As an entrepreneur, you’d understand why it’s almost important to have a business checking account. Even as a small business owner, it can be pretty daunting to choose the best one.
Most of your cash flow and financial management would probably get done online or through apps. Yet, certain business transactions will still call for a local branch visit. A good online user-interface along with a nearby bank branch are some of the factors you should look for!
Moreover, you’d want to minimize bank fees for obvious reasons. No one wants to pay a huge amount of their hard-earned profits in the form of financial charges.
I’m here to make sure you make the right decision in choosing a business checking account. This article compiles a list of the best possible accounts that you could open for free. Each of them has different strengths and weaknesses, so just pick the one that works best for you!
The list features free options but some have paid upgrades that you can avail if you choose to. So, let’s get into it. 😃
1. Discover Bank – Cashback Debit Account
It’s been around for quite a while, and it’s a favorite of many small business owners. They don’t exactly offer a business account to be opened with them but hear me out. You can use a personal checking or savings account which would suffice all your business needs too.
With Discover Bank, only the deposits with the account holder’s legal name get accepted. If you’re a freelancer or a sole-proprietor, this would work out perfectly for you.
What makes them special though? Well, here’s the best part; you’ll be able to earn cash backs on your business purchases! Each month, you can get 1% cashback on debit card purchases of up to $3000.
Speaking of a debit card, you’ll get one along with your free ‘Discover Bank’ account! The account is totally free to open and you don’t even have to pay any monthly charges. You’ll also get unrestricted access to over 60,000 ATMs! 😯
2. CIT Bank – Premier Savings Account
If you need to use a checking or personal savings account for your business income, CIT Bank could be a great choice. They offer an account called the ‘business profit’ account. It’s designed particularly for the typical needs of a budding business.
It’s a premier savings account that comes with a variety of thoughtfully designed features. You could put aside money for bonuses, or save for significant re-investments. You’ll get a decent interest rate on your savings as well! Small business owners can appreciate all the help they can get in saving for investments.
Moreover, CIT Bank’s customer service is known to be super helpful to its users. You’d hardly ever have security relates issues. Their mobile app also comes in handy! You can use it to check your balance, transfer money, or even deposit checks! 👍
3. PayPal Premier or Business – Online Account
You can also dodge checking accounts by opening a Business or Premier PayPal account.
A PayPal account can serve you in the same ways as a regular bank account would. If your services like QuickBooks or FreshBooks, you could select PayPal as a payment option for business clients! Use your PayPal funds in the same way as normal bank balance.
PayPal would even issue a sleek-looking debit card to your name, that’s linked to your PayPal account. You’ll also be able to earn small interest income on your PayPal balance! This is similar to what you’d get with most other business checking accounts as well.
The best part about using PayPal to substitute a regular bank? You don’t have to pay a single penny for it. No annual fee, no monthly charges, no hidden fees!
If you receive checks from your business clients, don’t worry. Just take a picture of the check with PayPal’s app and you’ll get funds deposited in your account soon. This could take up to 2-3 business days, but the balance will definitely show up!
You’ll be able to print out earnings reports, profit/loss reports, transfer funds, and pay bills. Anything a regular bank account allows you to do, a PayPal premier account would too – and more! 🙌
4. Chase Bank – Total Business Checking
S&P Global ranks Chase Bank as the largest bank in the United States! It’s also ranked as the sixth-largest bank around the globe. You may not directly have a benefit from how ‘big’ of a bank they are, but it makes them reliable. No bank rises to the top of the list for nothing! You can count on Chase Bank to never let you down when it comes to basic banking needs.
Another benefit of being the largest bank in the US is that there’s a huge number of branches in the country. You probably have a branch super close by to the office, which is always convenient.
Having a business checking account with Chase is free, but with a condition. If you maintain a balance of $1500 every month, the account is free. Otherwise, you get charged a $10 fee monthly.
It lets you make up to 200 international bank transfer transactions for no additional fees. You also get to deposit amounts adding up to $7500 for no extra cost!
Based on your needs, choose from the two checking account tiers offered by Chase.👇
1. Chase Performance Business Checking
With this account, you get to make 350 transactions and deposit up to $20,000 for no additional fee. It’s the next level up in business checking accounts. There’s a $20 monthly fee here, but that gets waived if you maintain a minimum balance of $50,000.
2. Chase Platinum Business Checking
This option suits large corporations and businesses well. It’s the most expensive option out of all three that Chase offers. With a $95 monthly account fee, you wouldn’t opt for this option unless you get it waivered. That’s only possible by maintaining a qualifying balance of $100,000 or more. Each month, you get to make 500 transactions and deposit up to $25,000 without extra charges.
You’ll generally have to find local branches of Chase Bank to open an account with them. However, as mentioned above, their branches aren’t hard to find at all. Not only are their branches scattered around in the US, but also around the globe!
