How To Choose A Business Checking Account (2024)

Business checking accounts can make it easier to separate business spending from personal spending. If you run a small business, are self-employed or earn money as an independent contractor or gig worker, a business checking account is something you may need.

But which one is best for you? Just as with personal checking accounts, choosing a business bank account comes down to finding one that offers the right combination of features, benefits and cost.

What Should I Look for When Choosing a Business Bank Account?

What works for your business may not work for another and it’s important to remember that business checking accounts aren’t all alike. When comparing business bank accounts, including checking and savings accounts, there are several things to consider, including:

• Account features and services
• Interest rates for deposit accounts
• Service fees
• Branch banking and ATM access
• Daily, weekly and monthly transaction limits
• Introductory bonus offers
• Ease of integration

1. Account Features and Services

The first thing to look at when comparing business checking accounts is what’s included at a particular bank. For instance, some of the core features and benefits you may need to run your business include:

• Check-writing services
• Online and mobile banking access
• Bill payment services
• Wire transfer services
• Debit card access
• Safe deposit boxes

Beyond that, however, there may be additional services or features you’re interested in.

For example, if you need help with cash flow management you may want to open a business checking account at a bank that also offers those services. Or you may be interested in opening other business accounts—such as a savings account, money market account or certificate of deposit—and business retirement accounts.

Keeping all of your business accounts in one place could help you simplify the way you manage business finances. Looking at the full range of business banking services on tap can give you a better idea of how good a fit a particular bank may be.

2. Interest Rates for Deposit Accounts

If you’re interested in an interest-bearing business checking account or a business savings account, then it’s helpful to check the rates banks are paying for them.

This is particularly important when APYs are falling. Finding the business bank account with the best rate possible means your money has more opportunity to grow. Of course, it’s important to balance the interest rate you could earn on deposit accounts against the fees you might pay.

3. Service Fees

Business checking accounts can come with a variety of fees, just like personal checking accounts. Some of the most important fees to look for include:

• Monthly maintenance fees
• Minimum balance fees
• Wire transfer fees
• ATM fees and surcharges
• Overdraft fees

Between online banks and brick-and-mortar banks or credit unions, online banks tend to charge fewer fees. But consider what that means in terms of access to your money, since you wouldn’t have the option of managing your account in person.

4. Branch Banking and ATM Access

Having a business checking account at a bank with physical branches can be reassuring if you need one-on-one help managing it. You may also require the convenience of a physical branch if you make daily deposits of cash and/or checks.

Being able to visit an ATM to manage your account or withdraw cash is also a plus. While online banks may offer that, it’s important to check the size of the bank’s ATM network. Otherwise, you could run into expensive ATM surcharges if you need to use another bank’s machine.

When checking the fee schedule, look for the ATM fees a bank may charge for business checking. Also, check to see if the bank reimburses out-of-network ATM fees.

5. Daily, Weekly and Monthly Transaction Limits

With a business checking account, you may be making frequent deposits, withdrawals, bill payments or electronic transfers between accounts at another bank. One thing to check when comparing business checking accounts is what limits the bank imposes on those transactions.

For instance, you may be limited to writing a certain number of checks each month. Or, if you’re transferring funds electronically, there may be limits on the amount of money you can move in a single transaction.

Banks can also impose limits on the number of transactions that can post to your account in a single day. Or, a set number of transactions may be allowed to you—after which you’ll pay a fee for excess transactions.

Finding a business checking account that allows for unlimited transactions may be ideal for avoiding fees if you typically have a higher volume of transactions. If you can’t find an account that offers that, do the math on the fees to see how much going over the transaction limits could cost you.

6. Introductory Bonus Offers

Banks can use introductory bonus offers to attract new customers for personal checking accounts and these offers can also be extended to business checking accounts.

For example, you might qualify for a cash bonus for opening an account and depositing a certain amount of money or making a specific number of direct deposits or debit card transactions. These bonuses can be a nice incentive to open a business checking account at a particular bank.

Just remember to check the fine print so you understand what’s needed to qualify. Also, keep in mind that bank account bonuses are taxable. If you receive one, your bank should mail you a Form 1099-INT and you’ll need to report that on your taxes.

7. Ease of Integration

If you use accounting software programs to manage business finances, then being able to integrate that with your checking account can make that easier. When comparing business checking accounts, check to see what the bank’s capabilities are when syncing up your accounts with your accounting program.

You may also look for other integrations, such as with online payroll software or tax preparation software. The more services you can sync with your business checking account, the more you may be able to streamline the financial part of running your business.

What Is the Best Business Checking Account?

In simple terms, the best business checking account is the one that checks off all the right boxes for you and your business. So for example, that may mean a bank account that:

• Charges few or no service fees
• Offers a competitive interest rate on linked deposit accounts
• Allows for unlimited transactions
• Gives you access to your money at branches and ATMs
• Offers user-friendly online and mobile banking platforms

When choosing a business checking account, first think about what you need the account to do and what features will make it easier to run your business. Then, factor in the interest rates you could earn and the fees you may pay. This can help you find the right balance between services, benefits and cost.

Is a Business Checking Account Necessary?

Technically, you could use a personal checking account to manage business finances. But that can put you at a disadvantage for a few reasons.

First, keeping business and personal expenses separate can make filing taxes easier. If you have business expenses you claim as deductions, having them in a separate account makes it easier to scan your statements or transactions to find them.

Keeping business and personal accounts separate can also allow for added liability protection. And if you process credit card payments through your bank, that can help keep your customers’ information safe and secure.

Having a business checking account could also make it easier to qualify for loans or lines of credit at your bank if you need to borrow money. Your bank may also offer a discount on interest rates or fees for loans if you’re an existing customer with a good banking history.

How to Open a Business Checking Account

If you’re ready to open a business checking account and have chosen a bank, there are a few things you’ll need to do next.

First, determine whether you can open your account online, over the phone or in person. Once you know how to open your account, you can complete the bank’s application. This is where you’ll need to submit the right documents, based on your business type.

Depending on how your business is structured, these may include:

• Your Social Security number and photo ID
• Employer Identification Number (EIN)
• Doing Business As certificate
• Articles of incorporation and/or corporate charger
• Business license

Once you’ve filled out the application and provided supporting documentation, the next step is making your initial deposit. There may be a minimum amount you’ll need to deposit to open your account. Depending on the bank, you may be able to make the deposit via check, cash or electronic transfer.

After your account is officially open, you can work on opening other accounts if necessary, linking existing accounts at other banks, setting up automatic deposits and scheduling bill payments. And if you’re switching banks, remember to double-check and update any recurring payments or deposits and confirm that your old account is closed with your previous bank.