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.
Our Picks for Best Business Checking Accounts Of 2024
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Lili: Best for Overall Features
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Novo: Best for Ease of Use
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Bluevine: Best for Earning Interest
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Relay: Best for Multiple Accounts
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U.S. Bank: Best for In-person Banking
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Found: Best for Self-Employed
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NorthOne: Best for Third-party Integrations
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Found: Best for Gig Workers
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Nearside: Best for Cashback
Best Business Checking Accounts at a Glance
| Provider |
Cashback Rewards |
Monthly Service Fees |
Interest Rate |
| Lili |
Up to 5% |
No Fees |
4.15% |
| Novo |
None |
No Fees |
0% |
| Bluevine |
None |
No Fees |
2% |
| Relay |
None |
No Fees |
0% |
| U.S. Bank |
None |
$0 to $30 |
0% |
| Found |
None |
No Fees |
0% |
| NorthOne |
None |
$10 |
0% |
| GigZter |
None |
No Fees |
0% |
| Nearside |
2.2% |
No Fees |
0% |
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 integrate with business tools to let business owners handle their accounting or payroll directly from their business checking accounts.
On top of offering tools that make it easier to keep your organization operating, having a business checking account is essential 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.
What’s the difference between a personal and business checking account?
A personal checking account is typically used by individual consumers for everyday banking, such as making payments, depositing paychecks, or writing checks. Consumers create personal checking accounts under their name and Social Security number. On the other hand, business checking accounts are in the business’s name and require special documentation like an Employer Identification Number (EIN) and articles of incorporation.
Beyond that, the most significant 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. This type of account allows businesses to make and receive payments and separate their personal assets and finances from the company’s.
Business checking accounts usually have more features than personal checking accounts, such as additional user access, integrated accounting software, and higher withdrawal limits. However, banks may also charge additional or different fees for business accounts, such as transaction fees. Ultimately, the best type of account to open depends on your particular financial needs.
How Business Checking Accounts Work
Business checking accounts provide businesses with the ability to track their finances without difficulty. Through debit cards, online banking, and printed checks, companies can easily access their funds and make necessary payments when required. Business checking accounts have a designated amount of funds available for use, which may result in overdraft fees or penalties once surpassed.
Businesses need to carefully track their spending habits and current balance to avoid penalty fees and help improve business budgeting. Your bank’s customer service team can assist when creating a business account and explain the features offered with that type of account, along with some tips on best practices when managing your money.
What Is a Business Savings Account?
A business savings account is an excellent way for entrepreneurs to save money and earn interest while keeping the funds accessible. Financial institutions, such as banks and credit unions, offer these accounts and feature competitive interest rates depending on the balance and additional features such as online banking and overdraft protection.
By investing money into a business savings account, owners can watch their cash grow over time while having access to liquid funds when needed. It’s a wise investment strategy, especially for small businesses that may not have access to other savings tools such as CDs or related products.
Business Checking vs. Business Savings Accounts
|
Business Checking Accounts |
Business Savings Accounts |
| Minimum Opening Deposit |
$0 to $100+ |
As little as $25 |
| Minimum Balance Requirements |
Varies by bank |
Varies by bank |
| Cash Deposit Limits |
Varies by bank |
None |
| Monthly Transaction Limits |
100 to 500 |
6 withdrawals or transfers |
| Interest Rates |
Up to 1.5% |
Up to 5% |
| Monthly Fees |
$10 to $50 |
$0 |
How Business Savings Accounts Work
A business savings account is an excellent way for a company to accumulate funds to reach financial goals. It provides a safe place to keep the company’s money while keeping it accessible if needed. Generally speaking, a business savings account requires a minimum balance and typically rewards the consumer with higher interest rates than checking accounts.
Business savings accounts usually have features that enable easy management and withdrawal of funds, including specific automated tasks and banking staff help. Some institutions even offer additional services such as financial advice and support so companies can maximize their money in more efficient ways. With flexibility, security, convenience, and rewards, a business savings account can help companies generate wealth and build financial stability.
