Business owners want to focus on their businesses, not necessarily on where to bank, which is why choosing the right business checking account is important. Convenience, not paying fees and easy access should be the top three goals.
Just as businesses are different, so, too, are the features that each business owner will require in a business checking account.
“[Business owners] enjoy what they’re selling or what their business is all about,” says Kari Harpold, treasury management officer at Capitol Bank in Madison, Wisconsin. “But to have to also do all of the financial end of things … it’s not what they enjoy doing. So if they can have a good relationship with the bank, where the bank’s handling a lot of that stuff for them, you’re making it more efficient for them and saving some of their time,” she added.
Bankrate’s picks for the top business checking accounts
Note: Annual percentage yields (APYs) shown are as of June 4. Bankrate’s editorial team validates this information regularly, typically biweekly. APYs may have changed since they were last updated and may vary by region for some products. Bankrate includes only FDIC banks or NCUA credit unions in its listings.
A closer look at the top business checking accounts
LendingClub Bank; 1.50% APY (on balances up to $99,999.99)
Best for: Cash-back debit card
Overview: LendingClub Bank is an online bank founded in 2007. It acquired Radius Bank in 2021.
Perks: LendingClub’s Tailored Checking offers unlimited cash back of 1 percent and earns 1.50 percent APY on balances under $100,000. The account doesn’t charge fees to use another bank’s ATM, and it provides unlimited rebates of ATM surcharges from other banks.
What to watch for: LendingClub Bank has only two cashless branches, in Boston and Utah. Businesses that need cash and coin orders on a regular basis may want to avoid online banks. There is a $10 monthly maintenance fee if the Tailored Checking average account balance falls below $500.
Bethpage Federal Credit Union; 0.20% APY
Best for: Free account with no transaction limits
Overview: Bethpage Federal Credit Union was established in 1941.
Perks: Bethpage Federal Credit Union’s Free Business Checking with Interest doesn’t have a transaction limit. It also doesn’t charge you a monthly service fee, and it earns some interest. Anyone can join Bethpage Federal Credit Union with a $5 deposit into a savings account.
What to watch for: It only has branches on Long Island, New York.
Capital One; non-interest-bearing account, earns no APY
Best for: Free domestic wire transfers
Overview: Capital One has almost 300 branches and about 50 Capital One Cafés. It offers online bank accounts. Savings accounts, business credit cards, the ability to accept credit card payments from customers and lending options are some of the products and services that Capital One offers for businesses.
Perks: Incoming domestic wires are free with the Enhanced Checking account. The first five outgoing domestic wires are free each month, after which $25 will be charged for each transfer.
The Enhanced Checking account allows you to have the monthly maintenance fee waived if your prior 30- or 90-day balance averages $25,000 or more.
What to watch for: A monthly maintenance fee of $35 is charged for 30-day or 90-day balances that go below $25,000.
Enhanced Checking customers aren’t charged a fee for making cash deposits. But the bank may convert the account into another checking product if you make more than $40,000 in cash deposits during a statement cycle. The account is meant for businesses that have less than $10 million in annual sales.
Regions Bank; non-interest-bearing account, earns no APY
Best for: Getting a safe-deposit box discount
Overview: Regions Bank has more than 1,200 branches in the South, the Midwest and Texas.
Perks: Regions Bank’s LifeGreen Business Simple Checking account offers business owners a discount on a safe-deposit box. Account holders can waive the $7 monthly service fee by making at least $500 in purchases with a Regions Business CheckCard. Regions only requires a $100 deposit to open an account.
What to watch for: While account holders can make cash deposits up to $2,500 per month for no charge, there’s a $0.25 fee for each $100 deposited beyond that.
Security Service Federal Credit Union; 0.05% APY (on balances of $1,500 or more)
Best for: Business perks
Overview: The Security Service Federal Credit Union Premium Business Checking account offers an account that helps with more than just banking. The account is subject to a $20 monthly maintenance fee for accounts that don’t maintain an average daily balance of at least $50,000.
Perks: With the account, you’ll have access to a network of attorneys who provide free and discounted services for Premium Business Checking customers. The credit union also provides business checking customers with mobile phone coverage, which covers accidental damage, mechanical failure or theft. Two claims of up to $500 each are permitted in a 12-month period. The account also comes with 24/7 access to doctors and licensed mental health professionals for video and phone appointments for you and people you employ.
What to watch for: Only customers who live, work, attend school, worship, volunteer or have a business in Colorado, Texas or Utah are eligible to join the credit union. You can also join by being a member of select military branches or units. Department of Defense employees at certain bases within Security Service Federal Credit Union service areas may also be eligible.
Also, family members or household members of an existing member can join.
American Express National Bank; 1.30% APY (on balances of $500,000 or lower)
Best for: Earning rewards
Overview: The American Express Business Checking account doesn’t have a monthly service fee, and it can help you earn both a competitive yield for a business checking account and American Express rewards.
Perks: You can earn American Express rewards and a competitive yield with this account. Account holders also have 24/7 support, according to the bank’s website.
What to watch for: Like most bank account bonuses you have to follow the rules in order to earn your new account bonus. New American Express Business Checking account customers need to do the following things to earn 30,000 American Express rewards points:
- Deposit at least $5,000 within your first 30 days with the account.
- Keep at least $5,000 in the account during the first 60 days.
- Make at least five qualifying transactions within your first 60 days with the account.
Business checking account features and terms
- Debit card
- A debit card allows you to make purchases from your business checking account. Business debit cards typically can also be used at ATMs, and employees may also have debit cards issued to them.
