As with any other business, a checking account is needed. This is a deposit account governed by a bank or any other financial institution. It allows for the basic financial transactions, such as making withdrawals as deposits.
A checking account that suits entrepreneurs is what many call as a business or commercial checking account. As the name suggests, it is owned and used solely by the business. Transactions are usually done following the signing authority of managers and officers.
Table of Contents
- How to Select the Best Business Checking Accounts For Entrepreneurs
- 1. Chase Total Business Checking Accounts
- 2. Wells Fargo Business Checking Accounts
- 3. Capital One Small Business Checking Accounts
- 4. TD Bank Business Checking Accounts
- 5. Navy Federal Credit Union Business Checking Accounts
- 6. US Bank Business Checking Accounts
- 7. BBVA USA Business Checking Accounts
- 8. Citizens Bank Business Checking Accounts
- 9. Radius Bank Tailored Checking Account
- 10. Axos Bank Business Checking Accounts
- 11. Bank Novo Business Checking Account
- 12. Azlo Business Bank Account
- 13. NBKC Bank Business Checking Account
- Frequently Asked Questions
How to Select the Best Business Checking Accounts For Entrepreneurs
Choosing a business checking account is unlike opening a personal one. There are many other factors that you need to consider, and they include:
Even the biggest banks suffer from meltdowns from time to time. If you don’t want to lose your hard-earned money in the process, go for a bank that you know will last.
Tip: Make sure your bank is FDIC-insured. This will entitle you to compensation of at least 250,000 if all else fails.
Since you’re still in the process of growing your business, it’s best to go with a bank that charges low fees. If you don’t want to be crippled by such expenses, then open an account with a digital bank. Because of the lack of overhead expenses (retail space, employees, etc.), they usually have zero to low fees for business accounts.
While it’s always good to open an account with a bigger bank, be expected to pay higher fees for services, overdrafts, and other transactions.
3. Opening deposit and balance requirements
Compared to a personal checking account, a business account comes with a higher minimum deposit. At the same time, you will need to maintain a high balance if you want to avoid certain fees. If you don’t want much of your company’s money to be stuck in the bank, you should opt for an institution that offers low deposits and balance requirements.
Tip: most online banks have $0 or low balance requirements.
4. High transaction limits
If you need to do several transactions every month, then you need a bank that allows high limits for deposits and other activities. This is an important deciding factor, as most banks only permit a monthly maximum of 100 transactions or a deposit worth $5,000. Going beyond this would mean more deductions or fees.
5. Proximity and Convenience
Low fees and cheap deposit requirements will all be for naught if you need to drive for an hour just to reach the bank. Working with a bank nearby will save you a good deal of gas money, which could accumulate in the long run. It’s also more convenient since you can easily go to the bank for transactions during your free time.
Remember, time is money. As such, you could use the time you save in banking for other company endeavors.
Tip: If your banks are located far away from your business, a convenient choice is an online entity. As long as you have a good internet connection, you can complete financial transactions without leaving the comfort of your office.
6. Online banking services
In this modern day and age, online banking has become more of a requirement than a luxury. This is especially the case for entrepreneurs who may not have the time or manpower to waste for lengthy bank transactions. A bank that offers good online services will help make fund transfers, bill payments, and check deposits easier.
Tip: Make sure to inquire about the bank’s system. You’d want a program that works seamlessly with your existing payroll, payment, or accounting platforms.
7. Customer support
In the case of brick-and-mortar banks, you can easily go to the teller to voice your concerns and issues. But with an online bank, this is a different ballgame. The lack of a physical branch means you need to settle disputes via email or chat. If you are leaning towards online accounts, make sure that the bank offers superb customer support. Search the web for reviews regarding its response time or actions regarding pressing concerns.
8. Additional Services
Maybe you’d want to open another account or borrow money in the future. To save you the headache of driving from one branch to the next, it’s best to choose a bank that offers other business-friendly services. Since you have already fostered a relationship with the bank, you stand to get faster approval or preferential rates for loans and whatnot.
