What Is A Business Bank Account And Why Do You Need One
A business bank account is where you keep your money for the company. Its an account used specifically for the business so, separate from your personal checking or savings accounts where you hold your earnings, pay for related expenses and more.
Keeping these transactions separate is helpful come tax time. If you choose to apply for a business loan or relief funds down the road, youll also need an account to share your financials and house the money.
No matter how big or small your operation is, its strongly recommended that you open a business bank account. At a minimum, a business checking account its a good way to stay organized, period. You want a place to keep track of all the money coming in and out of your business and have a clear-cut record of your finances.
Types Of Bank Accounts For Small Businesses
Selecting a newbusiness bank account and setting it up can seem like a daunting task. There are numerous options to explore all of which have been developed to help you, a small business owner, effectively manage your money. Each type of account has a different purpose. In this guide, we delve into the different types of bank accounts available for businesses, drawing attention to their unique advantages and disadvantages, so you can feel confident that youre making the right decision.
Capital One Business Checking At A Glance
Spark Business Basic Checking
Spark Business Unlimited Checking
$15, waived with a minimum balance of $2,000+ over 30- or 90- day average, whichever is greater.
$35, waived with a minimum balance of $25,000+ over 30- or 90- day average, whichever is greater.
Minimum opening deposit requirement:
Up to $5,000 per month with no fee, after that $1 fee per $1,000 deposited.
Domestic wire transfers:
$15 for incoming domestic wires, $25 for outgoing domestic wires.
Incoming domestic wires are free. First five outgoing domestic wires per month are free, then $25 per transfer.
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Finding The Best Banks For Small Business In 2022
The top banks for small business dont just feature strong business checking accounts. They also offer many different small business lending opportunities and have solid experience handing out business loans. We go over the top small business banking options on the market today.
|KeyBank National Association|
|Bank of America|
The Best Online Business Banking In Summary
Every great bank needs to have online services for business customers. Some banks offer online-only access, while others provide online banking services mixed with physical branches.
If your business takes cash, youll need a bank that accepts in-person deposits. Otherwise, online-only banking can accommodate the needs of most companies, even ones that accept checks and sell products online.
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Why The Northone Business Checking Account Is A Good Option For A Business Checking Account
With NorthOne, you can make deposits and move cash for free, make payments by sending ACH or wire payments from your phone/computer.
A NorthOne Business Checking Account includes the following benefits:
- Mobile banking including check deposits.
- Web banking with backup help from customer support
- Order extra debit cards for your team within the app.
- Free in-app integration with companies like PayPal, Shopify, QuickBooks, Venmo, Uber etc.
- Withdraw cash fee-free from any MoneyPass ATM.
If youre okay paying $10 a month, with no option of waiving the fee, NorthOne Business Checking Account is going to cover your unlimited transactions and banking needs.
What Do You Need To Open A Business Bank Account
Requirements to open a business bank account vary by the financial institution. However, most banks require the following:
- Employer Identification Number or Social Security Number for sole proprietors
- Business formation documents
- Ownership agreements
- Business license
Account signers need to bring their personal identification to open the account. Most banks require an initial deposit to fund the account when it is opened the minimum opening deposit requirements vary by the bankand can be a key factor, along with ongoing minimum account balances, to consider when choosing one.
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Scotiabank Basic Business Account
- Monthly fee of $10.95 a monthwaived if your minimum monthly balance is $8,000 or more
- One free transaction for every $1,500 kept in the account
- Additional transactions charged on a pay-per-use basis. Each check or branch deposit, for instance, costs $1.25.
- Available as a Canadian or U.S. dollar account
Best For Highest Business Checking Account Apy: Lafayette Federal Credit Union
Lafayette FCUs Business Performance Checking account requires $1,000 to open and has a $20 monthly maintenance fee but comes with a 1% APY on balances $1,000 and above. To qualify for the APY, you must either open a Lafayette Federal Business credit card or line of credit or use one or more business service products, which include remote deposit capture, ACH SmartPay, Paychex Payroll or FirstData Merchant Services. This account also includes unlimited transactions.
Small business products and services: In addition to the high APY for its business checking account, Lafayette FCU offers small business owners a basic business checking account that does not earn interest, in addition to money market accounts and CDs. Small business owners can also apply for business credit cards and loans with the credit union, and have the option to offer employee compensation packages through Lafayette FCU, if you enroll your business as a Select Employee Group.
