- A business bank account for startups is designed to keep personal and business finances separate, offering low or no minimum balance requirements and monthly fees.
- Business bank accounts offer integration with startup apps, tools for payroll and expenses, and may improve loan eligibility.
- Required documents for opening a startup business bank account include an EIN or SSN, business formation documents, licenses, and government-issued ID.
- When choosing a startup business bank, prioritize free or low-cost business checking accounts and consider efficiency tools, software integrations, and additional financial products.
Every startup should have its own bank account. The first thing you do when founding a startup is open one. It helps you keep your personal and company’s finances separate and gives you access to valuable business banking services.
Choosing the best bank account for a startup business can be difficult, so this guide will cover everything you need to know.
Best Business Bank Account for Startups
Which Business Bank Accounts is Best for for Startups
Chase: Best Overall Bank for Startups with Full-Service Banking
If you're running a startup and prefer a traditional full-service bank, Chase is a top choice. It offers three business checking options, each with the potential to waive monthly fees as your business expands. This flexibility makes it one of the standout small business checking accounts available.
Chase doesn't stop at checking accounts; it also excels in lending products, including credit cards and lines of credit. Plus, it offers point-of-sale solutions and software. For more comprehensive needs, J.P. Morgan, a part of Chase, provides commercial lending solutions, such as commercial real estate loans. They also offer payment services, cash flow management, commercial credit cards, and merchant services.
So, whether your startup requires just a business checking account or a complete suite of business banking products and services, Chase has you covered.
Novo: Best Digital-Only Bank for Rapid Access to Funds and Faster Payments
Novo is a fantastic banking choice for startups that regularly receive payments through Stripe. Their Novo Boost product speeds up payments from your Stripe account compared to other providers. Plus, Novo offers Express ACH, enabling same-day ACH payments, which is a huge advantage.
If your startup frequently needs cash from ATMs, Novo is ideal because it refunds all ATM fees at the end of each month. You also get up to 10 reserve accounts, unlimited invoicing, and seamless integrations with accounting and payment software. While ordering checks isn't an option, you can send paper checks through the app.
Novo doesn't charge for cash deposits, but the process involves purchasing a money order and depositing it through the app. The only downside is that Novo doesn't offer any lending products. Overall, it's an excellent choice for startups, particularly those making frequent ATM withdrawals.
Mercury: Best Digital Bank for Larger-Scale Incorporated Startups
Mercury is a fintech banking option designed with startups and tech companies in mind. Their checking and savings accounts are completely free, with no minimum deposit or balance requirements.
One standout feature of Mercury is their Vault product, which extends your FDIC insurance to up to $5 million through partner banks and a sweep network.
They also offer Treasury, an interest-earning account available to customers with at least $500,000 in Mercury accounts. Currently, it's earning up to 5.43% APY, with expectations of increasing as the prime rate goes up.
Mercury provides the IO Mastercard, granting an automatic 1.5% cash back on all purchases. Their software integrations are top-notch, and they have a perks page where you can promote deals for your business on the Mercury website.
Most US-incorporated businesses are eligible for an account, except for sole proprietorships and trusts.
The downsides are the inability to deposit cash and a lack of lending products, apart from the credit card and a venture capital term loan program. Nevertheless, Mercury is an excellent choice for startups seeking a digital-only bank.
Bluevine: Best for Earning Interest on Smaller Balances and Best Business Line of Credit
For startups seeking an online-only financial provider with interest-bearing checking and a top-notch line of credit, Bluevine is a smart pick. You can earn a 2.0% APY with their business checking for balances up to $250,000, as long as you either spend $500 a month with your debit card or receive $2,500 in customer payments monthly.
Bluevine stands out for startups thanks to its absence of monthly fees, transaction fees, minimum opening deposit, and minimum balance requirement. They also offer seamless software integrations and provide two free checkbook orders annually.
