Updated June 21, 2022

Best Online Bank for Small Business

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Manage your business finances without running to a bank. An online bank can save you time and money. Here are the 10 best online banks for small businesses.

Many traditional banks just don't understand the needs of small business owners. They can be inflexible and have outrageous fees.

Online banks these days are so good that you don't even need to step into a branch. They often have lower fees, wider ATM networks, and innovative features to help you run your business.

Whether you have a physical store, eCommerce shop, tech startup, or a side hustle, here are the best online business banking solutions.

10 Best Online Banks for Small Business:

  1. Bluevine: Best overall
  2. Novo: For entrepreneurs who use a lot of business tools
  3. Kabbage: High interest rate
  4. NorthOne: Organizing your business budgets
  5. LendingClub: For cash back
  6. Lili: For freelancers and gig workers
  7. Chase: Small retailers take credit cards
  8. Axos: For small businesses with modest checking activity
  9. Grasshopper: For online small businesses
  10. Mercury: For tech startups

1. Bluevine

Best for: Most small businesses

Bluevine is one of the most popular online business checking accounts for the high interest rate and excellent features.

Despite being an online-only bank, Bluevine offers some traditional banking features. That makes it good for even small physical businesses who want better rewards than what your local bank offers.

Why we like Bluevine:
You can earn a high 1.5% APY on balances up to $100,000 for customers that meet monthly eligibility requirements. The requirements are very reasonable. All you have to do is:

  • Spend $500 a month with the debit card, OR
  • Receive $2,500 per month in customer payments

Bluevine gives you 2 free checkbooks every year. This is great if you pay employees or suppliers in person. And if you occasionally need to deposit cash, you can do so at 90,000+ Green Dot retailers.

Another exciting new feature is the 5 free subaccounts. Each one gets its own unique account number. This really gives you control over how each account is used. You can choose which accounts to pay / bill suppliers from.

And the best part is that all six accounts are eligible to earn interest (up to $100k on combined balances)!

Bluevine also offers lines of credit up to $250,000.[1] If you may need a small business loan in the future, it could help to already have a positive banking relationship.

Bluevine cons:
Bluevine has generally poor app ratings. That can be a problem if you usually bank on your phone. Depositing cash at Green Dot has a $4.95 fee.[2] That can add up if you deal a lot in cash.

2. Novo

Best for: Entrepreneurs who use a lot of business tools.

If you're like the typical modern business owner, you probably use at least a dozen different apps or software to run your business. It can be overwhelming.

Novo lets you manage your entire business life in one place. You can integrate your checking with thousands of business apps, like Shopify, Stripe, QuickBooks, Zapier, Slack, and more. No more chasing down different platforms.

Why we like Novo:
Novo offers exclusive savings from popular business services. For example, you can get $20,000 in fee-free card processing with Stripe, Google Cloud credits, Gusto discounts, and more.

Though Novo doesn't offer interest, these savings can be even more valuable if you use them.

You can create up to 5 Reserves. These are like savings accounts where you can set aside funds for things like taxes or upcoming business purchases.

Novo's highly-rated app also lets you send invoices and request for free unlimited checks to be mailed for you. Plus, the debit card has no foreign transaction fees.

Novo cons:
Novo doesn't have a way to accept cash deposits. It's designed for online businesses and freelancers. There's also no overdraft protection. Each overdraft will cost you $27.[3]

What is the easiest business bank account to open online?
Novo is our top choice for an easy online business banking account to open. It does not do a credit check, so you can get approved even if you have poorer (or no) credit. Plus, it accepts a wide range of business owners, including freelancers and gig workers.

3. Kabbage

Best for: High interest rate on checking

Want your money to work for you? Kabbage offers one of the highest interest rates currently on the market.

The difference from Bluevine is that you don't need to meet monthly activity requirements to earn the high APY. This may be better for new small businesses.

Why we like Kabbage:
Kabbage is a more basic business checking account. The biggest advantage is the high interest rate.

But it has some solid features like up to 5 Reserves and cash deposits at Green Dot (though fees apply).

Kabbage stands out for its other services. It also offers small business line of credit. Soon, it will have payment processing as well. With banking, lending, and processing, Kabbage could be a great choice if you're looking for multiple services under one roof.

Kabbage cons:
Currently, there are no integrations with third-party tools. And you will need to purchase paper checks.

Kabbage was acquired by American Express in 2020, so you know it has the backing of one of the biggest financial firms.

4. NorthOne

Best for: Organizing your business finances

NorthOne is the only bank on our list with a monthly fee that cannot be waived. But over 320,000 small business owners think it's worth it for the streamlined business banking experience it offers.