Chase (JP Morgan Chase) is one of the big four banks of the United States. With its headquarters in Manhattan, New York, it has assets of over $2.5 trillion. While it has 3 business checking account options, the Chase Total Business Checking is best for entrepreneurs and small business owners.
The monthly fee is $15, which can be waived if you retain a daily balance of $1,500. The fee may also be nixed in the presence of a Chase Private Client or Chase Sapphire account. If you don’t meet any of these requirements, you can enroll in a paperless account to get a discounted rate of $12.
With this option, you can avail of 100 transactions a month and deposits worth $5,000 every month/cycle for free. Transactions made after these incur a charge of 40 cents. Even with this drawback, the Chase Total Business Checking account entitles you to an unlimited number of electronic deposits.
- Chase Bank has over 4,900 branches in the United States.
- The company offers digital tools such as Online Bill Pay and Access & Security Manager.
- It offers 24/7 customer service.
- Chase Military Banking is offered to service members.
- Since this is one of the biggest banks in the US, it has a lot of customers – so be prepared for the long wait times whenever you visit a branch!
- Its transaction fee of 40 cents per subsequent transaction is more expensive compared to other banks.
Wells Fargo is a multinational financial company based in San Francisco, California. It is the fourth-largest bank in the US and the world in terms of market capitalization.
It offers 2 types of small business checking accounts:
- Simple Business Checking
Designed for home-based, non-profit, or small business, this account is conducive for low account balances and minimal financial activity. It has a small opening deposit amount ($25), and a $10 monthly fee that can be waived with a $500 maintaining balance. The first 50 transactions and $3,000 in cash deposits per cycle are free of charge.
- Platinum Business Checking
Made for more established businesses with heightened financial activities, the Premium Business Checking Account has a low opening requirement of $25. It has a monthly fee of $30, which may be waived with a $25,000 average balance.
With this account, you could make 500 transactions and a deposit of up to $20,000 for free per cycle. It also allows you to earn interest while enjoying other free services (cashier’s checks, stop payments, and money orders). Incoming domestic and international wire transfers won’t cost you anything as well.
- Wells Fargo is one of the most reputable banks in the US – and the world.
- Account owners get to enjoy 24/7 access with Wells Fargo’s online and mobile platforms.
- You will receive account alerts for dubious activities in line with the company’s strict fraud monitoring services.
- Unauthorized transactions will be reimbursed via the Zero Liability Protection.
- The Wells Fargo iOS app is deemed buggy by many users.
- The Simple Business Checking account only has a limited number of free transactions per cycle.
Capital One Banking Corporation is a renowned company that specializes in banking, credit cards, and auto loans. Based in McLean, Virginia, it is considered one of the biggest banks in the country.
The company offers 2 types of business checking accounts for entrepreneurs:
- Spark Business Basic Checking
This comes with unlimited transactions every month. A monthly cash deposit of $5,000 is free of charge, with a $1 fee for every $1,000 deposit thereafter. It has a monthly service fee of $15, with domestic wires costing $15 (incoming) and $25 (outgoing) respectively.
- Spark Business Unlimited Checking
This option is best for businesses with high transaction balances and volumes. While it has a more expensive monthly service fee of $35, it can be waived if your 30/90-day balance is maintained at $25,000.
This account allows an unlimited number of transactions, with cash deposits being free of charge. All incoming wires are free, while the first 5 outgoing wires per month will not be billed.
- All business checking accounts come with free business debit cards, online bill pay, online/mobile banking, and smartphone deposits.
- Capital One offers free overdraft protection for a business checking account that is linked with a deposit account.
- The unlimited account has unlimited incoming wire transactions for free. It also comes with 2 basic checking accounts that have waived fees.
- Capital One’s transaction fees are very costly.
- The bank is not accepting Small Business Checking Accounts applications at the moment.
TD Bank is an American Bank under the Toronto-Dominion Company. As the seventh-largest bank in the US, its services are limited to 15 states and Washington DC.