Now, you can make international payments through Bluevine, covering 32 countries in 15 currencies. Payments in United States dollars (USD) incur a $25 fee, while payments in other currencies have a $25 charge plus 1.5% of the payment amount. Check out Bluevine's website for more details.
Cash deposits come at a cost of $4.95 per transaction, only doable at Green Dot retail locations. Additionally, Bluevine charges $2.50 for out-of-network ATM withdrawals on top of any third-party fees. If your transactions are predominantly digital and not cash-based, Bluevine is an excellent choice for your startup.
U.S. Bank: Best for Free Business Checking with a Traditional Bank
For startups seeking a traditional bank with free business checking, U.S. Bank is an excellent choice. While they previously operated in just 26 states, they have expanded their business checking accounts to be available nationwide.
With their basic business checking, known as Silver Business Checking, there's no monthly fee. You'll enjoy 125 free transactions each month and up to $2,500 in free cash deposits.
If you regularly exceed these thresholds, U.S. Bank offers two higher-tier accounts. While there are monthly fees for the Gold and Platinum Business Checking accounts, they come with more free transactions and additional benefits.
Bank of America: Best for Ongoing Rewards and Low Cash Deposit Fees
Bank of America is another exceptional traditional bank choice, providing various checking options and comprehensive business banking services. They offer two business checking accounts with monthly fees that are easily waivable.
Moreover, you can collaborate with your business banking advisor to determine the appropriate time to switch between these accounts. Additionally, Bank of America provides up to $500 in combined cash back and credit card statement credits as part of its ongoing rewards program.
With their preferred rewards for business, you can earn bonus rewards ranging from 25% to 75% on credit cards and enjoy a 5% to 20% higher interest rate on business advantage savings accounts.
Bank of America also offers excellent business savings accounts, CDs, lending solutions, and financial analysis through Merrill financial advisors. They encompass all the essential products and services your startup needs to thrive.
Found: Best Digital-Only Provider for Self-Employed Startups
For freelancers or self-employed professionals in need of startup banking, Found presents an excellent choice. It's an all-in-one solution that integrates bookkeeping directly into the app, making it especially valuable for single-owner startup businesses looking to manage their finances efficiently.
The integrated accounting software empowers you to categorize expenses, capture receipts, and establish custom rules through the app. You also enjoy unlimited free invoicing, and these invoices can be personalized with your company's logo and colors. Payments for these invoices can be received through various payment apps like Cash App, PayPal, Square, Venmo, and eBay.
Found's app also includes contractor management features, enabling you to request and oversee W-9s, 1099 payment reports, contractor tax forms such as 1099-NECs, and more. Moreover, you can make cash deposits at over 79,000 retail locations listed within the Found app, although this may involve a fee. Additionally, once your account is approved, you can deposit checks.
Found's fee-free business checking account doesn't impose transaction limits and provides robust tax tracking and preparation software. You can even complete and submit your Schedule C directly from the app and make tax payments conveniently.
Some of Found's advanced features are exclusively available in Found Plus, priced at $19.99 per month or $149.99 annually. With Found Plus, you also benefit from interest-bearing checking, earning 1.5% APY on balances up to $20,000.
It's important to note that Found is a financial technology company and not a bank. Banking services are offered through Piermont Bank, an FDIC member.
Grasshopper: Best for Earning Interest on Larger Checking Balances
Grasshopper, a digital-only bank tailored for startups, stands out for offering the most competitive interest-bearing checking account among all fintech options in this guide. You can earn an impressive 2.25% APY, and the best part is there are no minimum or maximum balance requirements. On top of that, you receive 1% cash back on all online and in-person debit card purchases.
To enjoy the APY benefits, customers are only required to maintain an average balance of $10,000 with no instances of nonsufficient funds (NSF) over the previous 12 calendar months.
Grasshopper goes the extra mile by allowing unlimited transfers, including free wire transfers, whether domestic or international. The bank doesn't impose monthly fees or transaction limits.
