Best Business Checking Accounts of 2024
Best Business Checking Accounts of 2024
For small business owners and solo gig workers, the importance of having a dedicated business checking account can’t be overstated. Business checking accounts are crucial for tracking business income and expenses. They also keep business revenue separate from personal funds.
MoneyRates created this guide on business checking accounts to provide an overview of the typical services and fees associated with business accounts at major national and online banks. We’ve focused on organizations’ entry-level business checking accounts for small businesses and independent contractors since many banks offer multiple tiers of business checking accounts to meet the needs of mid-size and large companies.
Monthly Fees at Big U.S. Banks for Business Checking Accounts
Fees for business checking accounts can vary significantly from one bank to the next. Business accounts with high transaction limits and accounts for larger businesses often have higher fee structures than basic business accounts intended for independent contractors and small businesses. Fees at national banks tend to have a similar range, while regional credit unions and online banks may offer more enticing fee structures to attract more customers.
The most common cost tied to business checking accounts is the monthly maintenance or service fee, although banks charge additional fees for a range of services. Financial institutions levy monthly maintenance fees for maintaining a checking or savings account. The fee is automatically withdrawn from accounts each month, although most banks will waive this fee if customers meet specific monthly requirements.
Other common business checking account fees include:
- Out-of-network ATM usage
- Printing checks
- Overdrafts and returned checks
- Stop payment
Below are monthly maintenance fees on basic business checking accounts from five big banks and their requirements to waive the service fee.
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Number of Free Transactions for Business Checking Accounts at Big Banks
Monthly maintenance fees aren’t the only concern when searching for the best business account, especially for business owners with many business transactions posted to their accounts each month.
Transactions cover a range of account usage, such as paper and electronic deposits and debits, in-person or ATM withdrawals, wire transfers, and loan payments. They typically don’t include debit card purchases or payments, though.
Many banks have a cap on the number of free transactions allowed each month, and account holders who go over that free transaction threshold are charged for each ensuing transaction. Fees are small – usually around $.50 for each transaction over the limit – but costs could pile up quickly for businesses that have hundreds of transactions in any given statement period.
Here are the transaction limits and fees for six featured financial institutions.
Free Cash Deposits Each Month
Many banks may limit the amount of cash you can deposit monthly into your business account.
Part-time gig workers, sole proprietors, and some small business owners may not hit these thresholds, while more well-established businesses may easily exceed them.
Fees for exceeding deposit limits vary by financial institution. Here’s a sampling of the fees you’ll see from traditional and online banks.
Wire Transfer Fees for Business Checking
Business owners sometimes must move money around to different accounts. Wire transfers are a fast way to send money between financial institutions. Funds may be available the same day the transfer is initiated. Wire transfers are also a good option for moving large amounts of money, although some banks may have limits on wire transfer amounts.
Fees for wire transfers can add up quickly – $25 for each outgoing transfer is a common cost, though many banks charge more. Banks also usually charge for both outgoing and incoming wire transfers. The following are domestic wire transfer costs at six selected financial institutions.
Interest-Bearing Business Checking at U.S. Banks
Some banks and credit unions will pay interest on business account balances. However, financial institutions that offer interest-bearing accounts typically offer them as higher-tier products than the basic business accounts we’ve highlighted above. Monthly maintenance fees for these accounts are higher (often around $25-$30), and minimum balance requirements to waive those service fees are higher as well (around $5,000-$15,000 average daily balance).
Here are six financial institutions and their different types of business accounts:
- Bank of America: No interest-bearing business accounts
- Citibank: Citibusiness interest checking
- Chase: Interest option available on its mid-tier performance business checking account
- PNC Bank: No interest-bearing business accounts
- Truist Bank: No interest-bearing business accounts
- Wells Fargo: Interest-bearing on its navigate business checking mid-tier account
Pros and Cons of Business Checking
Business checking accounts are very similar to personal checking accounts, but there are some subtle differences. Here are some of the benefits of having a business checking account, as well as a few potential drawbacks.
Pros
- Ability to separate business and personal income.
- Account services can better track income and expenses. Keeping business income in a dedicated account lets you see the details of your income and expenses. This can help you gauge profitability and find areas where you need to manage expenses better.
- Simplified tax reporting. Tax time is more complicated and expensive when you must file a Schedule C, a Profit or Loss from Business. Your accountant will have an easier time filling out this document when funds from your business or gig work aren’t commingled with personal funds.
- Ability to take credit card payments. Business accounts provide merchant services, so you can accept card payments. This service is typically only available on higher-tier business accounts rather than basic ones.
Cons
- Higher balance requirements to waive maintenance fees. With a personal checking account, you usually can get your monthly maintenance fee waived by having a qualified direct deposit or maintaining a modest balance, such as $500. Many business accounts require 10 times that amount to avoid a monthly service fee.
- Higher fees. Monthly maintenance fees for basic business accounts mirror personal checking account fees, but fees for mid- and top-level business accounts typically cost between $30 and $50 a month.
Compare Business Checking Accounts
If you’re interested in business checking accounts, here are several of the best options you’ll want to explore.
Grasshopper Checking
If you’re a small business owner or considering starting one, a dedicated business checking account like Grasshopper’s can streamline expense tracking and bill payments.
Grasshopper offers online business checking with no monthly fees, quick account setup, and FDIC insurance. The account features no monthly maintenance fees, a low $100 minimum deposit, and online/mobile account management. Pros include easy online account opening, competitive interest rates, and purchase rewards. While there are no savings or CD options, Grasshopper ensures account safety and offers robust customer support.
