Best Business Checking Accounts for Contractors of 2022

Katie Stiner

As an independent contractor, a business checking account can help simplify your finances, keeping your business and personal assets separate. Plus, many have low fees and provide budgeting tools that can help you keep track of cash flow and expenses. We reviewed the top options based on their features, fees, and overall quality.

Seamless integration with a wide range of business tools

$0

Monthly Fee

0%

Est. APY

Overview

Novo allows easy integration with third-party accounting software, including Quickbooks and Xero. You can also link your Novo debit card to your Google Pay or Apple Pay Wallet. Novo also syncs with your Stripe processing account and easily integrates with Slack to get automated updates on your bank account.

If you are looking for a business checking account that is easy to use and with almost no fees, you might want to consider Novo. The bank account is also accessible in the app store for both iOS and Android devices.

What we like

  • Free ACH transfers, mailed checks, and incoming wires
  • Minimal fees and ATM reimbursements
  • Backed by FDIC insured
  • Integration with other apps
  • Doesn’t check your credit score

What we don't

  • No APY earned on your balance
  • No cash deposit
  • No outgoing wires or checkbooks

Free unlimited transactions and invoicing software

$10

Monthly Fee

0%

Est. APY

Overview

NorthOne helps you manage your finances with its invoicing app, budgeting tool by creating an unlimited number of sub-accounts with the envelope functionality, and integrating with a suite of business tools and software.

What we like

  • Budgeting tool to help manage your finances
  • Smart integrations with business tools
  • Send invoices from the app
  • Low minimum deposit
  • No hidden fees
  • Unlimited transactions with no fee

What we don't

  • $10 monthly fee
  • No in persona customer support

Built for solopreneurs to optimize taxes and finances

$0 - $4.99

Monthly Fee

0% - 1.00%

Est. APY

Overview

Lili’s business checking account was built for freelancers, sole proprietors, and single member LLC with or without a DBA. The account comes with features that help users keep their banking costs low, optimize their taxes, and manage their business’s finances.

What we like

  • FDIC insured, up to $250,000
  • Optimize taxes to pay less
  • Invoicing software included
  • No maintenance fees
  • Automatic transfers to emergency account

What we don't

  • Only for solopreneurs
  • No wire transfers
  • Interest on lili pro only

Earn a competitive rate on your balance

$0 - $10

Monthly Fee

0.81%

Est. APY

Overview

Axos Bank business interest checking account earns a competitive rate for cash held within the account, and you'll get your $10 monthly fee waived by holding a minimum balance of $5,000. If you keep a decent amount of cash in your account, this could be an ideal account.

What we like

  • Earns a competitive interest rate
  • Unlimited domestic ATM reimbursements
  • 50 free checks when opening an account
  • Low minimum deposit to open account
  • Complete digital experience

What we don't

  • Monthly $10 maintenance fee
  • Limited integration with business tools
  • Limited fee-free transactions per month

Process payments on mobile device and receive same day deposits

$0 - $10

Monthly Fee

0%

Est. APY

Overview

Chase Business Complete Checking comes with Chase QuickAccept which allows card payments to be processed on your mobile device, so you receive deposits the same day to help manage cash flow within your business.

What we like

  • In person customer support (except Alaska & Hawaii)
  • Process payments on your mobile device
  • No fee for electronic depositst
  • $15 monthly fee wavied with $2,000 min. balance
  • No minimum deposit to open account

What we don't

  • Limited fee free paper check transactions
  • Outgoing wire transfer fee of $15 - $50

Business banking that streamlines bookkeeping

$0

Monthly Fee

0%

Est. APY

Overview

Relay offers a simple two-tier pricing plan. You can get started with no monthly fees and no account minimums. When you upgrade to the Pro plan, you’ll benefit from additional features such as free domestic and international wire transfers, or the ability to auto-import bills from QuickBooks and Xero.

What we like

  • Streamlines bookkeeping
  • No monthly fees
  • No minimum balance requirement
  • Seamless software connections
  • Set spending limits for employees

What we don't

  • No sign-up bonus or rewards
  • No physical branches
  • No interest earned on balances

What is a business checking account for contractors?