Notably, Grasshopper seamlessly integrates with QuickBooks and provides Autobooks to every customer at no cost. Furthermore, you can make free ATM withdrawals at over 45,000 MoneyPass and SUM ATMs, and their robust mobile app is fortified with modern APIs to empower your startup.
One of the few limitations is that Grasshopper doesn't accept cash deposits. To open a business checking account, you'll need an initial deposit of $100, but there are no ongoing minimum balance requirements once the account is established.
Lili: Best for Startups Needing Digital Tax Preparation Assistance
Lili is an excellent choice for startups and freelancers, primarily due to its impressive business checking product and an integrated tax optimizer within the app. However, Found slightly edges out Lili, mainly because of the more robust features available in the free version of the app. Nevertheless, both options are highly commendable.
If you decide to upgrade to Lili Pro, you'll unlock access to the tax optimizer, enabling you to monitor potential write-offs and utilize a tax bucket to set aside funds. Additionally, you can scan receipts, complete your Schedule C directly within the app, and generate quarterly and annual expense reports.
Lili offers a free checking product called Lili Basic. For $9 a month, you can upgrade to Lili Pro, which includes enticing perks like 1% cash back rewards, fee-free overdraft protection up to $200, a savings account with an impressive 4.15% APY on balances of $100,000 or less, and the capability to create and send unlimited invoices.
Both Lili Basic and Lili Pro provide you with a debit card, the option to access direct deposits two days early, built-in expense tracking, and most importantly, no hidden fees.
Relay: Best for Streamlined Financial Management and Startups with Bigger Teams
Relay stands out as an online banking and money management platform, earning its spot among the top choices for small business banking. It excels due to its remarkably low fees, exceptional flexibility, positive customer feedback, and valuable integrations for accounting and payment processing.
Relay provides two business checking account options, both with appealing features such as no monthly checking account fees, no minimum balance requirements, the ability to have up to 50 virtual or physical debit Visas, and the convenience of managing up to 20 business accounts or sub-accounts to simplify budgeting and financial management.
Furthermore, Relay offers a respectable selection of third-party integrations, including popular platforms like Quickbooks Online, Xero, Expensify, Gusto, Plaid, and Venmo. These integrations enhance your ability to streamline various aspects of your business finances and operations.
What is a Business Bank Account for Startups?
A business bank account is a special type of bank account designed for startups and other businesses rather than individuals. Startup founders can use these accounts to keep their personal and business money separated.
Checking accounts for startups also offer business-focused services. For example, they might integrate with popular accounting software or offer tools that make it easier to accept credit card payments or run payroll.
Some banks focus on startup companies. Startup bank accounts typically involve low minimum balance requirements and monthly fees. Many founders start with no employees, so these accounts often focus on sole proprietorships.
Pros and Cons
There are both advantages and disadvantages to using a business bank account for startups.
For startups, one advantage of these bank accounts is that they often have low or no minimum balance requirements. They also keep monthly fees low.
Startups usually don’t have large reserves of cash to stick in a bank account, which means that avoiding these requirements and costs can be a huge help.
They are also designed with startup business and their owners in mind. You may be able to get some forms of assistance from the bank, such as easier underwriting for loans, assuming you can show them that you have a solid business plan.
A startup-focused bank might not offer everything that a larger company needs. While it could be the correct fit right now, if your startup grows you might outgrow your bank account.
That would make you choose between sticking with a less suitable account or dealing with the headache of changing to a new bank.
Many of the best bank accounts for startup businesses are offered by online banks.
This can be a pro if you’re running an online startup but also a drawback for physical companies. If you’re dealing with large amounts of cash, online banks often have no way to deposit that cash or make you pay fees to make deposits.
Benefits of Business Bank Accounts for Startups
Business bank accounts come with a lot of nice features for startup businesses.
For example, many will integrate with popular startup apps. You can use these integrations to make it easier to accept payments or handle bookkeeping and taxes.
Business bank accounts also usually have tools to make it easier to handle payroll and pay your suppliers. They may even offer expense management tools, automatic scheduled payments, and the option to organize your funds into buckets for different purposes.