For small businesses, TD Bank offers 3 checking account options:
- TD Business Simple Checking
If you want low monthly fees ($10) and a minimum balance requirement ($25), then this account is perfect for you. Fees are waived for the first 500 transactions, with a fee of 75 cents per succeeding transactions. A deposit of up to $5,000 is free, though you need to pay 25 cents for every $100 deposited after. It also comes with an instant issue debit card.
- TD Business Convenience Checking Plus
If you want an account that could accommodate up to 4 signers, then you should choose this option. For a minimum balance of $100, you get an account that comes with 500 transactions and a deposit of $5,000 for free every month. The monthly maintenance fee is $25, though you can waive this with a combined balance of $1,500.
- TD Business Premier Checking
This account has the most number of perks for account owners. The minimum deposit is $200, with a $30 monthly fee that is waived for the first 3 cycles. You can waive the forthcoming fees if you maintain a balance of $40,000 (may be combined with your other accounts).
The first 500 transactions are free, with a charge of 35 cents thereafter. Cash deposits of up to $30,000 are free, with a 25 cent levy for every $100 deposit made after. Fees for TD and non-TD ATMs are free as well.
This account also comes with overdraft protection and other benefits.
- The TD Business Simple Checking has a big number of free transactions per month at 500.
- The TD Business Premier Checking accounts comes with a free Small Business Money Market Plus account, 2 Business Simple Checking accounts, unlimited money orders, and official bank checks.
- You can waive the monthly fee for a small balance of $1,500 (TD Business Convenience).
- TD bank is only available on the East Coast.
- The transaction fee (75 cents) for TD Business Simple Checking is quite expensive.
The Navy Federal Credit Union (NFCU) is a Virginia-based financial cooperative recognized by the National Credit Union Association.
It offers 3 business checking account options, which are:
- Business Checking
Ideal for new businesses and those with limited cash activity, this account comes with no monthly service fees. Open for 2 signers, the 30 non-electronic transactions are free of charge. For the ensuing ones, a small fee of 25 cents will be levied per transaction. Its APY is 0.05%.
- Business Plus Checking
For growing businesses with steady banking activities or enterprises with multiple owners, NFCU’s Business Plus Checking account is the best choice. For a monthly fee of $8, it is open for multiple signers. The first 50 non-electronic transactions are free, with a fee of 25 cents for the subsequent ones.
- Business Premium Checking
This top-tier account is recommended for big businesses with multiple owners, high deposit balances, or numerous transaction volumes. The monthly fee is $20, though it may be waived if the monthly average balance is $5,000. Again, it is open for multiple signers. The first 100 non-electronic transactions are free, with APYs bigger than the first 2. It ranges from 0.35% to 0.45%, depending on the amount in your account.
- It offers low monthly service rates, with fees being waived for a certain deposit amount.
- Every charged transaction only costs a measly 25 cents.
- APYs increase according to the checking account balance.
- The Business Checking account has a low number of free transactions at 25.
- Banking privileges are limited to members of the union: personnel and reservists of the Department of Defense (DOD), US Coast Guard, Army National Guard, Air National Guard, and Officer Candidate Programs. The same opportunities are extended to DOD contractors, NFCU employees, and relatives of these qualified individuals.
US Bank, also known as US Bancorp, is a financial institution based in Minnesota. As the 5th largest bank in the US, it specializes in trust, mortgage, loans, and other related services.
It offers the most number of business checking accounts, which are:
Made for new and small businesses, it is free of charge. It comes with the basics, including 25 free cash deposits and 125 free combined transactions every month. The fee for the succeeding activities is 50 cents.
For a small monthly fee of $20, you can get 100 deposits and 300 combined transactions for free. Perfect for businesses with a moderate number of transactions, the fee is 45 cents for the subsequent activities. It is one of the accounts that comes with an interest-bearing option.
If your business has higher balances, the Platinum account is ideal for you. For a monthly fee of $30, you are entitled to free 200 cash deposits and 500 combined transactions. A charge of 40 cents is levied for transactions made after these.
The above-mentioned perks are also applicable to analyzed accounts. Fees are levied according to account activity.
- Interest-bearing options are available for the Gold and Premium accounts.
- Monthly fees are waived when set options are met.
