Best Business Checking Accounts
Based on In-Depth Reviews

It’s worth noting that the term “business checking” is a bit of a misnomer. The lines between checking, savings, and other types of accounts have blurred greatly in recent years as banking customers embrace online services more and more. The classic model of a single-purpose checking account where you write and mail checks and then wait for them to clear is largely a thing of the past.

To get a sense of how far “business checking” accounts have come from their origins, we talked to Jill Wersell, owner of Wersell’s Bike & Ski Shop in Toledo, Ohio--a family business started back in 1945. Interestingly, the bike shop’s checking account predates her tenure as owner, which started in 1983. You might think a 74 year old business would do things the old fashioned way, but you’d be wrong. Nowadays, Jill does most of her banking online and can’t remember the last time she wrote a check. “99% of everything is just done online in the banking world,” she told us. “Pretty much the only reason I go to a bank nowadays, to be honest with you, is to get change.”

Photo by Jill Wersell

Today’s business checking accounts can include traditional checking, online banking and transfers, linked credit cards, and account analysis, among other features. Some even accrue interest on balances, though not nearly at the rate of dedicated savings accounts. The familiar term “business checking” is still used by most banks providing these services and is the name we’ll be using throughout this article. However, the nature of the accounts themselves has changed with the times.

When we began researching business checking, we were surprised by how similar accounts are from bank to bank. No one ever claimed that banking is the most exciting industry in the world, but the degree to which banks don’t attempt to differentiate their products is confusing, frankly. Generally speaking, fees, transaction limits, and other specifics of accounts within the same class didn’t differ all that much across banks. If anything, the choice of stock photo images of happy professionals conducting business was the primary difference from site to site.

We decided, then, that for this topic, we’d need to dig a little deeper than the advertised features. If, indeed, there is any real difference between these accounts--something that separates the good from the bad--we knew we couldn’t rely on the marquee features. Beyond simply reading the fine print, we’d have to read between the lines to get at the truth.

Why Business Checking?

For the small business owner just starting out, a separate checking account may seem a little silly. After all, if you have no employees other than yourself, and your global headquarters is in your garage next to the laundry machines, what’s the point of opening a new, separate account? Besides, for the most part, business checking accounts are more expensive than personal accounts. Why take on the extra expense right when you need to be leveraging every cent you have?

The answer comes down to one word: liability.

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While sole proprietor businesses aren’t legally mandated to have a business checking account, it’s not a bad idea to get one anyway. Operating a business opens one up to a wide range of risks both legal and financial. A business account insulates the owners and operators of a business from some of these risks. It also provides fledgling enterprises with useful performance indicators such as the ability to gauge and improve efficiency as well as the professional credibility that comes with rigorous accounting procedures and branding. After all, paying for something with a check in your business’s name looks far more legitimate than using your personal account.

When we asked Ken Zuercher, founder and owner of Zuercher Amplification, which makes and sells classic tube-driven amplifiers for electric guitars--coincidentally also in Toledo, Ohio--why he opened his business account, he told us that “it was for tax purposes. I found myself spending too much time trying to keep the business taxes for the business income and my family income separate.”

Photo by Ken Zuercher

When a business exists as a separate legal entity from its owner(s) (e.g., as a corporation or an LLC), a separate business account is required. For one thing, accounting and reporting requirements for business taxes are more complicated and strict than they are in the personal sphere. If you accidentally claim a business expense as a personal expense--or vice versa--because your personal and business assets are commingled, you may be opening yourself up to charges of tax fraud or an audit of yourself and your business. These are headaches you certainly don’t need.

Lawsuits are another liability you want to protect yourself from. If someone hurts themselves with your product or on your business property, or sues for some kind of intellectual property infringement, you need to be personally protected. While it’s unfortunate that your business could go under if a lawsuit doesn’t go your way, know that a business account acts as a firewall, lessening the risk to your personal assets. If they’re intermingled, asset seizures won’t stop with your business. They could include personal holdings, your car, and even your house.

According to the Small Business Administration, just over 20% of new businesses fail within their first year of operation, and only half survive five years. These numbers are not meant to discourage, but rather to illustrate how difficult it is to successfully get a new business off the ground. Businesses, regardless of how new or old they are, fail for all kinds of reasons. You may have the best product or service, but a million things could go wrong. Keeping a bit of daylight between your personal money and that of your business will prevent business risks from becoming personal risks.

Businesses with multiple owners, in particular, should welcome the risk mitigation a shared business account affords. At the very least, such an account might just save your friendship with your business partners. Think of it as a form of relationship insurance.

What’s the Difference Between Personal and Business Checking?

The difference between personal and business checking is, strictly speaking, not much. Business and personal checking accounts operate in much the same manner (remembering, of course, that modern accounts are often hybrids). The only real differences between the two are in fees and the sign up process, which requires more documents for a business account.