Reasons to Consider a Business Checking Account
Any business owner who wants to separate their personal finances from their business finances needs a business checking account. New businesses should establish an account as soon as possible to ensure all profits and expenses are clearly tracked and organized, which helps with future budgeting. Additionally, tracking taxes and deductions becomes much easier when sales data is stored in the company’s own financial institution.
These are some of the main reasons to consider a business checking account:
Separate personal and business finances
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 makes tracking your business’s progress easier and can help if you later choose to turn your sole proprietorship into a more formal business or try to get a business loan.
Simplify taxes
With a business checking account, you can separate the money that goes in and out of your company. This means that when it’s time to do taxes, all of your expenses and income will be in one place. It also makes it easier to track deductions if it’s necessary.
Build business banking relationships
On top of that, having a relationship with a bank could be helpful down the road if your business starts to grow.
Easily access funds
By having a business checking account, companies can also easily access funds to pay contractors or vendors or make other necessary purchases that help keep operations running smoothly. And if the need arises for additional financing or loans, it helps to have a separate account that documents the history of transactions and shows banks how responsible your business is with its money. As such, having a business checking account is beneficial for companies of all sizes.
Establish business credit
A business checking account allows you to establish credit for your business. This can help if you plan on taking out a loan, need to rent an office space, or want to buy supplies from vendors who do not accept cash payments. Business accounts also often come with features like merchant services and access to lines of credit that personal accounts don’t offer.
Maximize profits
Businesses should also consider setting up business savings accounts in order to maximize their money and increase profits over time. With higher interest rates and rewards for certain balances, these accounts are great investment tools that can help companies reach their financial goals more easily. Together, a business checking account and a business savings account make managing the company’s finances more straightforward and efficient.
By properly utilizing these two accounts, businesses can keep operations running smoothly while growing at the same time. In the long run, this leads to greater financial stability and success. It’s an excellent way to track business funds and ensure the company is always in a solid financial position.
What to Consider When Choosing a Business Bank Account
Choosing the best business bank account for your company means thinking 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 depositing and withdrawing large amounts of physical currency easy. Consider using an online business bank if you have a purely online business.
Look for some banks with features and tools that appeal to you and your company’s needs. Then, ask other business owners for recommendations, read reviews online, or decide 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. However, some more traditional financial institutions offer free business checking accounts or accounts with no monthly fees.
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Interest rates: In contrast to savings accounts, don’t expect a high interest rate on a business checking account. This is particularly true for businesses with a lot of cash on hand, as the interest earned from high-yield checking accounts can stack up over time.
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Withdrawing and depositing cash: One of the most significant 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 accounts charge a per-transaction fee once you hit a certain number of monthly transactions.
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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 more effortless, 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, starting a relationship with a bank offering business loans or lines of credit might make sense.
What type of bank account is best for business?
The best business checking account depends on the type of business you run and the services you need. There are several factors to evaluate when opening a bank account for your business, including the type of account and financial institution.
Checking accounts are most commonly used for day-to-day transactions and typically have few transaction fees or limits. Savings accounts, on the other hand, are best for businesses looking for competitive interest rates and greater liquidity. Online accounts can be a good option for companies that don’t use or get paid in cash. In contrast, brick-and-mortar business checking accounts might be a better fit for retailers.
Value-added services like merchant services, payroll services, and tax assistance may also influence your decision when choosing a bank account. To determine which type of bank account works best, compare the features offered by different banks and decide which ones will work the best to support your business goals.
Benefits of Having 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.
These are some of the main benefits of having a business checking account:
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Separate business and personal finances: Having a business checking account can help you keep track of business expenses and profits and separate them from personal finances.
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Streamlined accounting: With a business checking account, it’s easier to keep on top of spending and income for tax purposes, simplifying the accounting process.
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Higher limits: Business checking accounts offer higher withdrawal limits than personal accounts, allowing businesses to withdraw cash in bulk when needed without facing any restrictions or fees.
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Increased security: Business checking accounts are typically more secure than personal accounts, reducing the risk of fraud and unauthorized access to funds.
