Choosing the right business checking account is very important for a business. This is because an owner wants to concentrate on his or her business, not banking. Convenience, not paying fees and an easy way to bank should all be priorities.
Different businesses are going to have various features that they’re looking for in a business checking account.
“(Business owners) enjoy doing what they’re selling or what their business is all about,” says Kari Harpold, treasury management officer at Capitol Bank in Madison, Wisconsin. “But to have to also do all of the financial end of things…it’s not what they enjoy doing. So if they can just have a good relationship with the bank, where the bank’s handling a lot of that stuff for them, you’re just making it more efficient for them and save some of their time, then that’s a better scenario for them.”
The best business checking accounts of January 2021
- Bethpage Federal Credit Union: Best for free account with no transaction limits
- Radius Bank: Best for a cash back debit card
- Regions Bank: Best for getting a safe deposit discount
- VyStar Credit Union: Best for depositing cash
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Methodology for Bankrate’s Best Business Checking Accounts
Bankrate’s 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 (APY), minimum balance requirements and broad availability. All of the accounts below are insured by the FDIC at banks or by the National Credit Union Share Insurance Fund at NCUA credit unions.
Bankrate’s picks: Best business checking accounts for January 2021
Bethpage Federal Credit Union: Best for free account with no transaction limits
Overview: Bethpage Federal Credit Union has been around since 1941.
Perks: Bethpage Federal Credit Union’s Free Business Checking with Interest doesn’t have a transaction limit. It also doesn’t charge you a monthly service fee and it earns some interest. Everyone can join Bethpage Federal Credit Union with a $5 deposit into a savings account.
What to watch for: It only has branches in New York.
Radius Bank: Best for a cash back debit card
Overview: Radius Bank is an online bank that was founded in 1987.
Perks: Radius Bank’s Tailored Checking offers unlimited cash back of 1 percent and earns 0.1 percent annual percentage yield (APY) on balances of $5,000 or more.
The account also offers businesses the ability to have unlimited transactions for free.
What to watch for: Radius Bank only has one cashless branch, in Boston, according to its website. Businesses that need cash and coin orders often might not want to choose an online bank.
Regions Bank: Best for getting a safe deposit discount
Overview: Regions Bank has around 1,400 banks in the South, Midwest and Texas.
Perks: Regions Bank’s Simple Checking Business account might be an option for business owners’ looking for a safe deposit box discount at a bank.
One way to waive the monthly service fee is by making at least $500 of purchases with your Regions Business CheckCard.
What to watch for: Regions Bank only has locations in the following states:
- North Carolina
- South Carolina
VyStar Credit Union: Best for depositing cash
Overview: VyStar Credit Union has its headquarters in Jacksonville, Florida, and it’s the 18th largest credit union based on assets, according to VyStar Credit Union’s website.
Perks: The VyStar Credit Union Small Business Checking account lets a business deposit $10,000 in cash per month without paying a fee. Other banks or credit unions might have lower limits on depositing cash for free.
This account doesn’t require an opening deposit and it pays interest on daily balances of $2,500 or more.
What to watch for: People that live or work in 49 Florida counties and four counties in Georgia can join VyStar Credit Union. You’ll need at least a $5 opening deposit.
Business checking account features and terms
- Debit card: This card can help you make purchases that are debited from your business checking account. You can also usually use this business debit card at an ATM. Depending on your bank and your business, you might be able to allow one of your employees to have a business debit card.
- Cash counting limits: Your bank might limit the amount of cash that can be deposited into the account without incurring a fee. This affects certain businesses — such as restaurants, grocery stores or convenience stores — more than others.
- Positive pay: This feature allows a business to submit information about the checks that it has written to limit the occurrence of fraudulent transactions. “The customer is able to see an image of that check that doesn’t match for whatever reason up on their computer screen within their online banking,” Harpold says. There’s usually a fee for this service. Positive pay may also be available for automated clearing house (ACH) transactions.
- Bill pay: A business can pay its bills online through a business checking account.
- Remote deposit capture: A business may be able to deposit checks without going to the bank through this service.
- Items: Some business checking accounts may limit the number of items per month. An item may be a check, ACH, cash withdrawal with a teller, ATM withdrawal, debit card purchase or other amount added or subtracted from your account, according to Randolph-Brooks Federal Credit Union’s website.
What to consider when choosing a business checking account
Here are some things to consider before opening a business checking account: Minimum balance requirement:
- Monthly maintenance fee
- Other fees
- Bonus for new accounts
- Cash counting fee
- Free or discounted checks
- Number of free items or transactions
- Proximity to your business. (Especially for businesses that need cash or coin orders often. Or businesses that need to deposit cash or coins.)
What to know about minimums and fees
It’s important to know the minimum balance requirements and fees. Try to find an account that doesn’t charge a monthly maintenance fee or one that has a fee that you can easily get waived. You may be able to waive some fees by staying above a certain balance. Or there may be other ways to avoid a fee. For instance, Regions Bank waives the monthly service fee for those generating $500 or more in Regions Business checkcard and or business credit card purchases.
Business checking account FAQs
Which bank is best for small businesses?
The best bank for a small business will depend on the priorities of the small business. Each small business is going to have different things that they’re looking for in a small business account. It may depend on the type of business or the type of banking services it needs.
A tech-savvy owner of an e-commerce business might opt for an account at an online bank. But a restaurant owner, who needs change orders every day, might favor the bank down the street.
Do I need an LLC to open an account?
A sole proprietorship may be able to open up a business checking account. A Social Security number, Employer Identification Number (EIN) or an Individual Taxpayer Identification Number (ITIN) is needed.
Can I open a business checking online?
You might be able to at certain banks. Certain online banks also will let you open an account online. You may also be able to apply for a business checking account online at a brick-and-mortar bank.
Can I open a business checking account at a credit union?
Both Federal Deposit Insurance Corp. (FDIC) banks and credit unions offer business checking accounts. Some online banks also offer these checking accounts.
Can I use a personal checking account for business?
Rachel Ivanovich, an enrolled agent at Easy Life Management in Carlsbad, California, says it’s always better to keep your business and personal accounts separate and not commingle funds.
“I tell all of my clients, even if you only have a few transactions and it seems silly to have a separate bank account, do it anyway,” Ivanovich says. “In the long run, as your business grows, you’ll be in the habit of keeping your funds separate. And it makes tracking so much easier. It just makes the accounting cleaner and if you ever do get audited, it’s so much better.”
What’s the difference between a business checking account and a personal checking account?
Business checking accounts may have different features, terminology and limits than a personal checking account.
A business account is going to also have different requirements than a personal checking account. It is likely to have more restrictions and fee opportunities, too. For instance, generally in a personal checking account, you’ll write checks and make withdrawals without tracking how many transactions you make. That is because unlike a business account, there usually isn’t a fee based on the number of transactions made or items.
Keeping track of your business’ finances
As a business owner, especially at a small business, you have a lot to keep track of: Bankrate has calculators that may help. You might also opt to use QuickBooks or another software to help keep track of your business.
Bankrate’s Best Business Checking Accounts for January 2021
|Bank||Checking account name||APY||Monthly fee|
|Bethpage Federal Credit Union||Free Business Checking with Interest||0.2 percent APY||None|
|Radius Bank||Tailored Checking||0.1 percent APY*||$10|
|Regions Bank||Simple Checking Business||N/A||$7|
|Security Service Federal Credit Union||Premium Business Checking||0.15 percent APY||$20|
|VyStar Credit Union||Small Business Checking||0.1 percent APY||None|
*On balances of $5,000 or more.