Business accounts usually have higher fees than their personal counterparts and require larger minimum balances. These balances tie up funds that could otherwise be used to grow the business and can seem pretty onerous to the small business owner. And while we sympathize with that, the choice of checking account shouldn’t hinge on lower balance minimums, particularly if such a choice results in disproportionately inflated expenses due to other, hidden fees. Suffice it to say, what sounds good in the account manager's office is not a full accounting of the costs you can expect to incur.

It also may make sense, depending on your business model, to open a business savings account instead of--or in conjunction with--a checking account. Your money will be working a little harder for you if you can afford to let it sit, and have limited monthly transaction needs.

Finally, it’s worth noting that a check written from a business account will have the name and address of your business on it in place of your personal information. This small nod to professionalism will not go unnoticed--personal checks, on the other hand, scream “amateur hour.” Make no mistake, it’s not a good look when you’re trying to prove the legitimacy of your new business.

All These Accounts Look the Same. How Do I Choose?

Spend a few minutes researching different business checking accounts and you’ll notice that most of them appear to be very similar. Even the promotional materials banks use usually touch on the same three points: monthly fee and how to avoid it, transaction limit, and minimum balance needed to open the account. That most banks don’t put much effort into promoting this product is interesting considering there are currently around 30 million small businesses in America and almost a half a million new ones are started every year. It might be that the high failure rate of new businesses dissuades banks from aggressively pursuing this market. In any event, these three criteria are a poor way to accurately judge the promoted accounts.

We spoke to William F., a VP in commercial banking for a large regional bank in the Northeast about why banks don’t try to differentiate their business checking accounts more. He told us that “a checking account is a bedrock product for anyone from an estate to a business to you and me. We all need a place to ‘put’ the money we get and a method to ‘pay’ for stuff… ...the checking account is a ground floor product from which a larger banking relationship can be built upon.” As a “bedrock” product, then, banks purposely build and market a time-tested, fairly standardized offering.

The best way to judge them, as we’ve previously mentioned, is to read between the lines. While a low or no fee option seems like a no-brainer, those accounts typically allow for fewer monthly transfers, or have other restrictions and hidden fees. If you repeatedly go over the transfer limit, overdraft, or find yourself paying ATM or check cashing fees, you might discover that your “low fee” account could have you paying much more than higher end accounts. This is not to suggest we’re advocating an account on a higher tier--it is not our job to upsell you. What we mean to say is that it’s important to choose an account that works for your particular business needs.

Do the math--estimate your business’s monthly needs and choose the account that best fits that criteria. As with so many other products, the cheapest business checking account is not always the best. Nor is the most expensive account.

What Counts as a Transaction?

This is an excellent question, and is a bit more complicated than the simple number of checks you have going in and out of your business. In short, the transaction total includes the checks mentioned, plus ACH credits and debits, and all online transfers and debit card transactions. While none of these alone might amount to that much, when combined, they add up quickly.

Let’s say, for example, that you have a little business selling Whozits. Your monthly payroll is four employees, including yourself. Payroll software is typically too expensive for businesses of this size--usually you’ll pay a flat monthly rate depending on features, plus a surcharge for each employee--so you’re writing out these paychecks yourself.

Your business operates out of a small storefront you rent, the cost of which is also paid by check every month. Utilities--electricity, water, and internet--are not included in the rent, and you pay them online using an automated, recurring payment. Meanwhile, your Whozit supplier invoices biweekly to keep you flush with stock. Whozits, it would appear, are a very popular product.

Count it up--that’s already ten transactions right there. This doesn’t account for any incoming transactions (Whozit sales, investments your friends might have made into your fledgeling company, or transfers from an outside savings account) or unexpected expenses (buying lunch for your team when they exceeded productivity goals, or paying a plumber to fix a leak in the office kitchen). Even a very small business can expect a fairly large number of transactions a month. It may be worth it to skip the account with a transaction cap of 50 and go to the next account tier.

Why Should I Care About the Minimum Balance?

Business checking accounts are really only for small businesses. Apple’s Tim Cook, for instance will not be reading this article to decide what to do with his company’s reported Q1 2019 pile of $245 Billion in cash. Though, if he is, he can go ahead and choose one of the premium high fee accounts. Apple can afford it.

More than a third of small businesses with employees and close to half of one-person ventures start out with less than $25,000 in capital. Even more surprising, 22.5% of businesses with employees and 39.5% of “one-man” or “one-woman bands” start out with less than $5,000 in capital. That’s less than the Kelly Blue Book value of a used 1994 Jeep Wrangler.

