Choosing the Best Small Business Checking Account for Your Business

One of the first things you’ll have to do when starting a small business is to open a checking account.  As you begin to generate revenue and invoice customers, it’ll be important to keep your business income and expenses separate from your personal income and expenses.

Also, if you are taking out a small business loan or receiving a small business grant, you will need to have a business checking account to deposit the funds into. If you haven’t already, it may also be a good idea to speak with a small business accountant on what the best corporate structure will be for your business.

Choosing the right checking account can be a daunting task for a first-time entrepreneur. It can be difficult to navigate through the numerous account options, as they can vary in terms of fees, features, services, and policies. Below we will take a look at some of the major banks and what their accounts have to offer.

Bank of America

Bank of America is the largest bank in the US, and as such, it’s one of the first banks that anyone thinks of when opening a new account. Among other perks, many people choose BOA because they have reasonable fees and many physical locations. There are two options for business checking accounts, each with benefits to your business.

Business Fundamentals Checking

This small business checking account works well for new businesses or those that keep a low balance.

What It Offers:

  • $17 per month maintenance fee that can be avoided
  • Second business checking account for $12 per month
  • Free Business Investment Account
  • Account management with flexible tools and QuickBooks integration for $15 per month

You can avoid the monthly maintenance fee in the following ways:

  • Spend $250 in net new purchases on a business debit or credit card
  • Maintain an average monthly balance of $5,000
  • Maintain a minimum daily balance of $3,000
  • Maintain a combined average monthly balance of $15,000 or more in linked Bank of America business accounts

Business Fundamentals Checking Pros:

  • Maintenance fee can be avoided
  • User-friendly online banking
  • Offers rewards program
  • Many physical branch locations

Business Fundamentals Checking Cons:

  • After 200 transactions, $0.45 fee per transaction
  • After first $7,500 in cash deposits, cash handling fee of $0.30 per $100
  • Many added fees

Business Advantage Checking

This Business Advantage checking account will work well for those who spend over $2500 a month on their business cards or keep a higher average monthly balance. This account includes all of the features of the Business Fundamentals Checking, with a few additional premium benefits.

What It Offers:

  • $29.95 per month maintenance fee that can be avoided
  • A second business checking account is free
  • Business Advantage Savings Account for no cost
  • Account management with flexible tools and Quickbooks integration included

The monthly maintenance fee can be avoided in the following ways:

  • Spend $2,500 in net new purchases on a business credit card
  • Maintain an average monthly balance of $15,000 or more
  • Maintain a combined average monthly balance of $35,000 or more in your linked Bank of America business accounts
  • Actively use Bank of America Merchant Services and/or Payroll Services

All in all, Bank of America offers solid checking account products, and the fees can be avoided by spending or maintaining an appropriate balance.

Business Advantage Checking Pros:

  • The monthly fee can be avoided
  • Many physical branch locations
  • User-friendly online banking
  • Advanced features

Business Advantage Checking Cons:

  • Low-interest rates
  • Added fees

Wells Fargo

Wells Fargo is another well-known bank with many physical locations around the United States. They offer three different small business checking accounts.

Simple Business Checking

This plan is best for home-based or smaller businesses with low cash flow activity. It includes 50 transactions at no cost, and you can deposit up to $3,000 in cash without a charge. The minimum opening deposit is $25, and the monthly service fee is $10. You can avoid the fee by maintaining an average ledger balance of $500.

What It Offers:

  • Business debit card
  • Wells Fargo Business Online
  • Wells Fargo Mobile app and Business Bill Pay
  • Optional overdraft protection

Simple Business Checking Pros:

  • Easy to avoid the service fee
  • $25 to open
  • Easy to upgrade when you outgrow it

Simple Business Checking Cons:

  • Little banking support
  • Limited to 50 free transactions

In spite of the cons, this account is good for businesses that have low cash flow and just need a place to store cash. The monthly fee is easy to avoid, and the account is fairly straightforward.

Business Choice Checking

This plan is Wells Fargo’s most popular choice for new or growing businesses. It allows up to 200 transactions and up to $7,500 in cash deposits at no cost. The minimum opening deposit is $25, and the monthly service fee is $14.

They offer three ways to avoid the service fee:

  • Maintain an average ledger balance of $7,500
  • Maintain combined business balances of $10,000
  • Have ten or more posted transactions from this account’s business debit card
  • Link to a Direct Pay through Wells Fargo Business Online
  • Have a qualifying transaction from a linked Wells Fargo Merchant Services Account

What It Offers:

  • All features offered by the Simple plan
  • Fee waivers and discounts for various business loans and lines of credit

Business Choice Checking Pros:

  • Great for growing companies
  • Comes with access to Wells Fargo National Business Banking Center
  • An affordable monthly fee that can be avoided
  • Only costs $25 to open a new account

Business Choice Checking Cons:

  • Limited to 200 free transactions
  • Offers fewer features than other banks

Platinum Business Checking

Wells Fargo’s Platinum plan is great for an established business that is looking for premium relationship benefits. This plan offers up to 500 transactions and up to $20,000 in cash deposits with no fee. It also takes just $25 to open this account, and the monthly service fee is $40.

