
Lastly, all the accounts on our list have FDIC insurance to give you peace of mind that your business funds are safe.
What the Experts Say
CreditDonkey asked a panel of industry experts to answer readers' most pressing questions. Here's what they said:
Bottom Line
Your bank can impact your startup's growth more than you think. It's not just a place to hold your money. The right bank will also offer the right tools and services to help manage and grow your business.
Ultimately, it all boils down to which bank offers services that are tailor-fit to your business needs. So it's important to identify what your needs are and have that in mind when choosing your bank.
References
- ^ Lili. How do I deposit cash into my Lili account?, Retrieved 8/24/23
- ^ Novo. What are Novo Reserves?, Retrieved 8/24/23
- ^ Mercury. Pricing, Retrieved 8/24/23
- ^ Mercury Raise , Retrieved 8/24/23
- ^ Mercury Vault, Retrieved 8/24/23
Write to Rio Ishihara at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.
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