Whether just starting out or already having an establish firm, any small-business owner wants his small business to be successful. At the same time, it is crucial for better conduct to make his or her daily tasks easier. Besides being a skilled salesperson and hard worker, a small-business owner needs to be a great accountant and competent manager, i.e., finding order in revenues and expenses is a must. That’s why opening a checking account designate for business purposes alone is important in today’s world.
There are a couple of advantages to opening such an account, and while searching for the best checking-account options for a small business, keep in mind that not all services and options are created equal. In the end, the best criteria for deciding on the various options remain the particular needs of a small business.
Main Reasons for Opening a Small-Business Checking Account
It might seem comfortable to have the same checking account for personal and business related expenses, especially for sole-proprietors. However, mingling them will make the small-business owner’s life a lot harder. Firstly, it should be noted that only businesses are able to deduct business expenses. Not a physical person, but only a juridical one. Another thing that any small-business owner needs to take into account is the tax time. When it comes to declaring income, keeping separate accounts can take some burden off the small-business owner’s shoulders and save precious time. Also, a small business’s image matters when seeking new clients and trying to increase revenue. The same account for both personal and business transactions simply does not inspire professionalism. A small business could be mistaken for a part-time hobby.
However, the main advantages of having a separated small-business checking account concern legal and business growth aspects. A small-business owner could face liability issues. If business and personal finances cannot be discerned, the small-business owner may run the risk of having his or her business not appear like a real one. Thus, the small-business owner becomes personally liable. Concerning growth, fundaments of a reliable and healthy way of business growth must be taken into consideration from the early stages. This means that relations with trusted advisers have to be established early on – at the bank.
How to Choose the Best Small Business Checking Account Option
Business checking accounts can be issued by credit unions and banks. While the neighborhood bank – where you already have a personal account – might seem like a great option for opening a small-business banking account, a small-business owner should remember that business needs are different from personal ones. While small banks, or a credit union, have a reputation for lending money more easily, large one score better when it comes to convenience.
In today’s business environment, different variables affect decision-making. And when it comes to small business, a couple of details always need to be considered before opting for a small-business checking account. Besides knowing the average balance for free-business checking and possible monthly fees for transactions, any small-business owner needs to consider if the business checking account option has fees for physical deposits. Remember, if a small business only accepts cash and check payments, customers will start purchasing services and goods from another place. Fortunately, opening a small-business checking account may give power of process debit and credit card sales.
Location and convenience are two other aspects that need to be taken into consideration when opting for a business checking account provider. When considering a bank for business checking, any small-business owner should know how convenient the bank’s branches are situated from the office. If a small-business owner needs to constantly go to the bank for any reason, then finding a bank close to his or her location is vital for success.
The mobile application is another aspect to take into consideration. Since we live in a digitalized world, no small-business checking account goes without a mobile app of its own or without third-party integration. While all have them, some have better functionality than others, or, simply, are better suited for a small business’s needs.
One of the pros of having a small-business checking account is that the owner can perform a number of free monthly transactions. Where the options differ lies in the number of such transactions, and the fee for each one after he or she has passed the number.
Last but not least, customer service support is an important aspect. If a small-business owner has troubles with bank transactions or anything else related to his or her business checking account, then customer support should be accessed as soon as possible so that business conduct will not be affected.
Before diving into details of the three best small business checking account options that we recommend – Bank of American Business Fundamentals, Wells Fargo Business Choice Checking, and U.S. Bank Silver Business – we wish to present you a short and to-the-point table with the most important features, so you’ll have guide your choosing the best option for you small business.
|Bank of America Business Fundamentals||Wells Fargo Business Choice Checking||U.S. Bank Silver Business|
|Required balance for free business checking||$5,000||$7,500||$0|
|Monthly fee (if required balance not met)||Less than $20.
It varies by state.
|Nation-wide number of branches||4,833||6,257||3,222|
|ATMs (nation-wide)||16,300 ATMs||13,000 ATMs||5323 ATMs|
|Free monthly Transactions||200 (45 cents / transaction after that)||200 (50 cents / transaction after that)||150 ($0.25/transaction after that)|
|Physical deposit fees||Up to $10K: Free
$10 -$25K: 0.2%
Above $25K: 0.3%
|Up to $7.5K: Free
Above $7.5K: 0.3%
Checking accounts are allowed 25 free cash deposit units per month, then $.12-$.16 per $100
|Mobile App||Good mobile App||Good mobile App||Good Mobile App|
|Customer Service||Online Chat for Questions||Does not have Chat for Questions||24/7 via mobile|
This is considered by some to be the best small-business checking account option available in the United States. With slightly less than 5,000 branches around the country, Bank of America is considered to have the best small-business checking account option available in the United States. This option comes with a balance of only $5,000 per month – or a $3,000 daily one – to maintain free business checking. If the balance is not meet, then the small-business owner has to pay a modest monthly fee of less than $20. This fee varies from state to state. While in New York State it reaches $18, in California and Text the fee is $16.
