The business checking account you choose matters. Here's what to look for.
Business checking accounts are the foundation of a small business’s financial planning: Once you have one, you can build out everything else your venture needs to succeed.
The best business checking accounts out there today combine easy software integrations and quality customer service with a number of important business-specific features, such as the ability to wire funds, or make deposits.
There are tons of business checking options available to small business owners, and for the most part, they offer many of the same features, but a few really stand out. When beginning your search for the best business checking account, start here.
These are the nine things to look for in a business checking account:
Introductory offers and bonuses
Among many major banks, it’s common to offer new customers an introductory bonus—typically predicated on that customer depositing and maintaining a certain balance in their new account. Chase Bank, for example, offers a $300 intro bonus to customers who deposit, maintain and use their funds to conduct transactions over the first 60 days.
An extra hundred dollars or so shouldn’t be the driving factor when choosing a bank account. But if all other factors are equal, and one bank wants to give you extra spending money in exchange for choosing them? That should help make the decision easier.
More likely than not, your business checking account is going to come with some kind of small monthly charge that the bank assesses as a “service fee.” The more robust the other features on the account, the higher the service fee.
Most reasonable service fees range between $12 to $30 each month. Though a few extra bucks each month may not make a huge difference, it’s usually not worth paying exorbitant fees to keep up your account. Additionally, some banks will offer to waive your service fee if you meet certain criteria, such as a high minimum balance in your account, or signing up for another finance product from the same bank. Be sure to ask what you can do to get your fee waived.
Minimum account balance fees
Many banks don’t install any sort of minimum account balance fees, though they may have a minimum limit you can reach in order to avoid your monthly service fees. Additionally, some banks require a minimum first deposit in order to activate your account and make yourself eligible for bonuses.
The primary function of your business bank account, other than to literally hold your money, is to help you make transactions. A transaction could include cash or check deposits, withdrawals, transfers, and electronic payments.
Because this is such an important facet of your account, it’s important to note whether your checking account allows for unlimited free transactions. If it doesn’t, find out how many transactions are free before your bank begins to charge you. If your bank offers 500 transactions per month before they charge you, but you rarely eclipse that number, the post-500 fee is negligible. If you routinely post more than 500 transactions each month, you should look for another option.
Additionally, note that some banks offer “tiers” of business accounts—with the basic plans charging customers after a certain number of deposits or transactions, and more premium versions offering unlimited transactions.
Deposits fall under the umbrella of transactions, but some business checking accounts specifically count up your cash deposits, and only allow a certain number for free each month before you pay a small fee per deposit.
Keep this in mind if you run a cash-heavy business and tend to make frequent deposits. An account that doesn’t limit your deposits each month would be the way to go if that’s the case.
Sending money from bank to bank traditionally involved using a “wire transfer.” Though these have become less common with the advent of digital payments, a business that still sends or plans to send wires should note how many free wire transfers their bank allows each month, and if a fee will kick in at a certain point.
In-person vs. online services
Do you want a bank that has physical branches you can visit, or do you conduct most of your banking online anyway? It likely depends on what kind of business you run. A business that deals heavily in cash and needs to make in-person deposits at convenient locations will, of course, seek a bank with a local branch. On the other hand, if you have an e-commerce business and conduct all of your transactions online, you may not see the need for a physical branch. Plus, a bank that is online-only typically offers certain perks, such as higher interest rates, that most brick-and-mortar banks won’t match.
Either way, make sure your business checking account provider has robust online banking features, preferably including an app that allows you to check your financials at any time.
Ease of integration
More and more small businesses are using cloud-based software to help with accounting, invoicing, expensing, and other financial matters.
While internet-only banks tend to allow for seamless integration with these other platforms, any good modern business checking account should make integration possible. Check with your bank to make sure that’s the case before moving forward, especially if you’re already planning on using a variety of financial software and apps.
Interest business checking accounts have become a common tool that allows business owners to rack up interest on their business profits. A business savings account may offer higher overall interest rates, but it doesn’t hurt to earn even more interest where you can.
No business bank account will excel at delivering on every factor here, but failing to do your research on each one could result in some unexpected fees or costs that you could have otherwise avoided. Once you settle in with a checking account, you can explore savings accounts, credit cards, and other financial tools that will pave the way towards more flexibility and greater financial stability.