Customer experience: Lafayette FCU requires membership. Youre eligible if you live or work in Maryland, D.C. or Virginia, or become a member of the American Consumer Council for $8 or the Home Ownership Financial Literacy Council for $10. There are 6,000 shared branches nationwide along with an extensive network of fee-free ATMs. You can also bank online or through the credit unions iPhone or Android mobile apps.
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Find The Best Business Bank For You
Opening a business bank account can be daunting, but when you find the right bank for you, itll make even the mundane financial aspects of business easier to manage.
Whether you want a high-tech online bank, an institution with loan options, a bank with credit cards full of reward perks, or a simple bank account to track your companys finances, youll be able to find a bank or credit union to suit your needs. And if you arent sure where to start, consider this list of trusted financial institutions to help kickstart your research.
Originally published Oct 27, 2021 7:00:00 AM, updated October 27 2021
What To Look For In Business Banking
There are several angles you could take to determine the best banks for small businesses, depending on the business needs of your company. To help you choose the best for your business, we focused on three banking services: Small business checking account and business savings account options small business lending, and business credit cards.
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Ology For Bankrates Best Business Checking Accounts
Bankrates editorial team regularly surveys around 70 widely available financial institutions, made up of the biggest banks and credit unions, as well as a number of popular online banks. To find the best business checking accounts, our editorial team analyzes various factors, such as: annual percentage yield , minimum balance requirements and broad availability. All of the accounts below are insured by the Federal Deposit Insurance Corp. at banks or by the National Credit Union Share Insurance Fund at National Credit Union Administration credit unions.
The Best Bank Accounts For Small Businesses
There are more than 4,500 commercial banks in the U.S. offering thousands of business checking account options. But what busy entrepreneur has time to sort through it all? Read the list below for AD PROs best business checking accounts.
Best Bank Accounts for Small Businesses With Sole Proprietors or for Start-Ups
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Is It Legal To Transfer Money From A Business Account To A Personal Bank Account
Yes, it is legal to transfer money from a business account to a personal account. However, if you have partners or shareholders in your company, it is not advisable to make such a transfer without their written consent. All transactions into and out of a business account should be documented for good recordkeeping, tax purposes, and in case of an audit.
Some banks allow you to link your personal and business accounts. Depending upon the legal structure of your business, some banks even allow your business and personal accounts to be viewed on the same online banking screen. This makes transfers between accounts simple and quick.
Business Money Market Accounts
An MMA is an interest-bearing account that blends some of the features of business checking and savings accounts. Most pay a higher interest rate and often include check-writing capabilities and debit cards for ATM withdrawals.
Pros of business money market accounts: Offer insurance, higher interest rates, and more ways to access your money.
Cons of business money market accounts: Require minimum deposits and come with fees and limited transactions.
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Why You Might Not Want To Consider The Northone Business Checking Account
If youre looking for any sort of brick-and-mortar bank, NorthOne is not going to probably be your top choice here. It caters to businesses that want an entirely online experience.
NorthOne also doesnt offer ATM rebates for any ATMs that are out of network. If you find that there arent a lot of ATMs near your, you may want to consider another bank if youre a frequent cash user.
Sasfin Bank Ltd Business Pay As You Use Account
Sasfin is an independent banking and financial services group with locations spread throughout South Africaâs largest cities. Itâs tagline is âbeyond a bankâ and their business accounts aim to personify this idea by providing easy cash management for entrepreneurs with interest and access to a range of features.
You can earn up to 2% interest on your transactional account balances and the bankâs digital platform called B\YOND is a convenient favorite of many business owners. With it you can perform payroll management, send personalized quotes and invoices, set up classifications and transaction tags for tracking and so much more.
Speaking of convenience, you can also apply for your account online, set up multiple users according to their role in your business and link multiple Visa business debit cards at no additional cost.
There monthly administrative fee is R100 for the Pay as You Use option. Check out their brochure to decide if this might work best given your business context.
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Nedbank Small Business Services
Nedbank-Ecobank Alliance is the largest banking network in South Africa and all of Africa. There are 2,000+ branches spanning 39 countries and they lend support to businesses big and small.
Their dedication to enabling small business growth was made evident through the creation of SimplyBiz, a network of like-minded entrepreneurs. It provides useful resources on a variety of business solutions.