- Cash-counting limits
- Your bank might limit the amount of cash that can be deposited into the account without incurring a fee, which affects certain businesses — such as restaurants, grocery stores or convenience stores — more than others.
- Positive pay
- This feature allows a business to submit information about the checks that it has written to limit the occurrence of fraudulent transactions. “The customer is able to see an image of that check that doesn’t match for whatever reason is up on their computer screen within their online banking,” says Harpold of Capitol Bank. There’s usually a fee for this service. Positive pay may also be available for automated clearing house (ACH) transactions.
- Bill pay
- A business can pay its bills online through a business checking account.
- Remote deposit capture
- A business may be able to deposit checks without going to the bank through this service.
- Items
- Some business checking accounts may limit the number of items per month. An item may be a check, ACH, cash withdrawal with a teller, ATM withdrawal, debit card purchase or other amount added or subtracted from your account.
What to consider when choosing a business checking account
Here are some things to consider before opening a business checking account:
- Minimum balance requirement
- Monthly maintenance fee
- Cash-counting fee
- Other fees
- Bonus for new accounts
- Free or discounted checks
- Number of free items or transactions
- Proximity of a bank branch to your business, especially for businesses that often need cash or coin orders or businesses that need to deposit cash or coins
What to know about minimums and fees
It’s important to know the minimum balance requirements and fees. Try to find an account that doesn’t charge a monthly maintenance fee or one that has a fee that you can easily get waived. You may be able to waive some fees by maintaining a certain balance. Or there may be other ways to avoid a fee. For instance, Regions Bank waives the monthly service fee for those generating $500 or more in Regions Business CheckCard and or business credit card purchases.
Keeping track of your business’ finances
As a business owner, especially at a small business, you have a lot to keep track of: Bankrate has calculators that may help. You might also opt to use QuickBooks or another software program to help keep track of your business.
Business checking account FAQs
-
The best bank for a small business will depend on the priorities of the small business. Each small business is going to have different things that they’re looking for in a small business account. It may depend on the type of business or the type of banking services it needs.
A tech-savvy owner of an e-commerce business might opt for an account at an online bank. But a restaurant owner, who needs change every day, might favor the bank down the street.
-
Similar to any checking or savings account, you’ll need some documents for yourself and the business to open a business checking account. These may include your government-issued photo ID, your Social Security number, the tax ID number (TIN) for the business, a deposit of cash or a check made out to the business and other business formation documents.
-
A business checking account should help keep your personal and business banking separate.
There are a few reasons why your business should have a business checking account.
- It could help limit potential liability and make it simpler to file taxes.
- It makes it easier to see how your business is doing.
- A business checking account might also offer you more options, such as the ability to accept credit card payments.
- Your business will look more professional when writing checks.
-
A sole proprietorship may be able to open up a business checking account. A Social Security number, employer identification number (EIN) or an individual taxpayer identification number (ITIN) is needed.
-
You might be able to at certain banks. Certain online banks also will let you open an account online. You may also be able to apply for a business checking account online at a brick-and-mortar bank.
-
Both Federal Deposit Insurance Corp. (FDIC) banks and National Credit Union Administration (NCUA) credit unions offer business checking accounts. Some online banks also offer these checking accounts.
-
Rachel Ivanovich, an enrolled agent and founder of Easy Life Management in Carlsbad, California, says it’s always better to keep your business and personal accounts separate and not commingle funds.
“I tell all of my clients, even if you only have a few transactions and it seems silly to have a separate bank account, do it anyway,” Ivanovich says. “In the long run, as your business grows, you’ll be in the habit of keeping your funds separate. And it makes tracking so much easier. It just makes the accounting cleaner and if you ever do get audited, it’s so much better.”
-
Business checking accounts may have different features, terminology and limits than a personal checking account.
It is likely to have more restrictions and possible fees, too. For instance, generally in a personal checking account, you’ll write checks and make withdrawals without tracking how many transactions you make. That is because, unlike a business account, there usually isn’t a fee based on the number of transactions made or items.
Research methodology
Bankrate’s editorial team regularly surveys around 70 widely available financial institutions, made up of the biggest banks and credit unions, as well as a number of popular online banks. To find the best business checking accounts, our editorial team analyzes various factors, such as annual percentage yield (APY), minimum balance requirements and broad availability. All of the accounts below are insured by the Federal Deposit Insurance Corp. (FDIC) at banks or by the National Credit Union Share Insurance Fund (NCUSIF) at National Credit Union Administration (NCUA) credit unions.
-
These financial institutions are featured in our CD rate research: Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank5 Connect, Bank of America, Barclays, Bask Bank, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO, Bread Financial (formerly Comenity Direct), BrioDirect, Capital One Bank, Chase Bank, CIBC USA, CIT Bank, Citibank, Citizens, Citizens Bank (Rhode Island), Comerica Bank, Customers Bank, Delta Community Credit Union, Discover Bank, Emigrant Direct, Fifth Third Bank, First Citizens Bank, First Internet Bank, First Technology Federal Credit Union, FNBO Direct, Golden 1 Credit Union, Marcus by Goldman Sachs, Morgan Stanley Private Bank, Huntington National Bank, Investors Bank, Investors eAccess, KeyBank, Limelight Bank, Live Oak Bank, M&T Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, PenFed Credit Union, PNC Bank, Popular Direct, PurePoint Financial, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, State Employees’ Credit Union, Suncoast Credit Union, Synchrony Bank, TD Bank, TIAA Bank, Truist Bank, UFB Direct, U.S. Bank, USAA Bank, Vio Bank, VyStar Credit Union, Wells Fargo and Zions Bank.
Read the full article here