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Easier access for multiple users: Many business checking accounts allow for multiple signatories or users, making it easier to manage large transactions or withdrawals with multiple people accessing the same account.
Cons of business checking
While dedicated checking accounts are important for many businesses, they have disadvantages. These are the main downsides of business checking accounts:
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Fees: Business checking accounts typically incur more fees than personal accounts, including maintenance, overdraft, and transaction fees.
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Complexity: Business bank accounts can be complex for new business owners to understand and manage.
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Low interest rates: Most business checking accounts don’t offer competitive interest rates like savings or money market accounts, meaning you won’t earn much from your deposits over time.
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Lower withdrawal limits: Some banks limit how much cash businesses can withdraw daily or monthly. These restrictions can lead to problems if your business regularly needs large amounts of money for operations or payroll purposes.
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Limited free transactions: Business checking accounts often come with limited free transactions, meaning additional fees will apply for every transfer or purchase you make.
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Minimum balance requirements: Many banks require businesses to keep a minimum balance in their accounts at all times. Otherwise, customers may encounter additional fees.
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Extra housekeeping: Even if you’re using a business checking account, you may still need to keep track of your personal finances separately. This is especially true for sole proprietorships and single-member LLCs.
What Is Needed to Open a Business Bank Account?
Opening a business bank account requires more than just a first deposit. You’ll need to provide official documentation, such as the company’s tax identification number, articles of incorporation, and business license. Additionally, you’ll need to provide contact information in case the bank needs additional requests for records or documents.
To open a business checking account, you’ll need to have a few things, including:
- Personal identifying information
- An Employer Identification Number (EIN)
- Business formation documents
- Ownership agreements
- Any applicable business licenses
Generally, any individual authorized on behalf of the business can open an account; however, the financial institution may require additional verification depending on how the company will use the account and what transactions it will serve. Ultimately, opening a business bank account is essential in ensuring your finances are separate from your personal obligations. With all of these considerations taken into account, though, it shouldn’t take more than an hour or two to open an account and start utilizing it to meet your financial goals.
How to Open a Business Checking Account
Opening a business checking account can be daunting, with many banks requiring official documentation and contact information before you start. The exact steps for opening an account may vary by the financial institution, but there are a few general steps you can follow.
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Identify banks that offer business checking accounts. When selecting a financial institution for a business checking account, consider not only the features of the account but also the size, accessibility, reputability, and customer service. Smaller banks often provide community-level support, while larger banks may offer greater access to ATMs nationwide.
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Compare banking features and reputation. Researching a bank’s reputation via independent reviews and surveys can help you decide whether its offerings fit your needs. Additionally, inquire about minimum opening deposits and ongoing fees associated with the account. Finally, ask about additional services or benefits, such as online or mobile banking capabilities. Making an informed decision based on these components will help ensure you have chosen the right bank or financial institution for your business’s needs.
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Gather the necessary documents and information. A valid state-issued ID, such as a driver’s license or passport, is necessary to prove identity. Additionally, all signers must have their Social Security number when setting up the account. Be sure to ask what additional documents are needed to verify your business’s legitimacy—you likely will need your Employer Identification Number (EIN), articles of incorporation, a list of signers on the account, and a valid form of identification from all signers. Having these documents prepared can make the process enjoyable since you’re better equipped and ready to open your account immediately.
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Visit a branch of your preferred financial institution. Now that you have all the required documents, it’s time to visit a local branch and open your business checking account. Ensure you understand all the requirements for opening and maintaining the account, such as annual fees or minimum balance requirements. When ready, follow the bank’s instructions and complete all the necessary forms. If applicable, you’ll also need to provide proof of your business’s legal registration, such as articles of incorporation. Finally, set up a direct deposit system to easily manage payroll payments.
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Get started with banking. After opening your account, set up online banking access and receive debit cards, checks, deposit slips, etc. Make sure all account holders sign and return the documents verifying their identities.
