Best Business Checking Accounts: Compare Banks & Apply

Compare best business checking accounts

What is a business checking account?

Business checking accounts are used primarily for business purposes. You might use yours to pay your vendors and receive payments from your clients. This lets you keep your personal and professional finances separate. A business account also typically operates under the name of your company, which lends your brand an extra dose of legitimacy.

Who should get a business checking account?

Business checking accounts are suitable for anyone who has a business, no matter the size. You can get a business account as a sole proprietor, as a single-entity LLC or as a huge corporation. Even freelancers, nonprofit organizations and professional product resellers could benefit from a business account that draws a firm line between personal expenditures and revenue tied to business income. That is important for anyone who wants to avoid any financial mix-ups, but it’s absolutely essential for companies that answer to stockholders or donors that require complete transparency.

You might want your own business checking account if you:

• Are launching a start-up soon
• Work as a freelance writer, graphic designer or photographer
• Are a gig worker, such as driving rideshares or delivering food
• Have an online business, like selling crafts on Etsy
• Run a nonprofit, such as a community center or food pantry
• Invest in real estate, such as owning rental properties or flipping fixer-uppers
• Run a service-based business, like a law or consulting firm

Why should I get a business checking account?

Business checking accounts provide a number of key benefits:

• Streamlines your accounting and tax-filing responsibilities
• Makes your company more credible
• Can help you be in compliance with industry-specific regulations
• Helps shield your personal assets from professional debts/lawsuits
• Establishes a paper trail for your business, which could be helpful if you later want to apply for a loan or credit card

How to compare business checking accounts

Before you partner up with a new bank, learn how to identify good business checking accounts. To do this, you’ll need to compare accounts using criteria like monthly fees, accessibility and miscellaneous benefits.

How much does a business checking account cost?

An offer for a free business checking account sounds well and good, but what does “free” really mean? Ask about the fees listed below to see whether you’ll be on the hook for a load of extras or if there really is a business checking account with no fees right around the corner.

Checking account fees to look out for:

What limits does this business checking account impose?

Small business checking accounts have their benefits, but some limits make it challenging to run your business.

Some limitations include the following:

• Transaction limits. Limited monthly transactions could leave you paying fees just to deposit or withdraw money.
• No or limited cash deposits. Not all business checking accounts allow cash deposits. If you deal in lots of cash, a no-cash account could be extremely inconvenient.
• Withdrawal limits. If you frequently make cash withdrawals, look for accounts with no withdrawal limits and plenty of cash access points.

How do you want to access your money?

Theoretically, you can access your money via cash withdrawal, wire transfer, checks or digital banking to transfer funds without ever touching them, similarly to business money market accounts. However, the exact options you have could depend on the type of bank that hosts your account.

Brick-and-mortar banks are usually the most diverse, but you may be charged for transactions beyond a certain threshold. Online-only banks are more likely to have limited access points, but the fees are often lower and the transaction limits higher.

Does the checking account add value to your business?

Before you decide on a small-business checking account, ask yourself these questions to see if it’s going to add value to your venture:

• Does the account offer room for growth so you can scale your account alongside your business?
• Does it earn any interest? If so, is the APY competitive?
• Does it include tools and app integrations that make sense for your needs?
• Are there promotions, such as welcome bonuses or free subscriptions, that you find useful?

How to open a business checking account

To open a business account, you’ll need to provide your:

• Registered business name
• Business type (e.g., sole proprietorship or LLC)
• Business address and phone number
• Social Security number (SSN) or employer identification number (EIN)
• Ownership information and signed documentation from your partners, if applicable for joint checking accounts
• Government identity for account holders
• Basic financial information/estimates

You may need to provide other documents too, such as a copy of your business license or incorporation papers.

You can usually sign up for an account online or, if dealing with a traditional bank, in person.

Can you get a business checking account with bad credit?

You can open a business checking account with bad credit, but you may have fewer options. It often depends on what your ChexSystems report says about your overall banking track record. If you have a clean banking history with minimal bounced checks, forced account closures and overdraft fees, you’re far more likely to be approved.

Is a high-yield business checking account worth it?

High-yield business checking accounts operate just like basic checking accounts while also generating interest based on your account balance. Some checking accounts, like the Bluevine Business Checking Premier Plan, can earn up to 4.25% on balances.  But in many cases, you’re better off opening a separate high-yield savings account with up to 5.00% APR versus counting on the much lower 1.00% APR you might get through high-yield checking.

Alternatives to business checking accounts

If you’re not sure you want to open a business checking account, there are some other options that can help you organize your finances.

Business checking vs. business savings accounts

Business checking accounts are tailor-made for frequent transactions. You can withdraw and deposit money on a regular basis without (hopefully) incurring too many fees. Business savings accounts are places to stockpile money while it generates interest. For that reason, savings accounts tend to have low withdrawal and transaction limits.

Business checking vs. personal checking accounts

Use business checking for business expenses and your personal account for personal expenses, such as rent, groceries and vacations. Keeping personal and professional funds separate makes it easy to tackle your accounting, calculate taxes and safeguard against lawsuits and debt collectors.