As with the other plans, you can avoid the monthly service fee in the following ways:

  • Maintain an average ledger balance of $25,000
  • Maintain combined business balances of at least $40,000

What It Offers:

  • All features offered by both other plans
  • No monthly service fee on up to two additional Platinum Checking accounts
  • Interest bearing option
  • No fee for incoming domestic and international wire transfers
  • No fee for two domestic non-Wells Fargo ATM transactions per fee period
  • No fee for stop payments, money orders, or cashier’s checks

Platinum Business Checking Pros:

  • Interest bearing small business account
  • Personalized banking
  • Flexibility with cash deposits
  • Large number of free transactions
  • Free features such as stop payment and wires
  • Costs $25 to open

Platinum Business Checking Cons:

  • Difficult to avoid monthly fee unless you have large amounts of money

Chase

Chase is another well-known bank that offers its small business clients a number of perks and physical branch locations. Chase has three different business checking account options, with Chase Total Business Checking being most suited for small businesses.

Chase Total Business Checking

This account is designed for small and new businesses, and it requires $0 to open a new account. One advantage is that Chase offers $200 to new business checking customers with qualifying activities. This account has a $15 monthly service fee, which can be reduced to $12 if you enroll in paperless statements.

The monthly service fee can be avoided in the following ways:

  • Maintain a $1,500 minimum daily balance
  • Maintain a linked Chase Private Client Checking Account
  • Maintain a linked Chase Sapphire Checking personal account

What It Offers:

  • 100 free transactions per month
  • Unlimited electronic deposits
  • $5,000 in cash deposits per fee cycle with no fee
  • Domestic and international wire transfers
  • Account alerts
  • Chase Business Debit card
  • Access to Chase Online Banking and Chase Mobile Banking

Chase Total Business Checking Pros:

  • Offers welcome bonus of $200
  • Low service fee is easy to avoid
  • Unlimited electronic deposits
  • 100 free transactions
  • Mobile online banking in addition to physical branches

Chase Total Business Checking Cons:

  • Fees can add up with a lot of transactions
  • Fees for wire transfers

Chase Performance Business Checking

This option for a small business checking account includes the features of Chase Total Business and then some. If you are a small business that does a lot of transactions each month or has a high cash flow, this is a good option. This account costs $30 per month, but the service fee can be avoided by maintaining an average daily balance of $35,000 in qualifying business deposit accounts.

What It Offers:

  • 250 free transactions per month
  • Unlimited electronic deposits and incoming wires
  • $20,000 monthly cash deposit with no fee
  • Access to Chase Online Banking and Chase Mobile Banking
  • Chase Business Debit card
  • Interest option available
  • Monthly service fee waived on a linked Chase Business Premier Savings account
  • 24/7 customer service

Chase Performance Business Checking Pros:

  • User-friendly mobile app
  • Best for small businesses with high cash flow

Chase Performance Business Checking Cons:

  • Only two outgoing domestic wires are free
  • Can be difficult to get the monthly service fee waived

Chase Platinum Business Checking

This account is really for large businesses or small businesses that have a high enough cash flow to maintain the $100,000 balance needed to waive the $95 monthly fee. However, if you need more complex banking services, this account could be right for you.

What It Offers:

  • 500 free transactions
  • Unlimited electronic deposits and incoming wires
  • $25,000 cash deposit per statement cycle with no fee
  • Four free wires

Chase Platinum Business Checking Pros:

  • Priority service from Chase support
  • Positive customer feedback
  • Great if you have complex banking needs

Chase Platinum Business Checking Cons:

  • Expensive monthly fee of $95 if you don’t maintain $100,000 balance
  • Expensive to still limit transactions to 500

Capital One

While Capital One is a very recognizable name in the world of banking, it does not offer physical locations like some of the other banks on our list.  However, Capital One distinguishes itself from the others with unlimited free transactions. This bank offers mobile banking and online bill pay as well. Capital One offers two small business checking accounts. Which is right for you will depend on your banking needs.

Spark Business Basic Checking

The Basic Plan has a $15 monthly service fee that can be waived by maintaining a $2,000 minimum 30- or 90-day average balance.

What It Offers:

  • Unlimited transactions
  • Online and mobile banking
  • Deposit up to $5,000 with no fee; $1 per $1000 after
  • Standard wire fees

Spark Business Basic Checking Pros:

  • Free unlimited transactions
  • Online mobile banking
  • Fee can be avoided

Spark Business Basic Checking Cons:

  • Fee for all wires
  • Cannot send international wires

Spark Business Unlimited Checking

Capital One offers more features with this account. The monthly service fee is $35, but it can be waived with a $25,000 minimum 30- or 90-day average balance.  This account is a good option for well-established and high-volume businesses.

What It Offers:

  • Unlimited free transactions
  • Up to 5 free domestic wires per month
  • No fee for cash deposits
  • Online banking services

Spark Business Unlimited Checking Pros:

  • No fee for large cash deposits
  • Unlimited transactions
  • Online mobile banking

Spark Business Unlimited Checking Cons:

  • Service fee waiver requires $25,000 average balance

 

Member of

AICPA
American Institute of Certified Public Accountants
CPA
Florida Institute of Certified Public Accountants

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