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As a small business owner, most of my financial business is done online or with mobile apps. But choosing the best business checking account can be daunting.
Plus, you want to make sure you don’t spend extra money on fees. You deserve to keep more of your hard-earned money!
But, I’ve seen the benefits of technology and how going digital makes me more productive and streamlines my life.
Oddly enough though, many consumers and small business owners (about half) still bank at traditional banks!
It’s time you embrace technology and the benefits it offers, by finding the best business checking account. I’ve compiled an in-depth list of the best choices, so you can find the one that works for you.
And don’t forget to download the best business checking account checklist!
Chase Bank’s Total Business Checking
The Chase Total Business Checking account is the business account I currently use. My business has been an LLC with it’s own Tax ID number since moving to Colorado a couple years a go.
While I’m not super crazy about how “big” of a bank Chase is, there’s an branch right across the stress from my apartment, so it’s super convenient.
The business checking account comes with a $10 monthly account fee, but this is waived if you keep a regular balance of $1,500 or more each month. It allows for international wire transfers, up to 200 transactions and $7,500 worth of deposits, for no additional fees.
In addition, Chase offers two other tiers of business checking accounts depending on your needs.
- Chase Performance Business Checking – This is the next level up in checking accounts and offers the same features as the Total Business Checking except it allows you to have 350 transactions and up to $20,000 in deposits for no additional fee. The $20 monthly fee is waived if you keep a minimum balance of $50,000 or more.
- Chase Platinum Business Checking – This is the most robust option of all three, and is likely for large businesses and corporations. It has a $95 monthly account fee that’s waived if you keep a qualifying balance of $100,000 or more. It provides up to 500 transactions and $25,000 in deposits each month, with no additional fees.
Generally you have to find a local branch to open your business checking account, but that isn’t too difficult as they have quite a few branches all over the U.S. and the world.
The online site and mobile app make it extremely easy to keep track of your balance, income, and expenses. Like I said, there are ATMs everywhere, and pretty much all online software, invoicing programs, and bookkeeping software will link to Chase because it’s so popular.
Click here to compare all of the Chase Business Checking Account options!
PayPal Premier (or Business) Account
Another great option is to avoid checking accounts all together and just use a Premier or Business PayPal account. If you use a service like FreshBooks or QuickBooks, you can choose PayPal as one of your payment options for freelance clients and then use the funds in the account just as you would a regular bank account.
Upon request PayPal will issue a debit card that’s attached to your PayPal balance, and you may even qualify for a PayPal Smart Connect line of credit which can come in handy when you need to pay bills for your business.
The balance in your PayPal account also earns a small amount of interest similar to a Money Market business checking account would at a traditional bank. And the best part about using a PayPal account as a substitute bank for your freelance business is that it’s completely free.
You can also make deposits to your PayPal account if you receive checks from clients. Just take a picture of the check with PayPal’s mobile app on your Android or iPhone, and the funds will be deposited within 2-3 business days.
With your PayPal account you can print off profit and loss reports, earnings reports, pay bills, and transfer funds to other bank accounts. Basically anything you can do with a regular bank account, you can do with a PayPal business account — and more.
Click here to get started with a PayPal Business or Premier account!
Discover Bank’s Money Market Account
You may not realize that Discover Bank doesn’t just offer cash back credit cards, or awesome balance transfers (although they DO offer those great perks!). They actually have stellar checking and savings accounts!
This could be a great option if you want to use a personal savings or checking account for your business profit income. What do I mean by this? Thanks to Mike Michalowicz’ Profit First method, I use Discover Bank for my business profit account.
The Money Market account is a great to earn a bit of interest on your money. They also offer cash back with all their products — without using credit cards and going into debt. Yep, you can use your Discover Bank Money Market debit card and earn $0.10 on every purchase you make.
That can really add up when you’re making purchases for your business, like flights, meals, books and office supplies. As small business owners we need all the extra cash back we can earn to re-invest into our businesses.
Their customer service is also outstanding and I’ve never had any issues with security. Their mobile app allows you to check your balance, make transfers and even deposit checks with one click.
They also have some of the best interest rates available with a money market account and you can get unlimited free checks while you have an account.
Click here to open a personal savings account with Discover to set aside business profits!
