If you own or are thinking about starting a small business, you absolutely need to have a small business checking account. If you don’t, you could be putting yourself and your business at risk.
When running a small business, you will have a lot of different things to worry about than you would as an individual using a personal checking account. First, you have to ensure your business finances are separate from your personal finances. If they’re not, it could open up risk in many ways-including liability for business debts and lawsuits, or issues when you go to file your taxes.
In this article I’ll share our picks for the best business checking accounts, as well as some key factors to consider before opening one.
Let’s get started.
The best business checking accounts
Capital One Spark Business Checking
This is one of our favorite accounts for a few reasons. First, the Capital One Spark Business Checking
- No monthly maintenance fees or any monthly transaction fees
- No transaction limits, which is a big bonus for those who do a lot of business.
- No minimum balance required.
There are very few Capital One branches and ATMs in the US compared to other banks, and the branches that do exist don’t service the Spark Business Checking account, so this account is ideal for those who don’t need much face-to-face time with their bankers.
You can deposit checks one of two ways:
- At a Capital One ATM
- Via the Spark Business app on your smartphone by taking a picture of the check
If you need to deposit cash, you’ll normally have to find a workaround, as you can only deposit cash via a Capital One ATM. One solution would just be to keep the cash and write your business a personal check-just be sure to keep track of those transactions for your records.
Cash withdrawals, on the other hand, are easy. You’ll get a debit card from Capital One to use for purchases and withdrawals. And while Capital One has few branches, they’re part of the Allpoint network, which has about 38,000 ATMs in the US.
BBVA Compass ClearConnect for Business
- No monthly maintenance fee and no minimum balance requirements
- $100 minimum to open the account
- You can process up to five processed checks and/or 5 withdrawals, or any combination of the two (up to five), before getting charged a fee
- All other transactions free and unlimited
- No fees for using a BBVA Compass or Allpoint ATM, and no fees from BBVA for withdrawals on ATMs outside those networks
The BBVA Compass ClearConnect for Business account is excellent for those who live near a BBVA Compass branch. While they do offer online solutions for your banking, you can also walk into the branch for some face-to-face interaction.
This account is probably most helpful if you run a business that processes a lot of cash, or if you are looking to expand your line of business products and would like to speak in person with someone about those options. Just be aware that you’re limited to two in-branch deposits per month before you get charged a fee.
Citizens Bank Clearly Better Business Checking
- No monthly maintenance fee
- No minimum balance requirement
- 200 transactions every month for no cost
Citizens has 1,100 branches in the country, so if you’re near one you can go in and do your business banking face to face. If not, they have over over 3,100 ATMs and a mobile banking app to conduct your business electronically.
One really cool feature of the Citizens Bank Clearly Better Business Checking is the ability to grant someone else, such as your accountant or bookkeeper, controlled access to your account so you don’t have to bother with it.
The only major downside to this account is the lack of earned interest, but most business checking accounts don’t give you that anyway.
US Bank Silver Business
- No monthly maintenance fees
- 150 free transactions each month
- 3,000+ branches across the eastern half of the United States
The US Bank Silver Business checking account is another great option for those with newer businesses and a relatively lower transaction count each month.
What sets US Bank Silver Business apart is that it gives you 25 free cash deposit units per month.
That’s right, units.
Once you read the fine print from US Bank, they tell you that a unit is whatever cash dollar amount you deposit, divided by 100, then rounded to a whole number. Here’s what I mean…
Say you deposit $225. You’d divide that by 100:
225 / 100=2.25
Then you’d round that to the nearest whole number (in this case 2). So by depositing $225, you use up 2 of your 25 free cash deposit units. Pretty unique if you ask me (and confusing). Once you pass the limit, you’ll be charged a small fee for every additional unit you use.
US Bank offers some extras, too:
- A free card reader
- Viewpost Digital Invoicing
- A $200 credit on payroll services
You just have to meet certain requirements to get them. This is a good account for those who don’t do a ton of business, want a familiar bank, and like the option of going into a branch to do business.
Bank of Internet Federal Bank Basic Business
- $1,000 minimum opening deposit
- 200 free transactions per month, with each additional transaction costing 30 cents.
- 60 free deposits per month when using the remote deposit feature
- No monthly maintenance fee
If you’re okay with an online-exclusive bank (meaning no physical footprint at all), then the Bank of Internet Federal Bank Basic Business account might be the option for you.
