Opening a business checking account has many benefits and helps you track business finances, simplify tax preparation, and establish business credit. We reviewed the top options based on their features, fees, and overall quality.
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
What to consider before opening a business checking account?
Transaction fees: See which banks have the best deals that are in line with the output of your business and payment collection model. A common transaction fee that banks compete over is some amount (for example, $0.40) for each debit and non-electronic deposit above a certain amount of transactions per statement cycle.
Early termination fees: Some banks will require a contract for a specific length of time for a business checking account, while others will not. Some may have penalty fees associated with ending the contract early. Find out what terms are most agreeable to your needs in terms of contracted duration, fee structure, etc.
Minimum account balance: In order to avoid additional costs, banks will often require a minimum account balance as a way for you to waive their fees. Each bank has a different policy, so do your research.
Interest rates for a line of credit: Businesses can enjoy a lower rate on lines of credit if they already have a business account open with a national or regional bank. Compare that to the range of personal loans or credit cards and the advantage of a business loan through a business account becomes a bit clearer. Plan ahead and see which rate offerings make sense for future funding.
Introductory offers: In order to attract clients, banks will often have introductory offers which feature different perks. From waiving fees to minimum account balances, it is best to see what promotions best fit what you are looking for.
Interest rates for business checking accounts: Each bank has its offer of interest rates for business checking accounts. Find the highest interest rates with the benefits you need and have your money make money for you!
What you need to open a business checking account?
To open a business checking account, you will need to collect the necessary documentation. Banks will need this documentation to verify that you are who you say you are, your business is legitimate, and that you are not in trouble with the Internal Revenue Service. Documentation needed includes, but is not limited to:
The legal name of the business as it appears on documents
The business address
Your contact information
Two forms of identification (driver’s license, passport, etc.)
Employer Identification Number, or Social Security Number if you are a sole proprietor
The formation papers of the business
Any ownership agreements
The business license
Common business checking account fees
Like with all contracts, it is essential to read the fine print to know your obligations. Some banks charge fees for certain things (like just having an account with them), while others either waive it based on a minimum balance or don’t have a fee at all. Here are some standard costs associated with business checking accounts:
Monthly fees: Mentioned above, some banks charge a monthly fee just to have a business checking account open with them. This fee is something that can be negotiated or waived by talking with your bank, or avoided entirely by choosing a bank that doesn’t charge monthly fees to begin with.
Minimum balance requirements: This topic can be split into two sections. The first section is a minimum balance requirement in order to not incur additional fees like the monthly fees mentioned above. Some banks require a certain amount of capital to always remain in the account in order to waive the monthly fees. If the balance drops below that, you could be looking at a charge for that month. The second section is to have the money in your account start working for you by meeting the minimum balance requirements to start generating interest. Depending on the bank, you may need a minimum amount of money in the business savings account in order to start accruing interest. Meeting the minimum balance along with a higher interest rate in your business savings account helps maintain the value of your money over time.
ATM access: Whether you’re withdrawing or depositing funds into your business checking account, ATM access is a critical asset in the cash flow of a business. If you’re on the road, this may be a fee to look for. There are banks that offer free ATM access nationally and internationally, including refunds for foreign transaction fees.
Payment capabilities and transfer fees: With lots of businesses going online, your bank’s payment capabilities need to be able to keep up with payment options. Some banks already have built in integrations with payment platforms such as Zelle or Shopify for eCommerce which will not have bank fees per say, but may incur third party fees for using their platforms.
Money transfers: Transferring money (especially wiring to a different account) is also a fee to look out for. The median wire transfer fees for financial institutions: Domestic incoming fee: $15, Domestic outgoing fee: $25, International incoming fee: $15, and International outgoing fee: $49. Some banks charge transfer fees between any accounts, while others have no cost transferring money between accounts within their ecosystem. The pay structure also varies widely between flat rates and the percentage of the transferred money. This is an important fee to look into when doing business internationally or having a payment structure which relies on bank transfers/wiring set up.
Incidental fees: These types of fees are for the unexpected. A check that you need to put a stop payment on, an unplanned expense that leads to overdraft, forgetting to enroll in Autopay and being hit with a late payment fee. All of these ad hoc fees should be looked at when looking at the business checking account package. Some of these can be negotiated and some can have systems put in place to avoid them, like overdraft protection.
Difference between personal and business checking
A business checking account separates the money earned through your business’s functions from your personal checking account. This makes it easier to differentiate which transactions were made for what purpose (if your tax accountant works by the hour, this could save you a ton of money). Whether your business is incorporated, an LLC, or if you are a sole proprietor, a business checking account keeps your business capital separate and protects your personal accounts from any potential lawsuits.
Personal checking accounts can usually be opened for free. Occasionally they also come with a low fee that can be waived easily. Business checking accounts tend to have higher monthly fees that may not be negotiable or waived. Online banks, however, are starting to become more commonplace and have a higher likelihood of offering no-fee, online checking accounts.
While personal checking accounts have a primary debit cardholder, business checking accounts have the option for multiple cardholders to empower employees with purchasing or paying for business needs. The cards can be limited with spending and withdrawal limits at ATMs by the primary cardholder.
Another big difference between business checking accounts and personal checking accounts is the eligibility and application process. Personal checking accounts are easy to open and usually need one or two forms of identification. Business checking accounts, however, will need several documents.
How to choose the best business checking account?
The first thing you need to do before starting to look at the different options is to assess the needs of your business.
Your business model: Is your business brick and mortar? Is it eCommerce? Domestic and/or international?
How you accept payment: What is your preferred method of payment? Are you doing business domestically or internationally? How many transactions are you forecasting per month?
Introductory offers: What deals can you get initially when signing on?
Residual expenses: What terms can you lock in so that you’ll be able to save on fees in the future?
These and more factors are all worthy of consideration before moving forward and reaching out to financial institutions regarding opening a business checking account. Create a side-by-side comparison of all the pros and cons of each institution and find the best deal for your business model.
