As a business owner, the right business bank account can help you streamline your finances. The wrong account can add unnecessary roadblocks at every turn.
But with business bank accounts being offered by so many institutions, including traditional and online banks, credit unions, and fintech companies, how do you choose a business bank account with the right features and at the right price?
In this article, I’ll review the factors to consider when shopping for a business bank account. I’ll also compare some of the most popular business checking accounts currently available.
Why You Need A Business Bank Account
Operating a business of any size involves some level of banking activity. And while it might be tempting to run your business earnings through your personal account, that’s a perfect recipe for a headache.
Here are a few reasons to open a business bank account:
- Divide personal and business expenses: Funneling your business transactions through a separate account makes it easier to manage your personal and business finances.
- Tax time: Tax time can be a big headache if you don’t have your business and personal expenses separated.
Factors to Consider When Choosing A Business Bank Account
When looking for a business bank account, you’ll quickly realize there are many accounts to choose from. As you wade through your options, keep the following factors in mind:
- Fees: No one wants to deal with unnecessary bank account fees. Read the fine print of any bank account before you open it to avoid signing up for too many fees.
- Accessibility and convenience: Some business owners want to work with a bank that offers physical branch locations. Others don’t need to bank in-person. Determine what level of access you want before you select a business bank account.
- Customer service: If you run into questions while managing your account, you’ll want responsive customer support. Read some customer reviews to gauge the helpfulness of customer service.
- Online banking features: Online banking features can make your life easier, especially when it comes to account integrations. If you use business accounting software, try to find a bank account that offers seamless integration with payment and bookkeeping apps.
- Account types: Your banking needs may include a checking account, savings account, merchant services, credit cards, loans, etc. Consider working with a bank that offers everything you are looking for.
- Transaction limits: Some bank accounts have transaction limits. Estimate how many transactions your business currently uses before moving forward with a bank account with a low number of included transactions.
Steps to Opening A Business Bank Account
When you’re ready to open a small business bank account, here are the steps you’ll need to follow:
- Prepare your business details: Have the necessary paperwork ready. Banks often require legal documentation of your business entity and an EIN.
- Compare banks and accounts: The right business bank account will look different for everyone. As a business owner, you’ll need to compare your options to find the perfect fit for your situation.
- Application process: You may need to provide some additional information before the bank can send off your application. And your account might be opened immediately, or take a few days.
Once your account is open, you can start conducting transactions and access the additional features, such as online banking, automated transfers, or any bookkeeping options.
Comparison Of Popular Business Bank Accounts
Not sure where to start looking? Here’s a breakdown of some popular business checking accounts. I’ve included the APY offered, if any, at the time of writing:
Minimum Deposit Requirement
Earn cash back when you spend
Designed with freelancers in mind
Navy Federal Credit Union
Focus on veteran businesses
Navy Federal Credit Union Review
The Bottom Line
Opening a business bank account is an important step in taking your business to the next level. It’s an indication that your business is no longer just a hobby, or a fun side hustle in your spare time.
But it pays to do the proper research, to make sure you’re choosing a bank account that can meet the needs of your business, and help you save money. If you are ready to get started, take a look at the best business checking accounts today.