By following these steps, you’ll be well on your way to establishing and managing a successful business checking account for your company. With the right bank and action plan, you can ensure you’re staying financially organized while operating your business. However, keep in mind that certain banks and accounts may require additional verification depending on how the account will be used and what transactions it will serve.
Frequently Asked Questions
Who has the best business checking account?
Finding the best business checking account for your company can be tricky, as there are numerous factors to consider. It’s essential to compare aspects such as maintenance fees, number of transactions allowed, minimum balance requirement, and access to online banking when seeking the ideal financial partner for your firm. Different companies may prioritize various components in their search procedure—from long-term stability to reaching a large customer base.
Ensure you make an informed decision that aligns with your specific business goals by conducting thorough due diligence before committing to any bank or financial institution. Overall, finding the right business checking account should come down to which offers the features and performance levels that most closely match your needs.
What banks offer free business checking accounts?
Banks that offer free business checking accounts vary from small, local institutions to large, national organizations. Many banks will waive fees associated with business checking accounts if the account meets certain criteria. This can include minimum balances, deposits, or a combination of the two. Additionally, some banks also provide discounts on other services depending on the type and size of the account.
Research your local banking options to determine which banks offer free business checking accounts and what conditions may apply. Consulting experts in banking and related areas can be highly beneficial in making informed decisions regarding the best accounts for an individual business enterprise.
Do I need an EIN to open a business checking account?
Whether you need an EIN to open a business checking account depends on the type of business you are operating. An EIN is required from the Internal Revenue Service for certain types of companies, such as partnerships and corporations. However, if your business is structured as a sole proprietorship or single-member LLC, you likely do not need an EIN to open a business checking account.
Depending on your state and banking institution, even with these simpler business structures, some financial institutions may still require an EIN to open a business checking account—whether to comply with their own policies or for anti-fraud prevention purposes. Ultimately, checking with your banking institution before opening a business checking account is essential to determine what information will be needed.
Can a business have multiple checking accounts?
Yes, you can open multiple checking accounts for your business. A business may need to open multiple checking accounts, depending on the size, scope, and objectives of the company. Businesses with complex financial and taxation needs can use multiple checking accounts to track or segregate different types of transactions. For example, you might have one account where you deposit cash and an online interest-bearing account where you keep most of your money.
The ability to keep track of income and expenses easily in this manner can make it easier for businesses to comply with applicable laws and regulations and have better insight into their finances. Additionally, some entities may be required to maintain separate accounts according to their legal structures or industry regulations. Ultimately, having multiple checking accounts is helpful and valid in many cases for businesses looking to stay organized.
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. Additionally, some insurance policies are tailored to businesses to protect their business and bank accounts against fraud or theft.
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. Check with the bank to make sure your account is protected. Of course, it’s always a good idea to do your own research and determine which type of account is right for your business and what protections they offer.
Can I open a business checking account with bad credit?
Although having bad credit may create an initial roadblock, you can open a business checking account with bad credit. The requirements for opening a business checking account with bad credit may vary depending on the financial institution. However, it’s still possible in many cases.
The attitude of creditors has changed significantly over the past decade, and more banks are willing to cater to non-traditional accounts. It’s important to note that some institutions may require a larger deposit or extra documentation when opening a business account with bad credit. Still, if you are persistent and compare different offers, you can usually find one that works for your situation.
*NorthOne Disclaimer:
North One will now cover fees for ATM cash withdrawals, offering refunds of two withdrawal fees per month for Standard customers and refunds of up to six withdrawal fees per month for Plus customers. Users can reach out to North One’s Customer Care Team within 60 days of the cash deposit transaction, and North One will refund any transaction fees. Some restrictions apply.
North One has eliminated the $20 fee for inbound wires. Receiving any domestic wire now costs $0, and there is no limit to how many wires users can receive each day.
North One is now refunding third-party fees for cash deposits, refunding one deposit fee per month for Standard customers and up to three deposit fees per month for Plus customers. Users can reach out to North One’s Customer Care Team within 60 days of the cash deposit transaction through an in-app chat to get refunded. Some restrictions apply.