Business bank accounts I DON’T recommend
After doing a lot of research for my own business, there are a few bank accounts that are terrible options. I’ve also taken into account the feedback I’ve received from members of the Careful Cents community.
So, here are the business bank accounts I DO NOT recommend.
- Ally Bank – This is still a great option for a personal account, but don’t try using it to get deposits for freelance income. if they find out you’re receiving payments from sites like Fiverr or PayPal, they will shut down your account.
- Capital One Spark Business – Their account is amazing (and free!) but the customer service is bogus. They take weeks and weeks to finally process your account after opening it. Oftentimes the transactions are recorded incorrectly when they post to the account.
- Suntrust Business Checking – I haven’t personally tried Suntrust, but I hear that their app never works and the website is always down. For location independent business owners, this is a deal-breaker.
Checklist for the best business checking account
There are many factors to consider when choosing the best business checking account. For one, make sure it’s simple to use and doesn’t come with a lot of monthly fees.
You also want your funds easily accessible — especially if you’re a location independent freelancer who travels a lot (like I do). Here are some other factors to consider when finding the best business bank account.
1. Open separate business and personal accounts
If you do nothing else for your business opening a separate business checking account is a must! The main reason is because it will be a whole lot less of a headache for you. By separating your business transactions you create a line between professional and personal.
This is especially handy come tax time when you create year-end reports for your bookkeeper or CPA. And if you’re ever audited, you can prove your business is legit much more effectively.
Besides, you wouldn’t want the IRS (or your CPA) poking through your personal income and expenses in order to locate your business transactions. Would you?
2. Use your business name
You can also customize the name on your account, and your checks, so you appear more credible to other contractors and freelancers you pay. Even if your business isn’t a LLC yet, you can still apply for a DBA (Doing Business As certificate) and different Tax ID number.
3. Connect your bookkeeping software
Another advantage is that you can link your bookkeeping software to your dedicated business account. This makes it super easy to print out monthly and yearly reports. You won’t have the hassle of excluding personal transactions from the business ones while categorizing them.
I use QuickBooks Self-Employed, so I can track the different types of income sources (PayPal, direct deposits, checks) and to calculate quarterly taxes.
4. Consider using a personal bank accounts
It’s important to understand the type of business you’re operating. You can be a freelancer who is a sole-proprietor and don’t necessarily need to open a “business” checking account.
In the eyes of the IRS, a sole-proprietor isn’t a legal business entity like an LLC or corporation is, so you can save money by using a personal bank account for business purposes.
The main reason for this is because my business is still small enough so it isn’t super complicated or have mega amounts of income every month. This also allows me to avoid the costly monthly fee that’s usually associated with a business account.
5. Watch out for monthly fees
Is there a monthly minimum balance that must be maintained in order to waive the monthly fee? Does your business bring in enough to avoid the fees associated with the account? Or can you find another bank that offers a better deal?
6. Know the requirements to open an account
Is your business an LLC or just a sole-proprietorship? Do you have a Tax ID number or simply using your personal Social Security number? This will determine what documents you’ll need to open the account.
7. Convenience of ATM and branch locations
If you travel a lot for your business, you’ll want a bank that has lots of ATMs and branch locations. At the very least, you don’t want to pay fees for using an ATM that’s outside of your bank’s network. See if they bank will reimburse members for these fees, or if they have a larger number of ATMs within their network.
Otherwise, look for a checking account with the ability to manage your money via the mobile app with mobile deposits. Make sure that the mobile app gets good reviews, so you can easily manage your money on the go.
8. Expected monthly transaction limits
Does your business do a large volume of transactions every month? Or do you have less than 200? You may be able to open a business checking account with less fees depending on how many transactions go through every month.
9. Look for bonuses and perks
Look for business accounts that offer perks or additional bonuses for business owners. You may also want to consider opening a bank account at the same bank that holds your business credit card account, as they can give you a good deal.
Credit cards are a great way to generate start-up capital, provided that you use them properly. You want to look for a card that offers a wide variety of features. Such as, doesn’t cost anything in annual fees, allows you to implement spending limits, and provides you with protection should your card fall into the wrong hands.
Confused yet? There are lots of different factors that go into choosing the best checking account as a biz owner. But I’m making it easy for you!
In order to determine the best checking account for your small business, I’ve created a free checking accounts checklist. Just input your name and email address into the form below.