A business account is crucial for any entrepreneur. It’s a smart way to keep your personal and company finances separate, and can also give you access to additional features and benefits which make it far easier to manage your day to day business cash flow. There are many different business checking accounts out there, including products from familiar brick and mortar banks, and newer specialist options from online banks.
While many banks advertise free business checking accounts, it’s important to read the small print thoroughly before you sign up. You might well find that free simply means that there is no monthly maintenance fee — but that the account still comes with substantial costs for transactions such as making check deposits, and sending or receiving wire transfers.
Do some homework, taking into account how you intend to use the account, to find the best account for your business. This article covers a range of the top accounts for small business owners in 2019, to help kick-start your research.
As soon as you need to make or receive any payments on behalf of your business, you need to set up a separate account for company use.
This can help you keep track of your business finances, pay taxes more easily, and ultimately avoid legal problems down the line. Business bank accounts also often come with features which are not available to personal customers, such as access to business loans, professional advice for small business owners, and company credit or debit card facilities.
It’s essential to spend some time thinking about what the right business checking account for you might look like. You can then research the different products available, including familiar options from larger banks, and some alternative online accounts for convenience and business friendly perks.
You’ll also want to look at the small business checking accounts offered by your home bank. Some banks offer special deals for entrepreneurs who manage both their personal and business accounts with them — and it can be convenient to only need to deal with one institution for both work and home banking.
Here are a few other points to consider when choosing the right bank account for your business.
Before you get too far into your research it’s worth considering what sort of service you want your account provider to offer you. Do you need a physical branch nearby - for example, to make cash deposits on a regular basis? Or, do you need a 24/7 phone service because you work irregular hours and might need support on evenings or weekends? Is it important to have a personal, face to face contact at your bank — or is fast electronic and phone communication enough for your needs? By answering these questions, you can narrow down the range of providers which might suit you.
Many business checking accounts ask for a minimum opening deposit to get your account up and running. You’ll often need to take this in, as a check or cash deposit, on the day you visit the branch to open your account. Make sure you’re happy with the minimum opening deposit requirements for the account you’re considering — you don’t want to tie up too much of your cash, which may be better used elsewhere.
As well as the opening deposit amount, you might find your chosen account has a minimum average balance requirement. In many cases, if you hit this average balance over the month, you’ll avoid the service fee, and may also get other additional benefits such as free transactions. Miss the average balance, however, and it can mean you incur more charges than you’ve planned for. Working out what your realistic average balance will be over time can help you choose the right account for you.
Naturally you’ll want to review the account charges before you sign up. Finding the right option for your company might not be as simple as looking for the cheapest transaction fees. Some small business checking accounts come with a fixed number of transactions rolled into the monthly fee, while others have ways to earn credits - often based on the amount of money you hold in the account during the month - to offset against your charges. Check out a few different account products to see how each fee structure might work for you.
It’s common for business accounts to offer some transactions for free — or as part of the monthly fee you pay. Look at which type of transactions are covered, to see how this will work for your business. For example, accounts might allow unlimited free electronic deposits, but have a strict limit on the amount of cash you can deposit before paying fees. If you run a business dealing with cash often, this might not be the best option for you. Similarly, if you trade internationally and need to make or receive frequent cross border payments, you might find these are not covered by the free transactions in the account package.
Another good thing to look at, is whether your chosen account offers any specific support for entrepreneurs and small businesses, such as the option to integrate your account with your existing software, make batch payments, or use an open API to automate regular workflows. With these options, your business account can save you time as well as money. Check out the TransferWise borderless account for business, as one option which includes smart perks for busy business owners.
Here are a few of the best brick and mortar, and online banks for small businesses. Not all banks offer their services to all locations, so check out the options for your state when you’re doing your research.
Chase offers a tiered range of business checking accounts, from the Chase Total Business Checking Account, with a monthly fee of only $15, to the Chase Platinum Business Checking, which comes with a monthly fee of $95. Monthly fees can be waived by hitting eligibility requirements such as holding a minimum monthly balance, and all accounts come with mobile and online banking, business debit cards and access to a large ATM network.
Bank of America offers 2 small business checking accounts — Business Fundamentals Checking, and Business Advantage Checking. These accounts have monthly fees of $18 and $29.95 a month respectively — but in both cases there are a range of ways you can avoid the monthly service fee, and still access the account benefits. For example, you can spend over a set threshold on your business debit or credit card, or hold above a set average minimum balance across all of your eligible Bank of America accounts.
Bank of America has a good branch and ATM network — including some 16,000 free to use ATMS in the US. You’ll get online and mobile banking options, and depending on the product you choose, could also integrate your account with your existing business accounting software.
Citibank business banking products are not available in every state, so it’s important to check availability, terms and costs in your home state before you get too far into your research.
If Citibank is an option for you, it’s worth considering, in part because Citibank accounts come with an impressive network of some 60,000 fee free ATMs in the US. There are 4 different business account products, from simple accounts for companies making a very small number of transactions per month, to more sophisticated account structures which might suit established businesses with more complex accounting needs.
Azlo is a digital banking service which lets entrepreneurs open a fee free account with no minimum deposit amount. Because it’s an online account, you can get set up without visiting a branch, and manage your money on the go from your phone or computer. There’s also the option to link the tools you use already, such as PayPal, Stripe and Square.
You can send ACH payments, and receive domestic and international wires to your account. To make international payments, Azlo lets customers link their account with TransferWise to access low fee secure cross border transfers with the google exchange rate. If that doesn’t suit you, you might consider getting a TransferWise borderless account for business, instead. More on that later.