If you decide to take cash out, they offer a surcharge-free ATM network across the country. You still may be subject to a specific ATMs fees, though, but BofI itself will not charge you.
Depositing cash is a different story-you can’t. Since they’re online only, you’ll have to write yourself a check to make a deposit. As always, keep track of these workaround transactions.
If you end up liking this bank, they offer two more upgraded options for business checking as your business grows, which come with more features for those who make more transactions and move more money.
This is a great starter option for those who don’t mind banking online only.
This is not an exhaustive list. Larger banks like Bank of America, Wells Fargo, and Chase offer excellent options for business checking. Many of them, however, require larger balances and have a fee structure that rewards more established businesses, which is why we narrowed our picks down to these five.
Key factors to consider with a business checking account
Before running out and signing up for a business checking account, you need to understand a few key things. First, when you see an advertisement for a “free” business checking account, know that it’s not entirely “free.”
In order for these banks to stay in business, they have to make money off of you somehow, right? So what you’ll normally see with business checking accounts are two things:
- You probably won’t earn interest on your balance
- Slightly hidden fees
Banks will typically not pay you interest, but they’ll earn some kind of interest off your money-that’s just how banking works.
With regard to fees, make sure you read every fine detail before signing up so you know exactly what fees you’ll be charged and how you can reduce them or avoid them altogether.
With a business checking account, most banks will put a limit on the number of transactions you make every month. Seems kind of backwards, doesn’t it? With a personal checking account, you’re often encouraged to make more transactions, not less.
Limits placed on business checking account transactions also don’t apply to just debit card charges. It usually includes things like deposits (both check and cash), withdrawals, checks written, and payments you make electronically.
Most banks will put a limit of up to 500 transactions, depending on the bank. Some can be as low as 200. On average, though, you typically won’t see a limit below 100 transactions per month. Expect the fees to be as high as 50 cents per transaction over the stated limit.
That’s like a 25 percent surcharge on a $2.50 coffee.
Balance and deposit requirements
Some banks will charge you a fee if your business checking account’s balance falls below a certain threshold. It’s calculated on an average, by day, so as long as you’re maintaining a certain level of money in the account you should be fine.
A bank may also require your initial deposit to be a certain amount. If you don’t have that on hand, it may disqualify your from opening the account at all.
On the flip side, some banks will actually reward you for having a high balance, much like they do with a personal checking or savings account (typically a higher interest rate). With checking accounts, you may get a higher interest rate or even a reduction (or elimination) of some of these other silly fees by carrying a large balance.
If you don’t see anything in the fine print about high-balance bonuses, then contact a service representative to see if they’re willing to give you a break if you agree to keep your balances above a certain amount.
Ah, the good old monthly maintenance fee. Usually banks will require this if you or the product you chose aren’t very profitable for them. An example might be if you don’t bank very often-they may not be able to collect transaction fees from you, so they make it up with a fee.
This type of fee doesn’t exist with every business checking account, but the ones who do charge it vary pretty widely in the cost. On average, it’s usually under $10, but in some cases it can be as high as $50.
Make sure you check to see if there’s a monthly maintenance fee before signing up. If there is, ask to have it waived. If they won’t waive it, I would urge you to look for another account elsewhere.
Bank location and size
You don’t tend to see a lot of online-only business checking accounts. This is for a good reason. Banks want to develop a relationship with their business-owner account holders. Once they have a good relationship with you, they can offer other products, like small business loans, business credit cards, and other premium products.
This is an important factor for you to consider as well. If you don’t want to deal with someone face-to-face, you may be better off finding an online-only bank. But if you would prefer the personal touch of a small business specialist, then ensuring your bank has a physical branch close to you is critical.
This may also mean having a nearby ATM for you to take out cash. If you choose an online-only bank, your options to get cash out may be limited (unless you want to pay a higher fee).
The other thing to think about is how large the bank is. Are you choosing a small, possibly less-credible bank because of their better offer? If so, it’s okay, but be prepared for more limited options and slightly reduced service.
It shouldn’t matter if you’re an established business or a brand new blog. If you have a business, you should have a business checking account. Every business is going to have different needs, to just be sure to do your research before signing up for an account. Otherwise you may end up with something that doesn’t suit your business model.