Mixing personal and business finances can lead to tax reporting issues. A business checking account for contractors can provide a distinction between personal and business finances in the event of a dispute. 

With a business checking account, you can accept credit or debit payments via a payment processor, and receive cash or check payments.

Who needs a business checking account for contractors?

If you are self-employed, a freelancer, or an independent contractor, you should consider opening a business checking account. Types of contractors include (but are not limited to):

  • Doctors
  • Dentists
  • Accountants
  • Lawyers
  • Construction
  • Marketing
  • Carpenters
  • Painters
  • Landscapers
  • General

What are the pros and cons of a business checking account for contractors?

There are many pros and cons of opening a business checking account for contractors. Here are a few for you to consider before applying:

Pros

  • Separation of finances: The most important reason why contractors should get a business checking account is to separate personal and business finances, making bookkeeping easier.
  • Credit history: Opening a business checking account can build a credit profile that allows you to access additional financial products. 
  • Professionalism: Customers can pay your business bank account instead of a personal bank account which can help build trust and credibility. 
  • Risk of closure: If a bank finds out that you are using a personal checking account as a business account, they may close the account.

Cons

  • Fees: Business checking accounts carry fees and transaction limits that can take a hit on your profits, especially if you are at the early stages of your business. 
  • Minimum balance: If your business checking account has a minimum balance, you could be charged a fee if your balance falls below the requirement.
  • Interest rate: Many business checking accounts offer poor interest rates on minimum balances.

What are the fees for a business checking account for contractors?

When researching business checking accounts for independent contractors, it’s important to consider the fees imposed and how they might affect you. Here are a few fees for you to consider when looking into an account for your business:

  • Monthly maintenance fee: On average you can expect to pay $10 – $15 for a business checking account. However, many online banks waive the fee.
  • Transaction fees: Look out for transaction limits and fees that could apply. Small fees can add up quickly and eat into your profits, especially during the start of your business. 
  • Transfer fees: There may be fees for ACH and wire transfers. Typically, international transfers have the highest fees. 
  • Overdraft and insufficient fund fees: If your available balance becomes negative, you may have to pay charges. Some banks may charge more than one overdraft fee per day and charge interest on negative balances. 
  • ATM fees: Depending on the bank you choose, there could be ATM fees. Look out for banks that will reimburse out-of-network ATM fees.  
  • Cash handling fees: If you exceed your cash deposit limit, which is the maximum amount of cash you can deposit during a billing cycle, there may be a cash handling fee applied for further deposits.

When starting your small business, a fee-free business checking account could be a priority. However, it’s a good idea to consider banks that offer other services such as accounting integrations, business loan products, or lines of credit. 

Many banks will offer a lower interest rate for existing customers and additional features such as online bill pay or invoicing which can help streamline your business finances and processes. 

What are the alternatives to a business checking account for contractors?

When opening a business checking account, you may want to consider opening additional accounts to support your business finances.   

A business savings account can help you put aside funds for emergencies or finance future investments. You are likely to earn a more competitive interest rate compared to leaving the money in a checking account. This can help offset some of the costs of running a business. 

Alternatively, if your business processes a large number of credit and debit card payments, a merchant account could be worthwhile. These accounts can streamline the payment process for your customers as well as keep your finances better organized. 

How to choose a business checking account for contractors

When looking for the best business checking account for contractors, here are some key factors to consider before you open an account:

  • Additional business services: While it can be tempting to go for the cheapest fee-free account, it’s important to consider additional financial tools and products a bank may offer. Look out for lines of credit, small business loans, and business credit cards that offer cashback rewards. These features can help you save money and access funding when you most need it.
  • Business growth: If you’re serious about expanding your business over time, consider what you need in a bank account today to help you achieve your business goals. A bank that can offer customer support and accommodate growing financial requirements can help you reach the next stage of your business much faster. 
  • Bundled services: Some banks offer discounts when you sign up for multiple financial products. For instance, if you sign up for a business checking account, you could receive a discount for taking out a business loan.