- All accounts are eligible for free mobile check deposits.
- Silver checking account owners need to pay $5 for a paper account. This is, however, free of charge for the Gold, Platinum, and Premium Accounts.
- The Silver account has a limited number of free transactions (25).
BBVA USA is a subsidiary of the Spanish Banco Bilbao Vizcaya Argentaria Company. While it was only launched in the US in 2014, it is considered one of the largest 30 banks in the country.
Small business owners can choose from any of the bank’s 3 checking accounts:
- BBVA Business Connect Checking
As the most basic account, it has no monthly service charge or a costly maintaining balance. Its free services per month include 5 processed and branch withdrawals, 2 branch deposits, and in-cash processing worth $5,000.
- BBVA Business Choice Checking
This customizable account covers 250 transaction items and $10,000 in cash processing for free every month. For a monthly service charge of $15, account owners are also entitled to 2 additional premium features.
- BBVA Business Premium Checking
As the top-tier account, this comes with 500 transactions and in-cash processing of $25,000 per month. It comes with 1 free wire per month as well. Interest accrual is also possible with this program.
- Account owners get to enjoy unlimited ATM and debit card use, free of charge.
- The use of another bank’s ATM is free of charge.
- A premium package includes one overdraft fee refund per year.
- Monthly service fees may be waived with a minimum daily balance or the use of merchant services.
- The Business Connect Checking only allows for 7 free transactions.
- You need to pay a small fee for a paper statement.
- Except for the Business Premium Checking option, other accounts don’t earn interest.
Citizens Financial Group is a bank based in Rhode Island. While it was opened way back in 1828, it only has limited services on the east coast.
Citizens Bank offers 3 types of checking accounts for business owners:
- Clearly Better Business Checking
Recommended for small businesses with a small amount of financial activity, this account is free of monthly charges. Even with its $0 maintaining balance, it comes with 200 check transactions for free every month. It also offers an overdraft line of credit so owners can continue with withdrawing money or paying with checks.
- Business Advisor Checking
If your business has more than modest financial activity, then you should opt for this account. There is no minimum amount to open an account, though you need to pay a monthly fee of $25. Then again, you can waive this if you have a $10,000 average daily balance. This account comes with free 500 transactions, with a fee of 30 cents per succeeding activity.
- Citizens Analysis Business Checking
This comprehensive checking account has a cheaper monthly fee of $20. While it cannot be waived, this account suits businesses with high-volume activity.
- The Clearly Better account offers 200 free transactions without any monthly fee.
- All types of business checking accounts can be opened with virtually any deposit amount.
- All accounts come with savings overdraft transfer and an overdraft credit line.
- Funds are available until 10 pm the same day.
Services are limited to their branches in the eastern US.
Formerly the First Trade Union Bank, Radius is a community-focused online institution based in Boston. As one of the fastest-growing banks in Massachusetts, it is the 39th largest entity in the state.
Its most famous offering is the Tailored Checking account. While you can open an account online, you’re free to visit the Boston branch as well.
Compared to most banks, it permits an unlimited number of transactions for free. No need to worry about fees, deductions, and whatnot.
With its online and mobile banking programs, you can do whatever you need to do, whatever time it may be. With their 24/7 access, you can wire money, pay bills, send invoices, and complete mobile deposits with the help of your smartphone or laptop.
- You can perform an unlimited number of transactions without incurring any fees.
- Your account will earn interest as long as it has a balance of $5,000 and up (APY at 0.10%).
- You can download the Radius app and use it on your Android or iOS phone.
- Unlimited cashback for transactions made via the Radius debit card.
- No fees for Radius bank ATMs, with rebates of up to $300 for other ATMs.
There is only one physical branch in Boston. If you have concerns, you need to do everything online.
Axos Bank is a federally chartered bank based in San Diego, California. Founded in 1999, it specializes in online banking, money markets, and of course, checking accounts.
For entrepreneurs, Axos offers 2 types:
- Basic Business Checking
This has modest checking requirements, as all you need is $1,000 to open an account. It offers free 200 transactions, with a charge of 30 cents thereafter. There are no monthly maintenance fees, while transactions made through any ATM in the country are surcharge-free.
