The Best Business Checking Accounts of 2023
A business checking account is essential for every company. The best business checking accounts offer powerful tools that make it easier to keep things running, such as integrations with point-of-sale or accounting software. Understanding what makes a business checking account good and what type of business checking account is perfect for you will help you choose the right one for your needs.
What is a Business Checking Account?
A business checking account is much like a personal one except that it’s designed specifically for companies and their needs.
For example, business checking accounts might be more focused on being able to withdraw or deposit large quantities of cash, making payroll, and accounting tools because those are common tasks. A personal account might focus more on paying bills and ATM access.
Many business checking accounts also include access to other services like fraud protection, cash management, and business lending services. Some banks will integrate with business tools to let business owners do things like handle their accounting or payroll directly from their business checking account.
On top of offering tools that make it easier to keep your organization operating, having a business checking account is important for other reasons.
Keeping personal and business funds separate makes it much easier to keep track of performance. It’s also essential for maintaining the liability protections offered by forming a Limited Liability Company (LLC) or other entity.
Do I Need a Business Bank Account?
Getting a business checking account is one of the first things that you should do when starting a new enterprise. If you’ve formed an LLC or corporation, you may need a new checking account for it or you risk “commingling” your personal and business finances and can put your personal assets at risk.
On top of that, having a relationship with a bank could be helpful down the road if your business starts to grow and once its start growing the business requirement also changes that might lead to switching your business bank account.
If you’re getting your start as a freelancer or sole proprietor, you can use a personal account because there’s no legal distinction between you, the business owner, and your business. However, that doesn’t mean you shouldn’t consider a business bank account.
Opening a business checking account for your company can help you separate your personal and business finances. This can help you track your business’s progress and be especially helpful come tax time. It can also help if you later choose to turn your sole proprietorship into a more formal business or try to get a business loan.
How to choose the best business bank account for your needs
Choosing the best business bank account for your company means taking a few minutes to think about what you’re looking for in a bank account. Every business is different and has different needs.
For example, some companies operate using a lot of cash. If that describes your business, you need a bank that makes it easy to deposit and withdraw large amounts of physical currency. If you have a purely online business, you might want to use an online business bank.
Look for some banks that have features and tools that appeal to you and your company’s needs. Then, ask other business owners for recommendations, read reviews online, or make a decision based on your experience with different financial institutions.
Some factors to consider when comparing banks include:
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Balance requirements: Some accounts require a minimum opening balance, although it’s often quite low. You may also need to maintain a certain balance or meet other requirements to avoid a monthly service fee.
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Fees: Fortunately, online accounts tend to have few and low fees. Still, consider a free business checking account or one with no monthly fees.
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Interest rates: Don’t expect a high interest rate on a business checking account, but you may be able to get something. Particularly for those that keep a lot of cash on hand, the interest you earn from your high-yield checking account can stack up over time.
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Withdrawing and depositing cash: One of the biggest drawbacks of an online bank account is dealing with cash. It’s generally easy to withdraw money from an in-network ATM for free and some banks refund ATM fees. Depositing cash can be more difficult, and is rarely free. If your business frequently uses or receives cash, you may be better off with a brick-and-mortar bank or credit union.
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Transaction limits: Some business checking account charge a per-transaction fee once you hit a certain number of transactions in a month.
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Integrations and ease of use: Having a business bank account that easily integrates with your accounting and payroll systems can make running your business much easier. Some bank accounts even include services for small business owners, like built-in invoicing, ACH payments, budgeting, and financial reporting. Look for other features that can make running your business easier as well, such as employee debit cards and responsive customer service.
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The bank’s other business offerings: Depending on the type of business you’re building, you may want to open an account with an eye toward the future. If you think you’ll need additional financing in the future, starting a relationship with a bank that also offers business loans or lines of credit might make sense.
Best Business Bank Accounts
When choosing the best business bank account for your company, look for an account that offers low or no fees and no minimum deposit requirement to start with. Then, think about your business’s unique needs and whether features like interest payments, ATM fee reimbursements, or access to lending services are important to you. That can guide you to your final choice.
Best High-Interest Checking: BlueVine Business Checking
BlueVine started as an online small business lender, offering invoice financing and business lines of credit. It recently launched an online-only business checking account, which stands apart from other business bank accounts with its relatively high interest rate and lack of fees.
It’s easy to set up an account online, and there’s no minimum opening balance or monthly balance requirement.
In fact, BlueVine only charges two potential fees: $15 for outgoing wires and $30 if you want express delivery for a replacement debit card.
BlueVine's 2.0% annual percentage yield (APY) on all balances up to $250,000 may be particularly attractive if you tend to keep a lot of cash in your business account. While there are a few other business checking accounts that offer interest, they generally have a higher balance requirement and lower interest rate. Many don’t offer any interest at all.
Pros
Cons
- There may be a $10,000 limit per 30 days on mobile check deposits
- Up to $4.95 in third-party fees for depositing cash
Frequently Asked Questions
What is required to open a business checking account?
To open a business checking account, you’ll need to have a few things, including:
- Personal identifying information
- An Employer Identification Number
- Business formation documents
- Ownership agreements
- Any applicable business licenses
What are the benefits of a business checking account?
Business checking accounts are designed for the needs of businesses, meaning your organization will get access to useful tools like payroll and accounting integrations. Having a separate business bank account also lets you keep your personal and company funds apart, which makes tracking your company’s performance easier. In some cases, a separate checking account is required to maintain the legal protection of forming a business.
When is the right time to transition to a business checking account?
Considering many options have a low—or no—opening and monthly balance requirement, you should open a business checking account as soon as you start your business.
What’s the difference between a personal and business checking account?
Personal bank accounts are opened in a person’s name, while business bank accounts are opened in a business’s name. Beyond that, the largest distinction is that business bank accounts may have business-specific features, such as the ability to send an invoice, get an employee debit card, or business credit cards. However, banks may also charge additional or different fees for business accounts, such as transaction fees.
What’s the best business checking account?
The best business checking account is going to depend on the type of business you run and the services you need. Online accounts can be a good option for businesses that don’t use or get paid in cash, while brick-and-mortar business checking accounts might be a better fit for retailers. In either case, consider the accounts’ benefits, features, and fees.
Can a business have multiple checking accounts?
Yes, you can open multiple checking accounts for your business. For example, you might have one account where you deposit cash and an online interest-bearing account where you keep most of your money.
Are business bank accounts insured?
The Federal Deposit Insurance Corporation (FDIC) insurance, which insures up to $250,000 per person, per bank, can apply to business bank accounts as well. You can check with the bank to make sure your account is covered. If you open an account with the credit union, you may be covered by similar insurance from the National Credit Union Administration (NCUA) rather than the FDIC.
Can I open a business checking account with bad credit?
Yes, you can open a business checking account with bad credit. The bank will check your credit and may place additional restrictions on the account, such as limiting overdrafts or not extending a business line of credit.
