5 Types of Bank Accounts for Small Businesses

Some banks offer other perks to business customers, like discounts on other products or even lower interest rates on loans. The Chase Business Complete Checking debit card has a daily purchase limit of $10,000. Chase charges for using out-of-network ATMs in the U.S. and internationally. If you need to write paper checks, you can receive a 50% discount on the first check order up to $50. John and Kelly also open a credit card account, which they’ll use to make business-related purchases and build a credit history. They can use the line of credit in an emergency to keep their business running smoothly.

1. If your company accepts debit and credit card transactions, a merchant account will be necessary.
2. Some banks will waive that fee if you meet certain criteria, such as maintaining a certain minimum account balance or having other types of business accounts.
3. Brick-and-mortar banks usually can’t match the higher rates of online banks because they have much higher overhead costs.
4. Again, the right business bank account depends on your needs, but here are a few we at Nav approve of.
5. MMAs sometimes have higher minimum deposit requirements than business savings accounts as well, which may prohibit some business owners from opening one of these.

Having business accounts is a smart way to separate finances, track expenses, and prove to lenders that your company has what it takes to succeed. In return, you’ll earn better rewards, better interest, and have an easier time with accounting and bookkeeping. One of the most significant benefits of having a business account is that it helps to separate personal and business finances.

Additionally, you may be required to provide business financial statements or a business plan. When you’re opening your business bank account, make sure to read all of the details on the financial institution’s site to ensure any limits align with your anticipated transaction volume. If your business is a sole proprietorship or single-person LLC, you can use your Social Security number—instead of an Employer Identification Number—to open a business checking account. But if your business has employees or operates as a corporation or partnership, you will need an EIN.

How To Open a Business Bank Account

You may also want a bank that offers additional business services, such as merchant services, credit card processing, or payroll services. To avoid any potential account opening delays, request a copy of your ChexSystems report and ensure all information is correct. If you spot a mistake, you can file a dispute to ChexSystems to get it fixed before opening a business checking account.

The $10 monthly maintenance fee can be waived with a $5,000 minimum average daily balance. Business Interest Checking also features unlimited domestic ATM fee reimbursement. The first 100 transactions are free each month, with a $0.50 fee for each additional transaction.

This account also permits unlimited fee-free transactions and requires an opening deposit of just $100. Because the Commercial Analyzed Checking account emphasizes that every business has different needs, it’s https://personal-accounting.org/ recommended for small business owners who value (virtual) service and customizability. There is a $10 monthly maintenance fee for this account, but it’s waived if you keep a $500 average monthly balance.

Initiate Business Checking®

We’ll cover what you need to know about business bank accounts, how to choose the right one for your business’ needs, and how to open one. Unlike the other accounts on this list, merchant accounts are unavoidable if your business plans to accept cards and other forms of payment. When shopping for one, it pays to carefully review the terms of service so you’re crystal clear on the transaction fees you’ll be paying. If your bank offers you a high interest rate, a money market account might make more financial sense than a standard savings account. Just make sure the restrictions that come with it don’t lock away any necessary capital. But for the most part, the entry-level business checking and savings accounts you see your consumer bank advertising are very similar to regular checking and savings accounts.

Business checking account

This account is recommended for businesses with smaller balances that value customer service. This account has a $15 monthly maintenance fee that can be waived by maintaining a $10,000 average daily balance or opening a linked business checking account. Free cash deposits are limited to $5,000 or 20 transactions per month. This savings account is a worthy option for high balances and convenient cash access, but it’s not ideal for saving on a smaller scale. Business bank accounts work just like personal checking and savings accounts, but they are specifically designed for you to use for business transactions. You can connect your checking account to your online payment system so that when clients pay you or make a purchase, the funds get deposited into your bank account.

It’s an account from which you’ll conduct almost every other financial function of your business, from paying vendors to running payroll. If your company accepts debit and credit card transactions, a merchant account will be necessary. When a customer pays you, the money goes straight into this account and is automatically transferred to your other business bank accounts once it has been processed. You may know the ins and outs of managing your personal checking accounts, but what about doing the same for your business?

This website is using a security service to protect itself from online attacks. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Kailey Hagen has been covering personal finance topics, including banks, business account types insurance, and retirement since 2013. When you open a CD, you’re agreeing not to touch the funds you put into it for a certain amount of time, known as the CD term. The interest rate you get depends in part on the CD term, with a longer term usually corresponding to a higher APY.

Business savings accounts often earn interest, but there may be a limit to how many withdrawals you can make per month. Many savings accounts allow you to link business checking accounts for one-time or automated transfers. A business checking account is the most versatile and widely used form of deposit account. Just like a personal bank account, you can put in money, withdraw cash, make payments and transfer funds. A debit card and checkbook are usually issued and transactions can be easily managed through online banking or a mobile banking app.

Business bank accounts function as a hub for all financial transactions related to a company’s operations. They’re established under a business’s legal name, so business finances stay separate from the personal finances of the owner or owners. Many businesses opt for both a checking and a savings account, or you might want two checking accounts to separate your bill pay money from your money for day-to-day business expenses.