For a flat-rate $10 monthly fee, you get access to all features, including deposits, invoice maker, app integrations, and financial tools.

Why we like NorthOne:
The other banks give you only a certain number of subaccounts. But NorthOne lets you create unlimited "envelopes" for all your business savings goals.

You can create custom rules for each envelope. For example, you can specify 30% of every payment to automatically go into your taxes envelope.

Another cool feature is the free Invoice Maker. This lets you create and send professional invoices right from the app. You can also deposit cash at Green Dot locations.

NorthOne integrates with QuickBooks, Gusto, Shopify, Amazon, and PayPal, and many more apps. While it's not as extensive of a list as Novo, the most popular apps are covered.

NorthOne cons:
The $10 monthly fee cannot be waived. There is also no interest or other type of rewards to make up for it.

As of now, NorthOne only lets you have one debit card, so it's not ideal if you have multiple business owners. Another potential downside is that you cannot send or receive international wires,

The only fee you may encounter is a $15 fee to send or receive a wire transfer.[4] There is also a fee if you need to deposit cash at Green Dot. It's that simple.

5. LendingClub

Best for: Cash back rewards

LendingClub (previously Radius Bank) offers a great business checking account with excellent perks.

Why we like LendingClub:
You earn Unlimited 1% cashback on debit card purchases (for accounts with at least $500 balance). Plus, you'll even get up to 0.50% APY on your balance.

You can use any ATM you want. LendingClub gives unlimited ATM fee rebates worldwide. And you can deposit cash in a deposit-taking ATM in either the MoneyPass or Sum Network.

LendingClub is also known for its online lending programs. It offers a variety of SBA loans, equipment financing, and commercial real estate loans.[5] It's worth considering if you'll need a small business loan in the future.

LendingClub cons:
There's a monthly fee of Unlimited 1% cashback on debit card purchases (for accounts with at least $500 balance).[6]

You must have an online website or social media presence to apply for an account.

6. Lili

Best for: For freelancers and self-employed individuals

Though it's best to have a separate business bank account, that may not work for everyone. If you just run a simple freelancing gig, it may even be a hassle to maintain a different business account.

If that's your case, Lili may be right up your alley. It's a mixed-use personal and business checking account created just for freelancers, gig workers, and others in self-employment.

Sole proprietors and freelancers are not legally required to have a separate business checking account. So if it's easier for you to use one account for business and personal, that's completely fine.

Why we like Lili Bank:
Taxes are always a pain, but Lili offers good features to help make them easier for self-employed individuals.

It lets you easily sort your transactions as personal or business via Tinder-like swiping. This keeps your business expenses separate so you don't miss any deductions.

It also has a Tax Bucket, where you can automatically set aside a percentage of income for your quarterly taxes.

Another awesome perk is that you can get your direct deposit payments up to 2 days earlier. Whether you sell on Etsy or Shopify, drive Uber, or directly work with clients, you can qualify for early pay.

There's also a Lili Pro account for $4.99 per month.[7] You get a debit card with cashback rewards, savings account with interest, unlimited invoices, and fee-free overdraft up to $200.

Lili Bank cons:
Some of the better features (like invoicing and interest on savings) are only available with Lili Pro. But this account has an un-waivable monthly fee.

And note that Lili is only for sole proprietors, so it doesn't accept applications with EIN.

7. Chase

Best for: Small retailers that also need credit card processing

Okay, Chase isn't exactly an online bank. But anyone can apply for an account online and then manage it from the web or mobile app. And you may like knowing there are physical branches too if you ever need one.

Chase Business Complete Banking is a unique business checking account with payment processing built in. It's a great choice for mobile businesses, small retailers and food services.

Chase also has frequent welcome offers for new customers. Check out the current offer below!

Why we like Chase Bank :
You get credit card processing along with your business checking. You don't need to open a separate merchant account. It comes with a QuickAccept mobile reader that lets you take cards anywhere.

The best part is that payments with QuickAccept get deposited into your checking account in the same day. No more waiting 2 days for funds to clear. This really helps to keep cash flow moving for a small business.

Being a traditional bank, Chase also offers more business services than purely online-only banks. It's good if you want a full-service bank that can grow with you.

Chase Bank cons:
There is a minimum balance or other requirements to waive the monthly fee. It also has many other banking fees like overdrafts and wires.

You can waive the $15 monthly service fee with one of the following:[8]
  • Maintaining $2,000 minimum daily balance, OR
  • Making $2,000 in purchases on a Chase Ink Business card, OR
  • Receiving $2,000 in deposits from QuickAccept and/or other eligible Chase Merchant Services transactions

8. Axos Bank

Best for: For small businesses with modest checking activity

Axos Bank (previously Bank of Internet USA) is another popular digital bank. It offers a couple of different business checking accounts.

