Best Business Checking Accounts November 2022
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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.
There are a few reasons . 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.
“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.”
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.
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We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Business owners want to focus on their businesses, not necessarily where to bank, which is why choosing the right business checking account is important. Convenience, not paying fees and having an easy way to bank, should be the priority. Just as businesses are different, so 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. That’s a better scenario for them.”Bankrate s picks for the top business checking accounts
Best for a cash back debit card: Best for free account with no transaction limits: Best for domestic wire transfers: Best for getting a safe-deposit box discount: Best for business perks: Note: Annual percentage yields (APYs) shown are as of Oct. 31, 2022. Bankrate’s editorial team updates this information regularly, typically biweekly. APYs may have changed since they were last updated and may vary by region for some products.A closer look at the top business checking accounts
1 50% APY on balances up to $100 000
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 up to $100,000 and 0.10 percent APY on the portion of balances that are $100,000 and greater. The account also offers businesses free unlimited transactions and does not charge fees to use another bank’s ATM. What to watch for: LendingClub Bank has only one cashless branch, in Boston, according to its website. 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 $500.0 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.non-interest-bearing account earns no APY
Best for: Domestic wire transfers Overview: Capital One has around 300 branches and about 50 Capital One Cafes. 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 Spark Business Unlimited checking account. The first five outgoing domestic wires are free each month, after which $25 will be charged each transfer. The Spark Business Unlimited Checking account allows you to have the monthly maintenance fee waived on up to two Spark Business Basic Checking accounts. No fee is charged on cash deposits of less than $40,000 a month. It also allows unlimited transactions. What to watch for: A monthly maintenance fee of $35 is charged for 30-day or 90-day balances that go below $25,000. The fee can also be waived by maintaining certain other accounts with Capital One. Spark Business Unlimited 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.non-interest-bearing account earns no APY
Best for: Getting a safe-deposit box discount Overview: Regions Bank has about 1,400 branches in the South, Midwest and Texas. Perks: Regions Bank’s LifeGreen Business Simple Checking account offers business owners up to a 40 percent 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 requires only a $100 deposit to open the account. What to watch for: Regions Bank branches are limited to 16 states: Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, Texas and Virginia.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 board-certified doctors and licensed mental health professionals for video and phone appointments. 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.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 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 Other fees Bonus for new accounts Cash-counting fee 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 coinsWhat 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 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
Which bank is best for small businesses
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.
What do you need to open a business checking account
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.What are the benefits of a business checking account
A business checking account should help keep your personal and business banking separate.There are a few reasons . 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.
Do I need an LLC to open an account
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.Can I open a business checking account online
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.Can I open a business checking account at a credit union
Both Federal Deposit Insurance Corp. (FDIC) banks and National Credit Union Administration (NCUA) offer business checking accounts. Some online banks also offer these checking accounts.Can I use a personal checking account for business
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.”
What s the difference between a business checking account and 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.