With them you have the option of signing up for an account on a pay-as-you-use basis or for a flat monthly fee. The administration fee associated with the former is R60. The Business Bundle 35 and 60 options for medium and high frequency users charges R259 and R420 respectively.
They also offer solutions for daily transactions, loans, investing as well as specialized solutions for areas like agriculture and franchising .
Whats The Difference Between A Business Checking Account And A Personal Checking Account
It is likely to have more restrictions and possible fees, too. For instance, generally in a personal checking account, youll write checks and make withdrawals without tracking how many transactions you make. That is because unlike a business account, there usually isnt a fee based on the number of transactions made or items.
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Wells Fargo Optimize Business Checking
This analyzed checking account is best for larger organizations that have a high volume of transactions and complex cash management needs. The account is supported by Wells Fargos Commercial Electronic Office, which offers treasury information reporting, online statements, customized reports, ACH origination, and online wire transfers. Your business account balance generates an earnings allowance that can be used to offset account fees.
Best Bank Accounts for Small Businesses With High Transaction Volume
Pnc Business Checking Plus
With this PNC business bank account, theres no charge for up to 500 combined transactions per month. With more opportunities to offset monthly account maintenance fee than the companys Business Checking account, Business Checking Plus also offers cash-flow insight and analysis at no charge. You can also earn cash back with PNCs rewards program, and the banks Quick Switch Kit makes it easy to switch banks. Apply online, by phone, or in person.
Td Bank Business Convenience Checking Plus
TD is a great option for the small business who wants a local bank and has moderate to high monthly transaction volume and cash deposits up to $10,000. Though monthly maintenance fees are $25, this can be easily waived by meeting a low, $1,500 minimum balance a personal checking account can be bundled to meet the requirement. TD Bank has locations up and down the East Coast, and many branches are open seven days a week. This bank is also an ideal choice for those doing regular business with Canada as its a subsidiary of the Canadian Toronto-Dominion Bank. One downside: A $3 charge for use of non-TD ATMs.
How We Evaluated The Best Banks For Small Businesses
To determine the best banks for small businesses, we looked at features important to small business owners. We examined their selection of checking and savings accounts, credit cards, loans, and lines of credit, and we looked for competitive rates, low fees, availability of branch and ATM networks, a robust online and mobile banking platform, and a variety of merchant services such as point-of-sale hardware and software.
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Best Banks For Small Business In 2021
Are you looking for the best bank for your business? Weve reviewed the best banks for small business in 2021 and we can help you decide which national online, no-fee, or brick-and-mortar bank is the right choice for your LLC or sole proprietorship.
The Best Banks for Small Business:
Small Business Loans
Wells Fargo: Best For Branch Access And Business Loans
Wells Fargo has roughly 4,900 branch locations and over 12,000 ATMs across 37 states, plus Washington, D.C. the largest branch network in the U.S. making it an ideal choice for small-business owners who prefer to do at least some of their banking in person.
In addition, Wells Fargo is a top bank for business loans, offering competitive financing options, including those with benefits for existing customers. Wells Fargo is also one of the most active SBA 7 lenders: As of September 2020, Wells Fargo approved the most SBA 7 loans of any traditional national bank in the country.
Here are some of the highlights:
Choose among three core business checking account options, as well as additional options based on location and business type.
Limited fee-free monthly transactions and cash deposits included with each account.
Monthly service fees start at $10 per month with the Initiate Business Checking account.
Online, mobile and security banking features included with all accounts.
Extended customer support hours available by phone through the National Business Banking Center.
All business checking accounts can be opened online, over the phone or by visiting a branch.
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Top Small Business Banking Tips
To run a successful small business, owners need to balance the books and plan for their future. However, this isnt always easy to balance alongside working to be profitable. Luckily, your bank may offer more tools and resources than you realize to help you achieve a solid financial foundation.
In todays changing markets, nearly every industry faces challenges and opportunities to achieve these goals. Here are a few small business banking tips that may provide you with the extra edge you need to achieve the best outcome.
Do I Need A Business Bank Account
The short answer? Yeah, you need a business bank account. Keeping your business and personal finances separate is a very good idea for accounting and tax reasons, even for smaller businesses. Plus, it will keep banks from getting mad at you for using your personal bank account in a way they dont want you to.
If you want the longer answer, you can check out our guide to deciding if you need a business account.
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