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Whether you're just starting out or have been operating for years, having a proper business bank account is essential. Every professional venture or company, no matter how small, needs one: It is central to your business' financial operations, as it receives deposits from customers and makes payments to your employees and vendors. It can also be important for proper book-keeping, tax reporting, and various legal reasons.
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There is no one right type of business bank account: What you need varies based on what type of business you have, its size, and its complexity. That being said, certain common account features exist that all business owners—no matter what their field—should consider when shopping for a financial institution. We've scoured the offerings out there, and come up with the best in several categories.
Best Business Bank Accounts
- Chase Total Business Checking: Best for Rewards
- U.S. Bank Silver Business Checking Package: Best Brick-and-Mortar Bank
- Radius Bank Tailored Checking: Best Interest-Bearing Business Checking Account
- Axos Bank Basic Business Checking: Best Online Business Checking Account
- Wells Fargo Platinum Business Checking: Best For Cash Deposits
Chase Total Business Checking: Best for Rewards
Chase Bank, the consumer and banking arm of J.P. Morgan Chase, has over $2.6 trillion in assets and operations worldwide with nearly 4,900 branches and 16,000 ATMs. It offers several types of business accounts, geared to the size of your venture, and juicy incentives for signing up. New Chase Total Business Checking Accounts, for example, can earn a $500 bonus when depositing $2,500 within 20 business days of account opening. The $2,500 balance must be maintained for 60 days and the account holder must complete five qualifying transactions within 60 days.
Generous new account bonuses
Big bank features: rewards-earning credit cards, large branch network
Advantages to linking personal accounts
Must meet balance requirement within 20 days for bonus
Balances cannot dip below minimum for 60 days or bonus will be lost
Low transaction limits before fees are charged
Other important information:
- Minimum balance: $2,500 (to earn the bonus); $1,500 thereafter
- APY: 0%
- Transaction Limits: 100 transactions per month plus unlimited electronic deposits. Limit $5,000 in cash deposits per month
- Fees: $15 or $12 with paperless statements. Waived when linked to a Chase Private Client or Sapphire checking account
U.S. Bank Silver Business Checking Package: Best Brick-and-Mortar Bank
U.S. Bank is America's fifth-largest bank with 74,000 employees and $467 billion in assets. Founded in 1863 and headquartered in Minnesota, it has over 3,000 branches in 40 states across the U.S. available for small business customers (its specialty). The Silver Business Checking Package has no monthly fees and allows for up to 125 transactions, which is adequate for many small businesses.
No monthly fees
No minimum balance requirements
Up to 125 transactions allowed monthly
$0.50 charge for each transaction exceeding125 monthly maximum
Not located in every state
No interest-earning accounts
Other important information:
- Minimum balance: $0
- APY: 0%
- Transaction Limits: 125 per month, including 25 free cash deposit units per month
- Fees: $5 paper statement fee
Radius Bank Tailored Checking: Best Interest-Bearing Business Checking Account
Radius Bank was founded in 1987 as an online-only bank. It offers the same FDIC insurance as traditional brick-and-mortar banks and now has over $1.4 billion in assets. The Tailored Checking account offers an interest rate of 0.75%, which is four times more than the industry average. Customer benefits include unlimited transactions with no fees, including free ATM withdrawals (it rebates any incurred surcharge) and bill pay.
Unlimited ATM surcharge rebates
Generous interest on accounts (currently .75%)
Unlimited no-fee transactions
No physical branches
No interest on balances under $5,000
High minimum balance required to waive monthly fee
Other important information:
- Minimum balance: No minimum balance required, but $100 is needed to open an account
- APY: 0.75%
- Transaction Limits: Unlimited transactions with no per-transaction fees
- Fees: Accounts with less than $5,000 average balance are charged $10 per month
Axos Bank Basic Business Checking: Best Online Business Checking Account
Axos Bank was designed as a digital bank from its inception in 2000. A publicly-traded company, it has nearly $11.8 billion in assets. Its Basic Business Checking account is "for the busy business owner that has modest checking needs." The account has no monthly service charges and unlimited domestic ATM fee reimbursement.
