A solo entrepreneur or small business owner has to juggle multiple tasks to keep day-to-day operations running smoothly. Often, there is no scope to hire dedicated accounting staff to manage finances. Streamlining revenue and expenses is easier with a business checking account. For one, encouraging swipes translates into more sales. For another, there are fewer tax-related challenges to stress you out. Many business checking accounts also have a less stringent fee structure compared to personal accounts.
The good news is that most banks offer business accounts at a low cost and offer ways to avoid this fee. Fees are levied only for certain actions, such as exceeding a set number of monthly transactions or cash transactions over the particular bank's limit. Some may require a minimum monthly balance while others don't impose such terms.
The big question is, which business checking accounts offer the most benefits? Here's a look at the five best you must explore when you decide to open your first business checking account, an additional one, or switch from an existing account to a better service.
Wells Fargo Business Choice
The international banking and financial services company maintains over 6,000 branches across 42 states. Wells Fargo Business Choice is popular among businesses; you can also consider their Simple Business Checking option.
While Wells Fargo does charge a $14 monthly fee, you can avoid paying this fee in the following ways:
- By making at least ten debit card purchases each month
- Ensuring that your average monthly balance is $7,500
- Ensuring that your combined balance across all your business accounts with Wells Fargo is $100,000
- By using certain Wells Fargo services, such as their payroll or merchant account services
You are allowed a total of 200 transactions every month – for free. Every additional transaction is charged $0.45.
If you expect to handle cash, you can make monthly deposits of up to $7,500 at no charge. This is almost double the amount allowed by other banks. Beyond this amount, you are charged $0.30 per $100.
The Simple Business Checking account has a $10 monthly fee that can be waived by maintaining an average balance of $500. The cash deposit limits are lower as are the number of free transactions. On the flip side, you don't have to make a set number of debit purchases to waive off the monthly fee.
Wells Fargo offers integration with QuickBooks for both Webconnect and Direct Connect. They also have an iOs and Android app for checking balances, depositing checks, and making payments via mobile phones. You can use the free app to access money management tools, make transfers between accounts (Wells Fargo and other financial institutions) and receive notifications if any suspicious activity is detected.
Bank of America
Bank of America operates 4,833 branches across 35 states. They offer two business checking accounts : Business Fundamentals ($15/month fee), intended for firms that spend at least $250/month on their business credit or debit card, and have an average monthly balance lower than $5,000; and Business Advantage ($29.95/month fee), if your business credit card spend is at least $2,500/month and average monthly balance exceeds $15,000
The fee is waived if:
Your average monthly balance does not dip below $3,000 or averages $5,000
You maintain $15,000 in linked accounts
You spend $250 on your debit card linked to the Business Fundamentals account
Up to 200 transactions per month are free, with $0.45 for every additional transaction. You can make free physical cash deposits for amounts of up to $10,000; additional physical cash deposits above $25K are charged at $0.30 per $100. This compares favorably to most other banks.
Bank of America offers an iOs and Android mobile app for money transfers, bill payments and check deposits. You can make the most of cash and credit card offers with eligible Bank of America debit or credit cards.
Capital One Spark Business
Capital One maintains 840 branches and is well-known for their cafe style locations/banking cafes. If you're looking for a business checking account that does not charge monthly fees or have minimum deposit requirements, look no further than Spark Business accounts.
You also benefit from unlimited monthly checking transactions, deposits, transfers and withdrawals included. One drawback is that only Capital One ATMs accept cash deposits and there isn't any face-to-face support for the Spark Business accounts. Another option is to click a picture of a check and upload it to your account.
Citibank operates 807 branches across 15 states, most concentrated in California and New York.
You can choose from four business checking accounts:
- Streamlined Checking Account, a basic plan for fewer than 250 transactions per month
- Flexible Checking Account for average monthly balances of at least $10,000 and a large number of monthly transactions
- Checking Account for large businesses with a higher than average number of monthly transactions
- Interest Checking Account, an interest-bearing account requiring an average monthly balance of at least $10,000
The monthly fee charged for the accounts can be waived by maintaining a monthly balance of $5,000.
You can make up to 250 free transactions each month. For cash currency deposits exceeding $10,000/month, $0.30 is charged per $100.
Bank of Internet Federal Bank
The Basic Business checking account from Bank of Internet Federal Bank is exclusively an electronic banking solution. You can make up to 200 free transactions each month, and you're charged $0.30 for every additional transaction.
Make a deposit by wiring money to your account or mail a check to the bank's main office in San Diego. Unlimited fee reimbursements are offered for all US-based ATMs.
Get more information and guidance on small business financing at the RapidAdvance Blog.