Axos Bank pros:
The Axos Basic Business Checking account waives a lot of typical banking fees. Besides no monthly fees, you also get unlimited transactions, first set of 50 checks free, and two reimbursed domestic wire fees per month.

Axos also reimburses unlimited domestic ATM fees. You can deposit cash for free via MoneyPass and AllPoint networks.

Or you can pick the Small Business Interest Checking account, which pays a very competitive APY. But this account has a minimum balance requirement to waive the monthly fee.

Axos Bank cons:
You only get 60 free remote deposit items per month. Axos is not ideal for businesses that get lots of checks.

9. Grasshopper Small Business Banking

Best for: small online businesses

Grasshopper is a digital bank geared towards small businesses in the innovation economy.

It has no monthly fee or balance requirements. You get unlimited transactions, mobile deposits, and custom digital invoices.

Grasshopper pros:
If you maintain at least $10,000 in your account, you get more benefits. You'll get unlimited 1% cashback on debit card purchases in-person and online. Plus, you earn 0.35% APY on balances $10,000 and more (0.05% APY on balances below $10k).

Your account comes with cash management tools to help you keep track of payments. Plus, all users get Autobooks for free to automate your bookkeeping. Or you can integrate with accounting software you already use.

Even though it's online-only, Grasshopper really prioritizes community and customer service. If you have banking problems or need a loan, you can get personalized guidance from real humans.

Grasshopper cons:
The best benefits (cashback and interest) are only available if you have $10,000 balance. Grasshopper also doesn't offer an easy way to deposit cash, as it's meant for online businesses.

10. Mercury Banking for Start-ups

Best for: Tech startups; startups looking for funding

Mercury offers a banking account specifically for tech startups. Your account comes with a checking & savings account, debit card, check payments, wire transfers, and financial tools.

What really sets Mercury apart is their funding program that connects startups to top investors. We'll talk more about it in a bit.

Why we like Mercury:
Mercury has almost zero banking fees. There are no monthly fees, minimums, wire fees, overdraft fees, or out-of-network ATM fees. The only thing they charge is a 1% currency exchange fee.[9]

You also get free read and write API access. This lets you build a custom banking experience to fit whatever your business needs. You can create custom dashboards, sweep rules, automate mass payments, and more.

Mercury's Raise program can be invaluable to small startups that need some capital to get going. Mercury hosts a quarterly fundraising round where you have the opportunity to get your startup in front of 500+ investors.[10] Plus, you can get in-person mentoring from top investors and experts.

Since fall 2020, this program has already helped over 270 startups and made over 1,500 introductions.

Mercury cons:
Mercury is not open to sole proprietors. You need to be a US-based company and have an EIN to apply.

Before you decide online banking is the way to go, consider these pros and cons:

Pros:

  • Higher interest rates in comparison to traditional banks
  • Lower fees since online banks have less overhead
  • Easy to open an account
  • They often have national ATM networks. You're not contained to just a certain region.
  • Typically good customer service to make up for lack of branches

Cons:

  • Difficult to deposit cash
  • No personal relationship with a banker
  • No branches to do in-person banking or ask for help
  • Disruptions when the site is down or when you don't have internet

How to Choose the Best Online Bank for Your Business

Since you can't bank in person, it's important that the online bank meets your needs.

Monthly fees
Many online banks offer business accounts with no monthly fees. This is great if you don't want to worry about maintaining a minimum balance.

But some banks may have a minimum balance requirement in exchange for interest or some other rewards. You can decide what makes sense for your business situation.

Interest / rewards
A lot of online banks offer higher interest rate, cashback, or some other rewards. A high APY is good if you usually keep a larger balance, while cashback is good if you spend a lot on your business debit card.

Customer support
With no physical branches, you can only rely on virtual help if you have a problem. Does the bank offer phone, live chat, or email support? What are the hours? Read some reviews to see what other customers say.

ATM network
Online banks usually have a large fee-free ATM network. If you do sometimes withdraw cash for your business, make sure there are convenient ATMs near where you work or live.

Mobile app
Small business owners often bank on the go. You need a good mobile app that lets you run your business from anywhere. Read up on the app reviews and see what current users are saying.

Software integration
If you use Quickbooks or other business software, see if it can be integrated with the checking account. This could make your life a lot easier.

Range of financial products
Would you need a small business loan or credit card processing later on? If you do, it could be more convenient to get services with the same bank. Consider what other services the bank offers.