No monthly service charges
Unlimited domestic ATM fee reimbursement
First set of 50 checks is free
Minimum deposit of $1,000 to open an account
$0.30 per item after the first 200 transactions per month
No branches/in person interaction
Other important information:
- Minimum balance: $0
- APY: 0%
- Transaction Limits: Limit of 200 debits, credits, or deposited items per month. $0.30 per item after that
- Fees: None
Wells Fargo Platinum Business Checking: Best For Cash Deposits
Founded in 1852, Wells Fargo has grown into the third-largest bank in the U.S. with $1.9 trillion in assets. It numbers more than 7,400 locations and 13,000 ATMs in 32 countries. The Platinum Business Checking account is best for depositing cash because the first 500 transactions and $20,000 in cash deposits per month are included at no extra charge.
High number of monthly transactions allowed
Large branch network
No fees for stop payments, cashier’s checks, and other business services
High monthly service charge/high balance to waive fees
Low interest rate tiers
$0.50 per item and $0.30 per $100 over transaction limits
Other important information:
- Minimum balance: $25 to open the account
- APY: Rates not available online; you must speak with a banker. For example, rates in Nashville, TN are 0.05% APY above $25,000; 0.01% APY below $25,000. No interest earned on days that balance falls below $500
- Transaction Limits: 500 transactions per month, then $0.50 per transaction; $20,000 in cash deposits per month, then $0.30 per $100 deposited
- Fees: The monthly fee of $40 is waived with a $25,000 average balance or $40,000 in combined balances (checking, savings, time accounts, and credit).
What is a Business Bank Account?
A business bank account is a checking account set up specifically for business incomes and outflows, allowing individuals to keep their professional financial affairs and transactions separate from their personal ones. Business accounts often provide features that are uncommon for individual accounts. These features include initiating wires or ACH payments, delegating account authority/privileges to other parties (like an employee or accountant), and cash management tools like positive pay.
What is the Difference Between a Business Bank Account and a Personal Bank Account?
Although business bank accounts and personal bank accounts are similar in many ways, the do have their differences. A business bank account has more requirements to open than a personal account.
Fees and required balances also tend to be higher for business bank accounts, while interest rates are lower. Business bank accounts usually allow a limited number of transactions before the bank charges additional fees.
Since a business bank account represents the business and not a person, authorized signers can be added or removed at any time without needing to close the account.
What Do You Need To Open a Business Bank Account?
Requirements to open a business bank account vary by financial institution. However, most banks require the following:
- Employer Identification Number (EIN) 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 bank—and can be a key factor, along with ongoing minimum account balances, to consider when choosing one.
Can I Open a Business Bank Account Online?
Yes, there are many banks that allow you to open an account online in just a few minutes. Several of these banks are mentioned above. To open your business bank account online, the bank will require all of the same paperwork as if you opened the account in person.
Can I Use My Personal Bank Account For My Small Business?
You can use your personal bank account for a small business, like a sole proprietorship. However, it is best not to. Having a dedicated bank account for your business allows you to keep your business deposits and expenses separate from personal transactions. This is very important when it comes to filing taxes.
Do I Need a Business Account If I'm Self-employed?
You do not need a separate business account if you are operating your business under your own name. However, it is recommended that you have a dedicated, separate bank account to make it easier to track business revenue and expenses.
If you are operating your sole proprietorship under a fictitious business name or as a separate legal entity (e.g. C-Corp, S-Corp, LLC), then you need to have a separate business bank account.
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 (and, like Chase, even encourage 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.
The Bottom Line
From sign-up bonuses to easy cash deposits, business bank account features can vary greatly. Consider all the characteristics before choosing where to bank.
Whatever perk or feature most matters to you, having the right business bank account is crucial to your business. This account is where your deposits are made and expenses are paid.
And, as your business continues to grow, it makes sense to re-evaluate your business bank account each year. Pay attention to the transaction limits, fees, restrictions, and benefits to ensure that yesterday's account is the right one for your business today—and tomorrow, as well.
Methodology
Research for this article encompassed business bank accounts from across the U.S. We evaluated the benefits offered, transaction limits, fees charged, and customer service of each business bank account reviewed to determine the "best of" designation for each category.