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Best Business Checking Accounts for Sole Proprietors of 2022

Katie Stiner

While it seems convenient to use a personal bank account for your business, upgrading to a business checking account can give your business added credibility and help separate your personal and business finances, making things simpler during tax season. We reviewed the top options based on their features, fees, and overall quality.

Built to optimize taxes and accounting

$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

Manage funds easier with sub-accounts

$0

Monthly Fee

1.50%

Est. APY

Overview

Bluevine business checking comes with no monthly fees. Plus, the account provides an impressive list of benefits such as integration with online business tools, sub-accounts to help you manage your finances, and two free checkbooks.

What we like

  • Unlimited transactions
  • No monthly fees
  • High APY
  • Sub accounts for easier management
  • Integration with business tools

What we don't

  • No APY on balances over $100,000
  • International wire transfers not available
  • Cash deposit fee of $4.95

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

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

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

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

What is a business checking account for sole proprietors?

While you can legally use a personal bank account to manage your business finances, investing in a business checking account can help you save time and money, and keep personal finances separate. 

A business checking account allows you to carry out basic transactions such as sending and receiving payments and making cash deposits. 

Do you need a business checking account as a sole proprietor?

If you run a business or a side hustle, a separate checking account for your business can have advantages and benefits:

  • Easier bookkeeping for taxes
  • Build credibility for your business
  • Prepare for your future growth

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

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

Pros

  • Simplify finances: Paying taxes can be stressful for business owners. A business checking account can help you keep track of expenses and keep a cleaner financial record of your business transactions. 
  • Grow business: If you’re looking to grow your business, you may be considering taking out a business credit card, securing a line of credit, or applying for a loan. A business checking account will give more credibility and establish trust with your bank. 
  • Professionalism: Customers can pay your business bank account instead of a personal bank account which can make the transaction seem more legitimate. 

Cons

  • Fees: Business checking accounts can charge more fees than personal checking accounts and may not seem worthwhile for business owners just starting. For instance, transaction fees may apply, and there may be cash deposit limits.  
  • Paperwork: Many traditional banks can require a lot of paperwork and documentation to open a business checking account which can be time-consuming for a business owner.
  • Minimum balance: You may be required to hold a minimum balance in your account or spend a minimum amount with your debit card each month. Smaller businesses with less revenue may find it hard to meet the requirements. 

What are the fees for a business checking account for sole proprietors?

When researching business checking accounts for sole proprietors, 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 fees: Every month your business checking account will deduct a monthly fee to cover the cost of services provided. Some banks waive this fee if a minimum balance or qualifying criteria are met each month, while other banks charge zero monthly fees. 
  • Transaction fees: Many banks place limits on the number of transactions during a billing cycle. Transactions can include ATM withdrawals, check payments, and electronic transfers. Once you reach the transaction limit on your account, you’ll typically pay a small fee for each transaction thereafter. 
  • Cash-handling fees: If you reach your cash deposit limit, which is the maximum amount of cash you can deposit during a billing cycle, you’ll typically be required a small fee to make further deposits. 
  • ATM fees: Depending on the bank you choose, there could be fees for ATM withdrawals. Some banks will reimburse out-of-network ATM fees. 
  • Overdraft fees: Accounts that provide overdraft facilities may charge you a fee for withdrawing below your balance.  

In addition, there may be fees for paper statements, replacement of debit cards, foreign transaction fees, and wire transfer fees. It’s important to consider all fees when choosing your business checking account, as the sum of these fees can add up significantly over time. 

What are the alternatives to a business checking account for sole proprietors?

If your business is doing well, you may want to consider opening up a business savings account. This can help you save money for emergencies or unexpected expenses. When considering a business savings account as a sole proprietor, you’ll want to look out for an account where you can earn interest on your savings. 

How to choose a business checking account for sole proprietors

When looking for the best business checking account for sole proprietors, here are some key factors to consider before you choose a bank:

  • Account opening: Many banks allow you to open an account online in just a few minutes. This can save you time and give you all the features you need to start managing your finances from a business checking account.
  • Incentives: Some banks can waive fees for minimum balances or provide discounts if you bundle services with a business credit card. This could help your business save money and potentially earn rewards. 
  • Tools and services: Many online banks offer free online banking and integration with accounting software that could help you seamlessly manage your business finances. Look out for mobile check deposits, invoicing, and online bill pay. 
  • Compare providers: To find the best business checking account for your business it’s a good idea to research multiple providers and choose your bank according to the financial needs of your business. There’s no one-size-fits-all therefore consider whether the account provides all the features you need to run your business smoothly.