Opening a business bank account is essential for any business owner who wants to keep their personal and business finances separate. It allows you to manage your finances flawlessly and is a critical step in establishing your business. However, choosing the right business bank account can be a frustrating and overwhelming task, particularly for small business owners. This article serves as a guide to help you understand the pros and cons of various business bank accounts, highlight beneficial features for entrepreneurs, and aid in selecting the perfect bank for your business.
Comparison of the Top Business Bank Accounts
There are several banks that offer services for business accounts. Comparing these banks side-by-side will assist you in determining which one fits your business, based on features, fees, and account types. Here’s an in-depth look at five of the top business bank accounts available:
Chase is one of the larger banks, with over 4,700 branches. As a business account holder, you’ll have access to 16,000 ATMs and over 4,700 branches across the United States. The account doesn’t have a monthly fee, and there’s no minimum balance requirement. However, it charges fees for some transactions, such as cash deposits over $5,000.
Wells Fargo business accounts come with their unique features, including the ability to integrate third-party programs such as QuickBooks. There’s a monthly fee of $10, but it is waived if you maintain a minimum balance of $500 or make ten or more debit card purchases per month. Wells Fargo also offers overdraft protection for your checking account.
Bank of America
Bank of America offers a range of account options, including small business accounts, commercial accounts, and business checking accounts with guidance. Bank of America’s Business Fundamentals Checking has a $16 monthly fee, although this can be waived if you meet specific criteria such as spending $250 in net purchases using your debit or credit card. They have a network of ATMs available for their customers.
Citizens Bank Business Advantage Plus account is an excellent account option for small business owners looking to grow. There’s a monthly fee of $25, and it briefly waives any charge for the first three months. There is a minimum balance requirement of $5,000 to avoid the monthly fee. They offer a variety of banking options and have a broad ATM network available.
PNC Bank offers a business checking account which has no monthly account fee. To qualify, you need to have an average account balance of $500 per statement period. PNC also provides an online business banking resource center, which is great for small business owners. They have more than 9,000 ATMs with a broad network available for their customers.
Best Banks for Small Business Owners
The banking requirements of small businesses differ from larger corporations. Small business owners need business accounts with flexible features, account fees, and interest rates designed to match their small business needs. Here are our top picks for the best bank accounts for small business owners:
Capital One offers low annual percentage rates which are ideal for small business owners who want to build up their credit. They also provide a range of account options that include no-monthly-fee accounts depending on your business’s requirements. Capital One also offers attractive sign-up bonuses for new customers and valuable rewards for account holders.
Chase has a free account option for small business owners and offers both long-term savings accounts with attractive interest rates and credit card options with cash-back rewards. It offers various digital banking features that allow you to manage your accounts online or on a mobile app and has a large ATM and branch network available.
Bank of America
Bank of America offers two options for small businesses, one of which features a flat $18 monthly fee which can be waived if you maintain a minimum balance or fulfill specific criteria like electronic deposits. Bank of America also offers many digital features for account management plus attractive rewards programs for debit and credit card holders. They have a wide network of ATMs available with near-instant setup options making starting banking with them very convenient.
Wells Fargo offers various account types with unique features, including tools to help small business owners manage their cash flow. They have a comprehensive suite of banking products backed by years of experience and have over 7,400 branches nationwide. They offer personal and business banking products, including credit cards and loans, and have mobile and online banking features available.
A Guide to Choosing the Right Business Bank Account
Choosing the right business bank account for your company is critical to its overall financial success. The following are critical considerations to keep in mind when selecting an account:
Type of Business Account
Different types of business accounts match specific requirements. Understanding the different types of accounts can help you select the account that best suits your company’s needs.
Bank fees can add up quickly and can significantly impact a small business’s bottom line. Feasibility of Business checking accounts should consider essential services and weigh up additional fees.
Minimum Balance Requirements
Some banks have minimum account balance requirements to open and maintain an account. Not meeting the balance requirements can result in a charge for having increased benefits.
Benefits of Choosing a Digital Business Bank Account
While traditional banks will always have their unique perks, digital banks are quickly gaining popularity with their innovative solutions and features. They usually offer low fees and unique features, including access to tracking and accounting tools, real-time payments, and enhanced security features.
No Account Maintenance Fees
Unlike traditional banks, digital banks have lower overhead expenses.
Exceptional Customer Service
Digital banks usually offer customer service through a user-friendly, reliable online or mobile app in case of any inquiries or issues. This service is innovative and efficient, designed to match the fast-paced environment of businesses in the digital age.
Easy Integration with Accounting Software
Online banking systems are built with useful financial management tools that integrate with accounting programs like QuickBooks, Xero, and FreshBooks. This feature makes it easy to track your business’s finances, view your business’s financial performance, and generate insightful reports that aid in strategic decision-making.
Top Business Bank Accounts for Startups
Startups have unique requirements that traditional banking systems may not fulfill. Although some of the previous options may be suitable for startups, the following are some of the best banks and account types for startups:
US Bank Silver Business Package
The US Bank Silver Business Package has no monthly maintenance fee, a free debit card, and an easy-to-use online banking system. The package also comes with US Bank mobile banking, bill payment, and account alerts to keep up with the pace of a startup’s requirements.
Citizens Bank Clearly Better Business Checking
With no monthly maintenance fee and a minimum opening deposit of $100, the Citizens Bank Clearly Better Business Checking account is a top contender for startups. You also have access to over 3,100 ATMs available nationwide.
How to Open a Business Bank Account
The steps for opening a business bank account vary by bank, but the following are the typical requirements:
Gather Appropriate Business Documents
You’ll need various documents like your company’s registration certificate, a business license, identification documents, and an Employer Identification Number (EIN) from the IRS.
Compare Business Checking Accounts
Do some research to determine which banks would be a good fit based on your company’s needs and size.
Apply for an Account
Submit an application to the bank, and you may need to visit your local branch to complete the process. You’ll need to provide necessary documents and personal details.
Selecting the right business bank account is critical to the overall success of your business. Consider the bank’s features, fees, account types, and reviews from current and past customers. Based on the analysis in this article, we would recommend choosing a bank with low fees, an accessible ATM network, and digital features designed to maximize the performance of startups and small businesses.