Some business banks are also lenders. If you have a business bank account, that might make it easier to qualify for a loan from that bank, which can be an important source of funds to grow your business from a startup to an established company.
What You Need to Open a Business Bank Account as a Startup
Opening a startup business bank account is a lot like opening a personal bank account.
- Employer identification number (EIN) or Social Security number if you’re a sole proprietor
- Fictitious business name certificate or DBA certificate
- Business formation documents
- Organization documents, including your ownership agreements
- Business licenses
- Government-issued photo ID, such as a passport or driver’s license
You can apply for a business bank account in-person at a branch or over the internet. Give the bank your personal info, your business’s information, and show the documents to prove that the business is properly organized.
Typically, this process can be finished in just a couple of minutes.
Each bank will have different policies surrounding monthly fees and minimum opening deposits. Try to choose a bank that offers no minimum balance requirements and no monthly fees.
How to Choose a Startup Business Bank
The best banks for startups often provide a free or low-cost business checking account, which is crucial for keeping your personal and business finances separate when launching a new venture. This should be your starting point when selecting a bank for your startup. Beyond that, consider the following:
- Tools for Efficiency: Look for banks that offer built-in bookkeeping and invoicing software or dashboards to streamline your financial operations and track expenses.
- Software Integrations: Ensure your business bank account seamlessly integrates with popular business software like QuickBooks or Zoho, even if you plan to outgrow the built-in tools.
- Additional Financial Products: Explore banks that offer business credit cards, business lines of credit, or startup business loans to support your business at various stages of growth.
- Deposit Protection: Given recent bank failures, it's essential to safeguard your deposits. Splitting your deposits across multiple banks keeps you within the FDIC-insured cap ($250,000 per depositor, per institution, per ownership category) and provides emergency access to funds.
- Sweep Accounts: Consider banks in the IntraFi Network that offer services like Insured Cash Sweep® (ICS) or Certificate of Deposit Account Registry Service (CDARS). These services spread your deposits across various financial institutions within the network, ensuring full FDIC insurance on substantial deposits.
- Cash Management Accounts: Some accounts, like the one provided by Brex, function similarly to sweep accounts and are suitable for startups with substantial deposits in the millions.
Remember that separating your finances, accessing essential financial tools, and protecting your deposits are vital considerations when choosing a bank for your startup.
The institutions mentioned in this list are well-equipped to assist your startup with comprehensive banking solutions in its initial stages of development. They provide excellent business checking accounts along with a range of additional business products and services. To make an informed choice, assess your specific business requirements and select a provider that aligns most closely with your needs.
Frequently Asked Questions
1. What do I need to open a startup business account?
If you own a startup, you’ll need to provide the bank with your personal info, your startup’s information (including its Employer Identification Number), and any organizing/founding documents. Most banks also require an opening deposit.
2. Do I need a bank account for my startup?
While a startup doesn’t strictly require a bank account to operate, it’s usually a good idea to open one.
Startup bank accounts help keep your startup’s funds separate from your personal money. That makes it easier to track income and expenses. It’s also necessary for some forms of startup, such as LLCs, if you want to maintain their liability protections.
3. What business information do I need to open a startup business account?
If you’re running a startup, most banks will let you open a business bank account if you can provide documents showing that you’ve officially formed the startup. That usually means filing forms or documents with local or state governments. You’ll also need a tax ID for your company, such as an Employer Identification Number.
The bank may also ask for info like the line of business you’re in or annual revenue and expenses.
4. Do banks give money to startups?
Acquiring startup business loans can be challenging, but having a bank account can boost your chances. Banks are often more willing to lend to startups they have an established relationship with. This highlights the importance of opening a business bank account. It not only facilitates your financial transactions but also helps build your business's credit history and reputation with the bank. As a result, the bank is more likely to consider lending your business the necessary funds. Otherwise, you might find yourself seeking alternative options, like high-interest rate and fee-laden easy business loans.
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