The best business account for you will depend a lot on your personal preferences, and the needs of your specific business now and as it grows. Here, we have picked out a few of the most popular accounts for different business needs, from smart online accounts you can operate on the go, through to more complex products which would suit larger companies.
Our choices here take into account the bank’s branch and ATM network size, the type of fees — and how easily you might be able to avoid them — as well as the extra perks and offers you might find thrown into the mix when you open your account. Don’t be afraid to do your own research to find the right account for your company, using these ideas as a starting point — finding the perfect small business checking account for you is a real investment which will pay off in future.
If you work in a digital environment, selling goods or services over the internet, then an online account might be an obvious choice. These smart new account types typically allow customers flexibility, and come without the constraints of many traditional accounts.
To get you started, here are 2 great online business account options:
Azlo offers digital banking services, and entrepreneurs can sign up online for free. There’s no monthly fee to pay, and you can manage your money on the go using your phone. With your account you’ll be able to get a checkbook and debit card, use the app to find fee free ATMs, and send and receive ACH payments. You can also custom make your own invoices, to send to clients. You can’t use your Azlo account to send international payments at this point, but you can link to a TransferWise account and make cross border transfers that way instead.
TransferWise is a financial service provider, rather than a traditional bank. While TransferWise accounts are regulated in the same way as banks are, and use similar security, they operate online for convenience. Because they use smart new technology, and don’t have the same overheads as a regular bank, TransferWise can charge less for many services.
The TransferWise borderless account for business is a multi-currency account which lets you hold over 40 different currencies all in the same place. You can pay international invoices using the google exchange rate, and with just a small transparent fee, and get paid like a local with your own bank details for the US, UK, Australia, New Zealand and the euro area.
Open an account online for free in just a few steps, with no minimum balance, no monthly fees, and smart options like Xero integration, digital statements and an open API to automate payments.
If you don’t want to have too much of your cash tied up in your account’s minimum balance, it pays to shop around. There are accounts out there with no minimum balance requirement at all — and some accounts which still allow you to avoid a monthly service fee by hitting other criteria, such as using your business debit card frequently, or having a personal account with the same institution.
Here are a couple of accounts to consider:
The Chase Total Business Checking account offers 100 free transactions a month, with up to $5,000 in cash deposits also fee free. If you hold a linked Chase Private Client or Chase Sapphire Checking personal account, you don’t need to hold any minimum balance to avoid the monthly fee.
Chase has a network of over 16,000 ATMs in the US, and some overseas, too. Use the handy tool on the Chase website to find an ATM or branch near you. Withdrawals from non-Chase operated ATMs in the US will cost $2.50, or $5 for international ATM withdrawals. There’s also a 3% exchange rate adjustment fee to pay for any international card purchase or withdrawal which is not made in US dollars.
The Business Fundamentals Checking account doesn’t have a fixed minimum balance to operate the account, although holding a set minimum amount over the month is one of the ways you can avoid paying the $18 monthly maintenance fee. What makes this account attractive, though, is that there is a range of different ways to dodge this service fee.
You might choose to adhere to the minimum balance criteria — which includes either an average monthly balance of $5,000, a minimum daily balance of $3,000, or a combined average in eligible Bank of America accounts of $15,000. But you can also have the fee waived if you spend $250 or more using your linked business debit or credit card, or if you enroll for the Preferred Rewards for Business program. This flexibility gives more ways to avoid the service fee - and could leave you with more to reinvest in your company.
Larger and more established businesses have different needs compared to new businesses and startups. You might find you need to make more transactions, but your average monthly account balance is higher, for example.
Here are some good options to consider, if you have a growing business which needs a little more from a business checking account:
This is the Chase business checking account with the largest number of free transactions — and the highest minimum balance and service fee. The monthly fee for this account is $95, but this is waived if you have an average monthly balance of $100,000 across qualifying business accounts. For this cost, you get 500 fee free transactions, $25,000 of cash deposits for free, free incoming wire payments, as well as the 4 most expensive outgoing wires without charge.
Once you have used your 4 free outgoing wire payments, the costs are $25-35 for a domestic transfer, and $50 for any international wire arranged at a branch. Transferring US dollars abroad online costs $40, with international payments in a foreign currency $5 per transfer, or fee free for amounts over $5,000.
This account is a little different to many small business accounts, in that it does not offer interest or a fixed number of transactions per month for the fee you pay. Instead, you earn credits based on the balance you hold and the way you use the account over the month, which you can offset against the account charges you incur. This can make the Citibusiness Checking Account a good option for more complex businesses which make a lot of transactions and use multiple cash management solutions.
The account comes with unlimited free check writing and is covered by FDIC insurance.
The good news is that there is definitely the right business bank account for your needs out there. It may take a little time to find it, but by thinking carefully about what will work well for your company, and investing a bit of time in research, you’ll be able to choose an account product which gives you what you need now, and in the future as your company matures. Don’t forget to check out the options from traditional banks as well as online and alternative accounts like the TransferWise borderless account for business to see which will work best for you.
- Chase business checking account page
- BoA small business checking accounts
- Citibank's everyday business checking accounts comparison page
- Azlo main page
- Azlo support page on connecting account with TransferWise
- Azlo features page
- TransferWise business account page
- Chase business banking fees and services
- Citibank's business checking accounts page
All sources checked on 10 June 2019
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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