You can keep track of your income, expenses, and balance through their app and website. With great software and many ATMs across the country, you’ll hardly have any complaints.
5. TransferWise Borderless – International Account
If you’re a freelancer or like to travel a lot – an account restricted to one country wouldn’t work. You’ll need something that enables international clients to make payments to you easily. An account that’s with you wherever you travel. Well, TrasnferWise brings you just that.
TransferWise is a company that converts 40+ currencies. It offers a way for users to spend their money wherever they are, through a borderless debit card. With a low conversion fee and no transaction charges, you can use it internationally! Check them out here for more details about what they offer.🕵️
Business Bank Accounts to Avoid
Just like any other product or service, bank accounts also have good and bad variants. Putting a few hours of research into this pointed out a few accounts you should stay away from. These accounts are just not suitable for business owners in any way. Reasons may include a dead-slow online UI, a crappy customer service, security, etc.
Here are a few of these bank accounts that aren’t recommended at all;
- Ally Bank
Don’t get me wrong, it’s still a great option to open a ‘personal account’. However, using it for receiving freelancer income and getting deposits may not be advisable. It’s a problem if they ever find out you’re getting paid through websites like PayPal or Fiverr. They’ll just shut down your account, for whatever reason.
- Capital One Spark Business
Even though they offer a great bank account that comes free of cost, the customer service is useless. You could spend weeks to get your account processed after it’s already opened.
- Suntrust Business Checking
Suntrust users are commonly heard complaining about a website that’s hardly ever up. Their mobile application never works either. If you can’t live without online banking (and you probably can’t), never choose them.
Things to Keep in Mind While Finding the Best Business Checking Account
There are quite a few things you should consider before finally making a choice. Make sure it’s super simple to use. Also, the monthly fees shouldn’t be over the top.
If you travel a lot, you’ll need funds to be accessible easily. This makes online banking needs even more crucial, so make sure you keep that in mind. I’ve listed some other factors to look at when you’re finding the best business checking account. 🧐
1. Open individual bank accounts
The need to open a separate bank account for your business is undeniable. This applies even if you’re a sole proprietor, where all the business profit belongs to you anyway. It’s just going to reduce your headache by a hell of a lot.
You’d create a fine line between professional income and expenditure, and personal transactions. While you might not see why that’s necessary, just do it. It’ll be especially useful during tax season! Your business income would need to get segregated from other sources. Audits and IRS checks also go a lot smoother when they don’t have to poke through your personal transactions to track the business income and expense.
2. Open the account under your business name
By being able to run an account under the name of your company, your business gains credibility. Contractors and freelancers working with you find it easier to trust you! 😇
3. Sync your accounting software
You could also sync your accounting software to the business checking account. This makes it almost effortless to get monthly and yearly report printouts. With personal transactions out of the way, you won’t have to worry about categorizing and stuff.
If you still don’t have an efficient bookkeeping software, check out QuickBooks Self-Employed!
4. Consider whether you really need it
Keep the type of your business in mind when you’re finding the right checking account. For instance, suppose you’re a freelancer who’s a sole-proprietor. You wouldn’t necessarily need a dedicated ‘business’ checking account, would you? This is because tax laws don’t consider a sole-proprietor business as a separate legal identity. But, if you run a company, that’s a different story.
Point being, if the business is small enough, separate accounts may be unnecessary. You can save significant financial charges if you just make do with your personal account.
5. Watch out for monthly fees
See if there’s a monthly qualifying balance that has to be maintained to waive the monthly fees. Make sure the minimum balance required is low enough for your business to sustain. If not, keep looking for banks that offer better deals!
6. Consider the requirements and formalities
There numerous formalities that come with opening up a business checking account. Is it a company or a sole-proprietorship? Have you got a Tax ID or are you still using your social security number? Questions like these determine the required documentation for opening up an account.
7. Look at the ATM and branch locations
Are bank branches nearby? Can you find ATMs without having to look around too much? You don’t want to keep paying a fee to use ATMs that are outside the network of your bank. Make sure you choose a bank that has an ATM and a bank branch nearby! 💸
8. Monthly transaction limits
Don’t forget to consider the volume of free transactions allowed every month. But the importance of this point is subjective to different businesses. Is your business the kind where transactions are super rare? Or is it the complete opposite, where you need to make tens of them daily? Depending on how many transactions your business needs, you may get lower or higher rates!
9. Look for perks and bonuses
Business checking accounts that offer bonuses and perks for business owners are great! You can also get a better deal if you open an account with your business credit card holding bank.
If you use credit cards properly, they can be a great way to produce start-up funds. Look for cards without annual fees, that let the customer implement spending thresholds. A good credit card holder also provides security in case of the card falling into the wrong hands.
Make sure to check out these articles as well 👇