Every small-business owner disposes of 200 free monthly transactions with this business checking account option, paying 45 cents per transaction after that.
The business checking account option seems to be a great deal for physical deposits due to its fees. If a small business requires a large physical cash deposit, then the first $10,000 are free of charge. For sums of money between $10,000 – $ 25,000 the fee is only 0.2% of the sum. Anything over $25,000 is charged with 0.3% of the sum.
When it comes to third-party integration, Bank of America offers integration with QuickBooks, both Web connect and Direct connect.
Talking about mobile use or other similar gadgets, the small-business checking account doesn’t appear to have any functionality problems – neither on Android nor on iOS. Bank of America’s mobile app is easy-to-use and has a great deal of functionality. A small-business owner can deposit checks, pay bills, and transfer money via the mobile app. The app also comes with fingerprint recognition technology, making it more secure.
Concerning customer services, staff can be contacted via phone, e-mail or online chat. For phone services, the staff can be contacted Monday to Friday between 8 a.m. and 11 p.m. (ET), and Saturday to Sunday between 8 a.m. and 8 p.m. (ET). On their website, there is an easy-to-use portal, where users can browse what they need. The great thing about the portal is that issues are tailored by state. Just select the state, and then issue you are concerned with.
Wells offers four business checking accounts, and if a small-business owner´s needs are simple, then we recommend the Business Choice Checking plan. It’s easy to open an account, costing only $50. The plan comes with 200 transactions available at $14 per month, and the Required balance for free business checking is $7,500.
While the minimum balance for a free monthly fee is bigger than that of Bank of America, cash deposit requirements are lower. For physical cash deposits, the first $7,500 are free of charge, and cash deposit that goes above this sum is charge with 0.3% of the sum.
Concerning third-party integration, Wells Fargo integrates easily with QuickBooks. If a small-business owner uses QuickBooks, Wells Fargo will charge $14.95 per month, or $24.95 per month if he or she wants to pay bills via QuickBooks.
Using the mobile app, a small-business owner can have access to quick information about their account information via messaging. The small-business checking account can be easily accessed on any mobile gadget, allowing users to perform transactions. It comes with a variety of built-in functions such as check depositing and bill paying.
Wells Fargo’s staff is at their client’s disposal 24/7, both for issues regarding general banking, as well as issues regarding mobile and online banking. Unlike Bank of America, Wells Fargo doesn’t put an online chat at the clients’ disposal. On the other hand, they do have a well-structured Customer Service section on their website.
Not many banks offer small-business checking accounts plans with no monthly fee included. U.S. Bank is one of the few in the United States who does that. For small business, their Silver Business Package is highly recommended. It includes 150 transactions and $2,500 in cash deposits per month. Like other checking account services, it comes with online and mobile banking. Also, the plan includes free bill payment. The account has an accessible free invoicing service and is tied to several financing products. Besides the limited number of included transactions, unfortunately, the number of monthly cash deposits is also low. U.S. allows only 25 free units of cash deposits per month. On the plus side, it has over 3,000 branches, located across 28 states.
Pricing is the main downside with this bank. If a small-business owner goes over the free cash deposits, then he or she has to pay a fee between $0.12 – $0.15 per $100, depending on the state the small business operates in. Units are calculated by dividing each cash deposit by 100 and rounding the resulting value to a whole number.
The bank’s small-business checking account option is integrable with third parties. Like the previous two, integration with QuickBooks is possible. Other two important third-parties that can be successfully integrated with a U.S. Bank Silver small-business checking account are Quicken and Microsoft Money. It also gives full access to Online and Mobile Banking. Here, any small-business owner can find tools and apps to track spending quickly, pay bills, send money, deposit checks, and so on.
Concerning customer support, U.S. Bank’s crew can be contacted via phone or e-mail. Besides that, they have a very helpful section on their website. There, customers can find information on a wide variety of issues.
The Smart Hack
If you are looking for the best nationwide checking account provider all three options are serviceable, but the best one is Bank of America Business Fundamentals. They offer better service and the best fees for businesses with many monthly deposits. If your business is a startup or does not handle very many payments, then you should consider using either US Bank Silver Business. Your best option may be a local credit union. We recommend starting your search there and then latching on to one of these great solutions if you can’t find what you are looking for.