If you own a small business or have a side hustle, a business checking account is essential. Your business bank account can help you keep your personal finances separate from your business finances. Not only is this good practice, but it can also help you quite a bit come tax time. And besides which, the IRS watches for (and audits) businesses that do not have a separate bank account.
Best Business Checking Account Options
There are hundreds of options when it comes to choosing the best business bank account for you. We’ve put together a list of some of the best small business checking account options. You should carefully consider your choices before deciding, but our list of best banks for small business is a solid starting point.
#1. Bank Novo — Powerfully Simple Business Banking
This simple business bank account is completely online. You can complete all your business through the app or on a desktop. And Novo waives ATM fees if you need to withdraw cash. Some of the standout benefits of banking with Novo include:
- No minimum balance requirement
- No monthly maintenance fees
- ATM fee refunds
- Access to business tools like Slack, TransferWise, Xero, and Zapier
- Free incoming wire transfers
- Ability to mail paper checks free
There is a minimum opening deposit of $50, but that’s relatively low. And since you don’t have to maintain a minimum balance, it doesn’t end up being a huge deal.
#2. Radius Bank — Tailored Checking
I actually use Radius Bank’s Tailored Checking for one of my business accounts. I like that it pays interest on certain balances. And you get unlimited free transactions, as well as waived ATM fees. Some of the standout benefits that make Radius the best bank for small business include:
- Earns interest on balances of at least $5,000
- ATM fee refunds
- Unlimited free transactions
- No minimum balance requirement
There is a minimum opening deposit of $100, which is relatively low. Additionally, there is a small monthly fee of $10. However, if you maintain $5,000 in your account, the fee is waived.
#3. Citizens Bank — Clearly Better Business Checking
This is a solid checking account that adds the benefit of more than 1,000 branches, so you can speak with someone in person, depending on your location. However, it’s also possible to manage your account online. Some of the benefits of the Citizens Bank business account include:
- No monthly maintenance fee
- No minimum balance requirement
- You can grant controlled access to a trusted accountant or bookkeeper
- 200 monthly transactions free
What’s great about Citizens Bank is that it is mostly fee-free. However, you do need to be aware that if you have a lot of transactions, you could start seeing a charge.
#4. Huntington Bank — Unlimited Business Checking
This ranks as one of the best small business checking account because of its unlimited free monthly transactions, as well as some of its resources for small business owners. Here are some of the main perks associated with this business checking account:
For applicants in some states, there’s also a $300 cash bonus promotion. Depending on whether you qualify, you might be able to access this offer.
#5. Chase — Total Business Checking
If you’re looking for one of the “big guys,” Chase offers a solid small business checking account product. Plus, there’s a $300 cash bonus promotion for those who meet certain requirements. Some of the other perks that come with this best business bank account include:
- In-person access to almost 5,000 branches
- Wide ATM network
- Unlimited electronic deposits
- Waived fee if you maintain a $1,500 minimum daily balance
- 100 transactions per month at no charge
The monthly fee for this account is $15, but it’s relatively easy to avoid the fee if you can keep $1,500 in your business account. Plus, you can see a reduced fee if you enroll in paperless statements.
Key Factors to Consider When Choosing a Business Checking Account
While we’ve provided some solid choices for some of the best business bank accounts, it’s important to do your own research and choose a bank that works for you. Some of the things to consider when choosing a business bank account include:
Many banks come with various fees. Some of these are fairly obvious, like monthly maintenance fees, but others may be a little harder to see, like transaction fees. For business accounts, you might see between 100 and 500 free transactions before they begin charging.
If you have a lot of transactions each month, it might make sense to choose an account that offers unlimited free monthly transactions, even if there’s a monthly maintenance fee. Compare the potential costs. Additionally, many accounts that charge monthly maintenance fees also waive those fees if you meet certain requirements.
Check for ATM fees. If a business checking account is mostly online, find out if they reimburse you for ATM fees. This can make a big difference down the road.
In the end, there will probably be a fee somewhere along the line. Consider all your business needs so you can minimize the fees you pay.
2. Benefits and Perks
Don’t forget to consider the benefits and perks that come with an account. Some banks offer access to accounting tools like Xero or provide free cash flow analysis. If you have a bookkeeper that you want to have access to your account, you may be able to give them limited access (just to see the transactions).
Think carefully about what business tools and resources you most likely need and use. Depending on the bank, you may be able to avoid paying for some tools, just because the bank includes access.
3. Customer Service
Sometimes that personal touch matters more than anything else. Check to see what type of customer service options you have. Is there someone you can talk to if needed? Is there an in-app chat? Maybe you prefer to go to a physical branch.
Figure out what matters most to you in a banking relationship and prioritize those items as you evaluate different best small business checking account options.
Why You Should Separate Your Personal and Business Bank Accounts
One of the best practices in business is to keep your personal and business finances separate.
It’s much easier to keep business records when everything is separated appropriately. This is especially true when it comes to tax time. If you have a separate business bank account, it’s simpler to identify your expenses and claim them on your tax return. Plus, if you’re audited, you can easily find documentation for your business expenses. (And the IRS includes commingling of funds — not separating personal and business bank accounts — as one of its audit flags.)
Depending on your business organization, you may have an easier time protecting your personal assets from claims against your business. When you mix your business and personal accounts and assets, you can have a harder time protecting your financing, depending on the type of business you have and other factors.
Keeping things separated is just good practice.
How to Open a Small Business Checking Account
Most business checking accounts will let you get started online. In many cases, you may need the following documentation to move forward:
- Articles of organization or certificate from your state showing you’re a registered business
- Employer Identification Number (EIN) from the IRS
- Address and phone number of the business
- Personal information (Social Security number, address, birth date, etc.)
In many cases, you can upload the documents and provide the information online. Connect a bank account so you can transfer your opening deposit, and it’s pretty straightforward from there.
As long as you have your documentation prepared, it’s possible to open a business bank account fairly quickly and easily. Once that’s done, you can start moving forward with business activities.
Find the Right Bank Account for Your Small Business
When you’re running a business, it’s a good idea to keep your business and personal accounts separate. Consider opening a separate account designed to manage your business income and expenses. You can pay yourself from that account and keep your personal and business expenses separate. This not only makes bookkeeping easier but it is also in line with best practices.
If you qualify for a business account, look for an account that offers features you’ll use and that you know will work best for you. Carefully compare your options and make a choice that is best for your business. And who knows? Maybe your local credit union will have business account options.