FDIC Insurance
It's important that the bank is insured by FDIC. This ensures that your money is protected if the bank fails (up to $250,000). If you're not sure, you can look up the bank on FDIC's website.

How Do I Deposit Cash at an Online Bank?

Not all online banks allow for cash deposits. If this is something your business needs, first make sure the bank you choose lets you. Here are some ways you can deposit cash:

  • Via Green Dot:
    Some banking platforms (like Bluevine, Kabbage, and NorthOne) are partnered with Green Dot. You can deposit cash at any of the 90,000+ locations.

    Green Dot is at popular places like 7-Eleven, CVS, Walgreens, etc. Just ask the cashier to load the money onto your debit card. But the downside is that Green Dot has a $4.95 fee[11] and a deposit limit.

  • Cash-taking ATMs:
    Many online banks are part of the Allpoint or MoneyPass ATM networks. Some of these machines accept cash deposits surcharge-free. Banks like Axos and LendingClub let you do this.

    However, only limited Allpoint or MoneyPass machines can take cash. And the bank has to allow for it as well.

  • Money order:
    The last way is to convert the cash to a money order payable to yourself. This can be done at local retailers. Then just use the mobile check deposit feature to deposit the check.

Depositing cash is one of the downsides of online business banking. If you deal a LOT in cash, then you may find a local bank is more convenient.

Do Online Banks Have Business Checks?

Many online banks do have check writing. But they usually don't offer free business checks. However, there are some online business banks that do:

  • Bluevine gives you 2 free checkbooks every year. This is undoubtedly the best option if you write a lot of checks.

  • Axos gives you the first set of 50 checks free

  • Novo doesn't give you checks, but it sends paper checks on your behalf for free. Just request it through the app.

How to Open an Online Business Account

All the online business banking accounts on our list are super easy to open. You can open an account in as little as 3 minutes.

Generally, you just need to have a small business, be at least 18 years old, and be a U.S. citizen or permanent resident.

You will need to provide the following information:

  • Name, address, and date of birth
  • Driver's license or state ID
  • SSN or EIN
  • Business license (if your state requires)
  • Company name (if applicable)
  • Industry
  • Years in business
  • Approximate annual revenue
  • Proof of address

Depending on your business structure, you may need to upload these supporting documents:

  • Sole proprietors: DBA certificate
  • LLC: LLC agreement and Articles of Organization
  • Partnerships: Partnership Agreement and Certificate of Partnership
  • Corporations: Corporate Bylaws and Articles of Incorporation

Usually, online banks have a fast approval process. You can be approved in just minutes if everything is in order. Sometimes, the bank may ask for additional verification or information.

Methodology

We came up with this list of the best online banks for small businesses by looking at several factors:

  • Low fees
  • Platform / app features
  • Customer service
  • Other services
  • Security

First, we don't think you should have to pay to bank. So we made sure the banks have reasonable fees and minimum balance requirements (if any at all). Most of the banks above don't have any monthly fees.

We know that businesses have different needs. We found online banks with unique features good for different types of businesses, including retailers, online shops, freelancers, and tech startups.

Finally, all the banks on our list are FDIC insured. They all use high level encryption to keep your data and banking activities safe.

Bottom Line

These days, online business banks offer much better value than their physical counterparts.

Not only do online banks have fewer fees and requirements, they also have innovative technology to streamline your business finances. Finding the right account can make your life so much easier, giving you more time for your business.

References

  1. ^ BlueVine. Line of Credit, Retrieved 6/3/2022
  2. ^ BlueVine. How do I use Green Dot services to make a cash deposit?, Retrieved 6/3/2022
  3. ^ Novo. Does Novo offer overdraft protection?, Retrieved 3/4/2022
  4. ^ NorthOne. Pricing, Retrieved 3/4/2022
  5. ^ LendingClub Bank. Business Lending, Retrieved 5/30/2022
  6. ^ LendingClub Bank. Fees, Retrieved 7/13/2022
  7. ^ Lili. What is the monthly fee for Lili Pro?, Retrieved 3/4/2022
  8. ^ Chase. Additional Banking Services and Fees for Business Accounts, Retrieved 6/3/2022
  9. ^ Mercury. Pricing, Retrieved 6/3/2022
  10. ^ Mercury. Raise Seed, Retrieved 3/4/2022
  11. ^ Green Dot Bank. How much does it cost to add cash at the register of a retail store?, Retrieved 5/31/2022

Anna G is a contributing writer at CreditDonkey, a credit card comparison and reviews website. Write to Anna G 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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