- Business Interest Checking
With a minimum opening amount of $100, this account only comes with a $10 maintenance fee. You can waive this easily by maintaining an average daily balance of $5,000. Its free monthly services cover 60 counts for Remote Deposit and 50 for other transactions. With an 0.50% APY, you get to earn money along the way.
- The Business Interest Checking account yields an interest of 0.50%.
- The Axos Bank online platform is compatible with Quickbooks.
- All account owners are provided with helpful digital tools, including Online or MobileBanking programs, Mobile Bill Pay, and a Remote Deposit app.
- The first set of 50 checks are complementary.
- The Basic Business Account requires a costly minimum deposit of $1,000.
- Real-life support is limited due to the digital nature of the bank.
- Compared to other banks, its free transactions are fairly limited in number.
Bank Novo is a banking platform that is specially made for modern-day business owners. It runs as an independent tech company, with the banking transactions being governed by Middlesex Federal Savings.
The company offers a business checking account that is unlike those offered by traditional banks. For one, it does not require monthly fees or a minimum balance. Transfers, mailed checks, and wires are also free of charge.
The application process takes a mere 10 minutes. After signing up, you get to use its easy-to-use mobile programs right away. Since they can be easily integrated into most business tools, linking accounts can be done with relative ease.
More than just refunding all ATM fees, Bank Novo also gives exclusive perks that cost thousands of dollars – for free.
- There are zero fees for transactions.
- There is no required minimum balance.
- Wires, transfers, and mailed checks are all free of charge.
- You can open a business checking account online in as quick as 10 minutes.
- As everything is done online, you need to contact customer support for any concerns. You don’t have a brick-and-mortar bank to go to for such issues.
Azlo is a technology-centric bank based in San Francisco, California. Founded in 2017, it provides financial services online. It is one of the many companies offering a free business bank account for sole proprietors and bigger companies alike.
You can easily open an account by visiting its website or accessing its mobile app. There’s no fee to pay, and there is no required minimum balance. You can even do an unlimited number of transactions as you wish.
This account offers standard transfer options such as mobile check deposits, bank to bank transfers, and incoming wires (both local and international). For a small fee, you may avail of additional services as well. These include pulling funds from other accounts or pushing money to other linked accounts.
- No monthly fee or required minimum balance.
- The Azlo app can be easily connected to accounting programs such as Xero, Quickbooks, and Wave.
- The bank is also integrated with other financial programs, such as PayPal, Stripe, Square, and Kabbage.
- Withdrawals are free in any of Azlo’s 55,000 partner ATMs.
- As an online bank, queries or concerns cannot be resolved instantaneously as with a brick-and-mortar bank. You need to wait for a reply via email or chat, although the wait time is not very long.
NBKC heralds itself as the best bank in Kansas City. While it is known to be an online institution, the FDIC-insured enterprise does have 4 branches in the area. Whether you decide to drive by one of its physical banks or surf the website, you can easily open a free business checking account.
True to form, most of its business checking account services are available for free. There’s a $0 minimum balance, and you don’t have to pay for incoming domestic wires, stop payments, or overdrafts. There are no fees for mobile deposits as well.
With NBKC, you need not visit a bank (though you could) for most transactions. All you need to do is download the bank app. Through this program, you can deposit checks, pay bills & suppliers, and transfer money, to name a few.
Should you want to start accepting credit card payments, NBKC can help you set up a merchant account.
While NBKC’s services are mostly free, there are only 2 things that you need to pay for: sending a local domestic wire ($5) or sending/receiving international wires ($45).
- You can open an account online.
- Overdrafts are free of charge.
- Refunds ($12) for ATM use anywhere around the world.
Expensive international wire costs.