With unlimited transfers and convenient access, Grasshopper provides a compelling choice for digital business banking.
U.S. Bank Business Checking Account
The U.S. Bank business checking account is a straightforward option for businesses with low transaction volumes, offering Silver, Gold, and Platinum account tiers. With a $100 minimum deposit, FDIC insurance, and online access via the U.S. Bank app or in-person, it suits those seeking an in-person banking experience.
Pros include an extensive branch network and 24/7 customer service, while cons include low transaction limits and potential out-of-network ATM fees. U.S. Bank caters to startups, small businesses, and non-profits but may be better for those prioritizing digital banking or high interest rates.
Found
Found is a banking option tailored for freelancers and sole proprietors, offering streamlined features like automatic expense categorization and tax estimation. It suits those who prefer digital banking and require easy integration with popular apps like Stripe or PayPal.
With no minimum deposit or balance requirements, Found provides unlimited transactions without monthly fees or overdraft charges. However, it lacks options for cash or check deposits, check payments, and wire transfers.
Applying for an account is straightforward via the app or website, requiring basic personal and business information. While Found offers solid user experience and customer support, it operates solely online with limited phone support hours.
Despite its limitations, Found’s built-in bookkeeping and tax planning tools make it a convenient choice for solo entrepreneurs.
M&T Bank Simple Checking for Business
M&T Bank’s Simple Checking for Business is a straightforward option for managing business finances, with a $10 monthly fee that can be waived and no minimum balance requirement.
Offering online and branch access, the account covers the first 100 transactions and $5,000 in deposits without fees. While lacking in additional features, M&T Bank provides custom debit cards and access to over 700 branches and 1,800 ATMs. Although fees for excess transactions can accumulate, the bank offers promotions for new customers.
With no interest and limited tools, it suits those preferring traditional banking methods. Customer support is available by phone, and account security includes encryption and chip technology. Opening an account requires basic personal and business information, with no minimum opening deposit.
Citibank Business Checking
Citibank Business Checking offers advantages like access to 60,000 ATMs, up to $10,000 in monthly free cash deposits, and sign-up bonuses of up to $2,000. Account opening requires a branch visit and is limited to 10 states and Washington, D.C. The Streamlined Checking option, with a $15 monthly fee waived for balances over $5,000, is best for businesses in select areas needing to deposit cash monthly.
While lacking online account opening and interest, Citibank stands out with its high cash deposit limit and extensive ATM network. However, overdrafts incur a $35 fee without grace periods. The bank also offers a credit line option, which requires separate approval.
Business and Personal Checking: What’s the Difference
Business accounts offer the same services as personal checking accounts, but small business owners and independent contractors will likely enjoy the additional features of business accounts. Here are some of the different uses for the two types of accounts.
Do You Need a Business Checking Account?
Business accounts are a must for a range of people and various situations – they’re legally required if you operate a business as a separate entity, such as a limited liability company.
Here are some scenarios where it makes sense to have a business account.
- You’re a gig worker, independent contractor, or freelancer
- You own a small business independently or with a partner
- You own real estate under a limited liability company
- You pay multiple vendors for goods and services
- You pay employees
- You need to document business income to take out a business loan or obtain commercial financing
In each case, a business account keeps business revenue separate from personal income.
How to Choose a Business Checking Account
Business accounts have a range of features to meet the needs of different clients. Finding the one that works best for you depends on how you intend to use the account.
The following six factors are primary considerations when researching business checking accounts.
Type of Financial Institution
Local, regional, and national banks and credit unions typically have physical branches you can visit in person if necessary. Online banks may offer lower fee structures, but you won’t have any face-to-face interaction with tellers and bankers.
Deposit Requirements
Basic business accounts may waive monthly service fees if you maintain an average balance of $2,500 or $5,000. Mid-level and top-tier accounts may require significantly higher deposit amounts. Determining how much money you’ll be able to keep in your account can help avoid monthly service fees.
Deposit Limits
Business accounts have monthly cash deposit limits. If your business takes in significant sums each month, you may incur additional fees for cash deposits over the predetermined threshold. These fees are nominal – around $.30 per $100 – but they can add up over the long term.
Transaction Limits
Business accounts typically cap the number of free transactions you can make each month before incurring a modest per-transaction fee. Choosing an account that meets your expected transaction volume is another way to eliminate unnecessary bank fees.
Interest Bearing
Basic business accounts don’t pay interest on account balances, but certain mid- and high-level accounts may. Interest is an easy way to earn a little extra each month to offset any potential fees you may incur while using your business account.
Service and Other Fees
Some basic business accounts are free, while others waive modest monthly service fees for maintaining a certain amount in your account. Banks charge additional fees for wire transfers, check printing, overdrafts, returned checks, and stopping payment on checks. These fees vary by financial institution.
Other considerations include customized tax reporting and financial analysis tools, ATM access and fees for out-of-network ATMS, and minimum opening requirements. The services banks offer on business accounts vary, so it pays to do some sleuthing before opening an account.
Methodology
MoneyRates reviewed more than 25 business checking accounts from top traditional banks, credit unions, and neobanks.
We chose the best business checking accounts based on low fees, costs per transaction, the ability to waive fees, transaction limits, accessibility, minimum opening deposit requirements, and interest paid.
This rigorous approach ensures that our recommendations are founded on a detailed and holistic analysis, identifying the best-suited checking accounts for our audience.
Visit our Deposit Product Ratings Methodology page for an in-depth look at how we choose the products we feature on our pages.