Whether you’re starting a new company or running an existing business, California offers a wide range of business checking accounts. When deciding on an account, there are a few factors to keep in mind. For starters, it is important to know your business’ current and future goals. For example, if you already have an accounting and budgeting software or are considering getting one, you might want to look for an account that integrates with it. Manually entering all bank account transactions can be a huge pain.
Second, the account fees, minimum requirements, and limits. Typical account fees include the monthly maintenance fees, transaction fees, inactive account fees, and others. Some accounts also have minimum account balance requirements and may apply a fee if you go below the set level.Â
Also, some banks limit the number of transactions you can perform on an account in a given period. Others may also limit the amount of money you can transact in a day.
We reviewed some of the best options based on their features, costs and other perks and benefits.
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.
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.
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)
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.
Lili’s business checking account comes with features that help users keep their banking costs low, optimize their taxes, and manage their business’s finances.
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
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
Why do you need a business checking account?
Having a business checking account can benefit your small business in a number of ways. Here are some of the advantages:
Separate personal and business finances: You’ll know your actual business financial standing compare to your personal. Nothing will get mixed up. This will also make it easier during tax season
Loans: Your bank will be able to see the cash that comes in and out of your account, which can increase your likelihood of getting more loans.
Cash management: A business checking account also helps with money management. You’ll be able to use online banking services to see what your balance is at all times, which allows you to spot if there’s a problem before it gets out of hand. Using online banking also allows you to transfer money between multiple accounts or to other people in just a few seconds, which saves time and energy.
Fraud protection: Businesses can be targets for fraudulent activity. This is why it is important to choose a bank that offers fraud protection programs such as zero liability policies on lost or stolen checks, debit cards, and ACH transactions. With these policies in place, you will more likely not be held liable for unauthorized charges made with business checks or electronic payments from your account.
Payroll management: You can send employees direct deposits for paychecks each month, which will help you keep track of how much money you spend on payroll and how much revenue is being generated from employee salaries.
Tax benefits: If you have a small business with a bank account, you may be able to deduct the cost of checks and other supplies as a business expense on your tax return.
What do you need to open a business checking account in California?
To open a business checking account, you will most likely need to provide the following:
A physical location of your business
Proof of ownership of the company
Tax ID number or Social Security Number. You will likely be asked for either a Tax Identification Number (TIN) or Social Security Number (SSN). Â
A copy of the articles of incorporation (for corporations), or if a sole proprietorship, a copy of the article of organization.
Proof that you are an authorized signer on the business checking account (i.e. a letter from the company with your name as an authorized signer)
In addition to these items, you will also need to provide your personal information (i.e. name, address, photo id, phone number, and social security number) for verification purposes.
Common business checking account fees in California
Here are some of the most common business checking account fees in California:
Account maintenance fees: Many banks charge a fee every month just for having an account. This fee ranges from $10 to $25, but in some cases, it can be significantly more than that. You can get it waived.
Minimum Balance Fee: It is imposed if the balance in your account falls below a certain amount set by the bank or credit union. Below minimum balance fees typically run between $10 and $25 per month.
Overdraft fee: Business accounts are charged overdraft fees if transactions conducted by the account holder exceed their available funds.
ATM Fees: When you use an ATM that’s not owned by your bank, you may have to pay a fee. There’s usually a network of ATMs in your area that are part of your bank’s network, so look for one of those. If you must use one outside the network, call the number on the screen before you take out cash to make sure there aren’t any extra fees.
Overdraft Protection: If you have overdraft protection on your account, your bank might cover the cost of ATM or one-time debit card transactions that are declined due to insufficient funds in the account. But if there is a balance in the account, it will be used to cover these costs before overdraft protection kicks in. Some banks charge a flat fee for overdraft protection while others charge interest on top of the declined transaction amount.
How to choose the best business checking account in California
There are many factors that go into choosing the best business checking account for your company. That’s why it’s important to take a look at all of the options before deciding on one. Here are some things to consider:
Account balance: You will have to have enough money in the account to meet the minimum balance requirements. This can be a problem if your business isn’t profitable yet or if you don’t have enough savings and would rather not dip into your personal accounts.
Fees and costs: Some banks charge certain fees, such as an account origination or maintenance fee, or have minimum balance requirements that must be met each month to avoid a fee. No matter how much money you make from your business, you don’t want to pay any more fees than necessary.
Location and access hours of branches: If you plan on going into the bank for help with your business finances, you want convenient locations and hours that work for you and your employees. Some banks may offer extended hours for online customers but not for walk-in customers, so keep that in mind when choosing a bank.
Customer service reviews: Check out customer service reviews online before opening an account so you know what kind of service to expect from a particular company.
Security: Look for security features that can help protect your assets and identity, including antiphishing software, two-factor authentication, and fraud monitoring tools such as those that help spot fraudulent charges on your credit card statements.
