Whether you’re opening your first business account or looking to switch banks, you need a business checking account that works for you. From accepting payments from customers to managing your payroll to paying your bills, the right business checking account can help simplify your everyday banking activities––so you can spend more time focusing on what matters most, like operating and growing your business.
What should I look for when choosing a business bank account?
There are a number of factors to consider when opening a business checking account. Do you need access to physical bank branches or ATMs? Does the account have a minimum initial deposit or minimum balance requirement? Will you have to pay monthly fees, and how do transaction fees compare to other accounts?
Traditional vs. online-only
A good step when deciding what kind of business checking account might suit you is determining whether you’re looking for a traditional banking experience or one that is online only. Each has their own benefits. Let’s take a look at some:
Online-only benefits
- Convenience: Online-only checking accounts typically have more digital tools that empower you to do your banking on the go.
- Low/no fees: Many online-only options waive monthly maintenance fees or drastically reduce them.
- Higher interest rates: Since there is less overhead without physical branches, you may be able to earn a higher interest rate.
Traditional banking benefits
- Brick-and-mortar locations: If your business deals mostly in cash, it might make sense to use a traditional bank so you have a local branch to make deposits.
- Special services: Traditional banks are usually able to offer specialized services that online accounts may not, like cashier’s checks and currency exchanges. This is an important consideration if these services are important for your business.
Fees
With so many business checking options, it’s important to compare fee schedules before choosing which account to open. As we mentioned above, most online-only accounts come with fewer (or lower) fees than traditional banks because they don’t need to pay to maintain physical locations.
Here are some examples of fees you should consider:
- Monthly fees
- Non-sufficient funds (NSF) fees
- Overdraft fees
- Transaction fees for ACH, wire transfers, check payments, etc.
- ATM fees
You probably won’t be able to avoid fees altogether, but it’s important to find a business checking account that’s transparent about the fees it charges.
Interest rate
Many business checking accounts don’t earn much interest, if at all. That’s why some companies open up business savings accounts––so they can earn interest on money they don’t need day-to-day. The only issue: these businesses need to move money back and forth between checking and savings accounts just to earn a little bit of interest.
When looking for a business checking account, see if you can find one that gives you the opportunity to earn high-yield interest on your operating balances. That way, there’s no need to maintain multiple accounts, and you save yourself the trouble of transferring money between checking and savings.
Minimum balance requirement
Some traditional business checking accounts require that you maintain a certain minimum balance within the account at all times. There can be significant fees associated with falling below this threshold.
For some established businesses, a minimum balance requirement isn’t an issue. However, if your business is just starting out or if your cash flow isn’t always consistent––say, there’s some seasonality to your revenue––minimum requirements don’t work for you.
Depending on the nature of your business and cash flow, it might make sense to look for a checking account with no balance requirements, especially if you know you’ll need access to every dollar you have.
Transaction limits
Most business checking accounts have specified limits on your incoming and outgoing transactions. Some may limit the number of transactions you can make, while others might have restrictions on the total amount you can deposit or withdraw in a single transaction or given timeframe.
Transaction limits vary from account to account, so it’s important to do your research and find a business checking account that fits your needs. With fewer restrictions, you’ll be able to use a single account for all your deposits and bill payments without needing to worry about having a transaction stopped.
Account features
Do you need a debit card or physical checks? Would it save you time if your business checking account had an integrated bill pay platform? Could you budget more effectively for payroll and taxes with sub-accounts under your main checking account?
Make sure you’re familiar with a business checking account’s features before you apply, so you can open the account knowing exactly how you’ll use it to manage and grow your business.
Software integrations
Having software integrations for your business checking account is non-negotiable—it’s an absolute must-have for small or large businesses. Whether you need seamless integration with your accounting and tax software or a direct connection to your payment processing platform, be sure to find a checking account that makes your life easier.
FDIC insurance
Security should never be a concern when it comes to your business’ deposits. All reputable business checking accounts––traditional and online-only––are FDIC insured. Confirm that an account comes with this protection by looking through the website or terms and conditions when you apply.
The importance of customer support
No matter how smoothly your business checking account runs, customer service is still important. This should be a major factor when choosing your account because you’ll likely need to contact them at some point, even if it’s just to ask a question about your account features. Quality customer service takes the time to listen and resolve your issues quickly.
The best business checking accounts also offer self-service resources for customers, which can be invaluable if you have a question or issue outside of regular business hours.
5 tips and tricks to quickly evaluate a business checking account
Choosing the right business checking account can be intimidating, but there are steps you can take to make it easier.
1. Sign up for emails
If you’re not in a rush, let the information come to you. This is a great way to find out about all the top account benefits, as well as any special offers or promotions for new customers.
2. Compare fee schedules
Research the accounts you’re looking at online to see if they have publicly available fee information. If a business checking account isn’t transparent about its fees, you might consider doing business elsewhere.
3. Take note of other offerings
Having consolidated services with one bank can make your life easier. Make note of whether your prospective checking account provider also offers business loans, lines of credit, credit cards, or anything else you might need in the near future.
4. Talk to a rep
Get on the phone to feel out how their team works with customers. Reading online reviews can only tell you so much.
5. Ask around
The best advice can often come from people who have also used the business checking account you’re looking at. Ask around your circle to see if fellow business owners have recommendations.
