Compare business checking accounts

How to choose a business checking account for your needs

Keep these factors in mind when shopping around for a business checking account:

• Monthly fee. Most business checking accounts have monthly maintenance fees that are only waived if you meet certain deposit or transaction requirements each month. But there are a few free business checking accounts out there.
• Opening deposit. Some small business checking accounts require significant initial deposits, while others don’t require any deposit at all. Be sure you can meet the opening deposit requirement before applying for an account.
• Accessibility. Does the bank allow you to move your money around via its website or mobile app? Or does it require you to visit a brick-and-mortar branch to transfer funds? The more accessible your money is, the more freedom you’ll have to focus on building your business.
• Cash deposits. Not all business checking accounts make it easy to deposit cash. This is especially true about online-only banks, which are becoming more and more popular. If your business accepts cash as a form of payment, make sure it’s easy to deposit that cash in the bank you choose.
• Transaction limits. Some accounts let you make an unlimited amount of deposits, withdrawals and transfers. While others limit how many business transactions you can do in a month and charge you a fee if you go over. Look for an account that supports the number of transactions you typically make.
• Account integrations. If you have employees, you’ll want to choose a bank that works seamlessly with your payroll system. And if plan to make itemized deductions on your taxes, your banks system for reporting transactions can have a big impact on how easy that is.

What are the pros and cons of business checking accounts?

Keep these pros and cons in mind when shopping around for large to small business checking accounts:

Pros

• Keeps business finances separate. Having a business account makes it easier to file taxes and protects your personal assets in the event of a lawsuit.
• Has features designed for business owners. Many banks offer perks such as payroll integrations, personal access to a business banker and business lines of credit.
• Supports multiple users. Many small business checking accounts allow you to give employees access to the account if needed, and some even let you control how much access they have.

Cons

• High fees. Business checking accounts are notorious for having high monthly fees. But thankfully most banks waive these fees when you keep a certain amount of money in your account each month.
• Transaction limits. There are a few business checking accounts with unlimited transactions. But most put a cap on how many transactions you can make and how much cash you can deposit in a month. If you go over this limit, you typically pay a fee each time you make an additional deposit.

3 most common business checking account fees

There are a few fees that are common across most business checking accounts. The most common include:

How to open a business checking account

Once you’ve found a bank or credit union that seems like a perfect match for your company’s needs, follow these general steps to open a business checking account.

1. Visit the bank or credit union’s website, and choose the account that’s best suited to your business.
2. Select Apply now, Get started or Open an account.
3. Provide your personal information, including your name, address, phone number etc.
4. Enter details about your business and its income.
5. Create a username and password to access your account.
6. Link a funding source if necessary to make your first deposit.

Required documents

Depending on the type of business you operate, different financial institutions may require different documents when opening your checking account. In general, you should have these documents on hand whether you’re opening an account online or at a physical branch.

• Driver’s license
• Social Security card
• Business license
• Operating agreements
• Partnership information
• Articles of incorporation
• IRS forms
• All amendments

Can you open a business checking account with bad credit?

If you have poor credit, opening a business checking account may be more challenging but not impossible. Banks will check the ChexSystems report to determine what your past banking history looks like. Your credit will matter more if you open a business account as a sole proprietor. If you’re denied a business checking account, you can look at second-chance business accounts that have less strict criteria for opening a business bank account, but they usually come with fees and may not offer features like overdraft protection.

Should I keep my personal and business checking accounts separate?

It’s always recommended to keep business and personal expenses separate for tax purposes. It can also help protect you from personal liability if something happens with your business.

4 additional business products to consider

Aside from a bank account, your business may also benefit from:

1. Business savings accounts.Opening a savings account for your business helps you build up cash reserves so you have money for unexpected expenses, a rainy day or a cash infusion when you’re ready to expand your offerings.
2. Business credit cards.These credit cards are linked to an account that is intended primarily for business expenses and can be valuable instruments in managing your cash flow. If used strategically, these cards can be good tools to earn interest by putting your money in a savings or cash management account during the interest-free period of your credit card. It’s also good to note that these cards can earn points.
3. Niche accounts. Some banks will offer tailored accounts for certain industries like agriculture or online sales.
4. Business loans. If your business plans to expand in the future, you may be able to get a better deal by using a bank you already have a business account with. Keep in mind that many financial institutions won’t lend to business owners who don’t have a dedicated business account.

Bottom line

A business checking account helps your small business keep track of finances and simplify tax season. To find the option that’s right for you, compare bank accounts from different institutions.