Frequently Asked Questions
a. Social Security number or employer identification number
b. Proof of personal identification, i.e. passport or driver’s license
c. Certificate of an assumed name (DBA or doing business as) Business license with the name of the business and its owner/s
d. Organizing documents as approved by the state
e. For businesses with multiple owners – Partnership agreement with the name of the business and its owners
f. For merchant accounts – Monthly credit card revenue
A business checking account is usually the first requirement for any business. After all, it allows you to perform basic transactions, which include managing cash flow, paying suppliers, and collecting invoices, among many others. This is also a requirement for opening a merchant account, which allows you to accept credit card payments.
Once you have profits that you don’t mind setting aside for a rainy day, you can go ahead and open a business savings account. This is a good place to store your business revenues as it earns interest in the long run. In some banks, this is offered as a complimentary service alongside a business checking account.
A commercial checking account is beneficial for any entrepreneur. Its advantages include:
a. More organized company records
A business checking account is different from your personal one. It keeps everything in order as it can help you delineate personal expenses from commercial transactions. Should you decide to do everything in one account, you will have a hard time determining profits as well as loss.
b. Precise taxation and deductions
The last thing you want to happen is to have a snafu with the IRS. With the help of a business checking account, you can avoid miscalculations in taxes and deductions. Since it’s separated from your personal account, you won’t have a problem looking after sales figures and whatnot. It can help you determine your business expenses, a figure that is necessary for your tax deductions.
c. Multiple authorities for signing
Compared to a personal banking account, you can share transaction authority with a commercial checking account. This will give you more time to focus on your business since you can relegate the deposits or withdrawals to your trusted employee.
Although having multiple signatories is a good thing, it comes with some sensitive data so you need to be careful when entrusting such information. This is especially the case if you have a sole proprietorship account, as this reflects your social security number.
d. Facilitates credit card transactions
More and more customers are using credit cards for their relative ease and convenience. As such, you stand to lose many customers if you don’t accept this kind of payment.
With a business checking account, you can append a credit acceptance system for your company. You can even set up a merchant account as necessary. Although this comes with additional fees, a credit card payment system will help you attract clients. Remember, the more customers you have, the better revenues you stand to earn.
e. Provides a more professional image
Even if your business is small, you want to make it look as professional as possible. You’d want to give a cheque with the business name on it, instead of just your personal name. This professional image will help you gain trust from both your suppliers and your clients.
Additionally, having a commercial checking account can help you establish ties with your bank. This loyalty will help you earn better rates for say, a small business loan that can help you grow your company’s reach.
While a business checking account has many advantages, it has some cons as well. For one, more fees apply to a business account in comparison to a personal account.
Businesses are also expected to maintain a high balance – though this does not apply to all banks. Falling beneath this limit usually leads to more fees and deductions. As for a personal account, you can keep a zero balance as long as you don’t overdraw money.
Insurance for business checking accounts is limited to $250,000. In case something happens and your money is way above this level, you stand to choose a big deal of revenue. As such, it is important to choose a reputable account to prevent this instance from happening.
Overdraft protection is a benefit offered to business checking accounts. This ensures that checks and other transactions go through, even if your account does not have sufficient funds. The average overdraft fee is $35, though it may accumulate as you continue to make transactions.
As this is an optional service, it comes with some pros and cons for your business:
a. Even if you don’t have enough money in the bank, you can make an ATM withdrawal or complete a debit card transaction.
b. Overdraft protection can minimize the instances of bounced checks. This will reduce your chances of being reported to the ChexSystems by a frustrated receiver.
a. You need to pay additional fees and interests, even if some part of your money is covering the amount.
b. The transaction may not go through if your backup money source has a low or zero count.
A business checking account provides entrepreneurs with a platform to perform basic banking functions, such as making deposits or withdrawing money.
It is beneficial for any small business, as it provides better company records and accurate tax deductions. It also allows for credit card transactions, all the while making any enterprise look more professional. Since it permits multiple signatories, the owner can assign some banking responsibilities to another employee.
When choosing a business checking account, every entrepreneur must consider the following factors: fees, opening amount or minimum balance, bank proximity or convenience, reputation, transaction limits, online banking programs, customer support, and other services.
To open a business checking account, you need to submit the following documents: Social Security Number or Employee Identification Number, business license, business formation documents, and ownership agreements, if any.