What this means is that these businesses are going to be cash-strapped for a good portion of their startup phase until they become profitable. Even a bank that offers to waive its monthly maintenance fee when a daily balance of $3,000 is met is pricing out at least a quarter of potential new small business clients.

After money spent on articles of incorporation or other licensures, business equipment and supplies, and whatever other overhead a business incurs when first starting out, a balance of $3,000 can be an impossible achievement. Though a maintenance fee of $25 doesn’t sound like a lot if you don’t meet the fee waiver threshold, it does amount to an unfortunate extra expense right when a business needs to be accounting for every outgoing penny.

Keep in mind that most accounts also have a minimum opening balance which should not be confused with the monthly minimum balance. Fortunately, though, the minimums there are much more manageable--often no more than $100.

The reason banks incentivize higher balances comes down to a fundamental aspect of banking--not to mention the global economy as a whole. As William F. explains, “Checking accounts provide a low-cost source of funding for our loans. Banks operate on net interest margin. Basically, the income we make from interest paid on a loan less the cost of interest paid on deposits. If you are a credit card company getting 15% rates on your borrowings then you can afford to pay up at 2.50% for jumbo CD’s to fund your outstandings.” In short, banks essentially borrow from their deposits--including business checking account balances--to fund mortgages, car loans, etc. The more money you have sitting in your account, the more money the bank can lend.

Business Banking in the Gig Economy

According to Forbes, there were 57 million people working in the gig economy in 2018. This number is only expected to increase as more people pick up side hustles or even work full time on Airbnb, Grubhub, Ebay, Etsy, Lyft, SoundCloud, Uber, and the dozens of other sharing and freelance marketplaces which seem to be popping up every day. What a good many of these gig workers don’t understand is that because of how these services are structured, working as an Uber driver, for instance, means that they are actually business owners. As such, they’re subject to similar legal and tax requirements as our fictional owner of the Whozit business.

Some people in these industries choose to incorporate as an LLC for tax and liability purposes. Not knowing your particular situation, we will refrain from making a recommendation either way. We’ll leave that decision to you, your accountant, and your lawyer. Regardless of the structure, we strongly recommend opening a business checking account.

Sticking with the Uber example, consider your expenses as a de facto business owner. To begin with, Uber doesn’t provide you with a vehicle, and in fact requires that vehicles be no more than eight years old in some cities. If your vehicle doesn’t meet that requirement, you’re on the hook for the cost of a newer model. If you can’t buy a vehicle outright, you need to cover a down payment, auto loan payments, and registration. After that, your expenses will include gas, regular maintenance, cleaning, and insurance.

Or, suppose you have an Etsy shop selling paintings of historical British monarchs reimagined as cartoon animals--we’re not judging. Working from home, your overhead shouldn’t be too huge, but you’ll still need to shell out for paints, canvases, brushes, packing materials to ship your masterpieces, and postage for same.

Some of the expenses from these examples are tax deductible as they pertain to the operation of your business. As we’ve noted a number of times, tracking these expenses as well as the income from your business can be extremely beneficial when it comes to tax season. Taxes aside, a separate business account will highlight just how much you’re earning (and spending) on your side hustle.

You may not think of your little side hustle as a “business” per se, but there’s a whole ecosystem of businesses catering to the geek economy that do. For instance, there are now insurance companies popping up specializing in personal/commercial auto policies specifically for ride-share drivers, and commercial home/renters insurance for Airbnb hosts. Meanwhile, shared workspace companies like WeWork are popping up across the country, with tens of millions of square feet of office space available to freelance micro businesses. App developers and start ups around the world are working furiously to provide valuable, lucrative services for your very real business.

Beyond the Numbers

There are a number of other factors to consider when comparison shopping business checking accounts besides fees and balances. User experience is an important consideration and depends on your personal style. Generally speaking, there are two schools of thought when it comes to banking experience: there are those who prefer to bank in person in a brick and mortar bank branch and those who prefer a fully online experience.

Even if you prefer in-person transactions, a powerful and efficient online experience via website and app can mean the difference between paying your bills on time and wasting money on late fees. Conversely, top notch, live customer support is definitely required regardless of how you prefer to conduct your banking. The best business checking accounts excel in both categories.

When describing why he chose the regional midwest bank he uses for Zuercher Amplification’s business checking needs, Ken Zuercher said that “the main thing they offer is personal service.” He then reminded us that “when you know your banker, you’re happier.”

Banks that offer other financial products that can help your business grow should be considered more attractive options. In particular, some banks offer existing customers preferred rates on small business loans, which can be an essential part of growing your business. Depending on where you see your business going in the next five to ten years, it may be a good idea to choose a business checking account now that will allow for preferred loan rates down the road.

Sign-up bonuses are often cited as the deciding factor for choosing an account, but our team determined that, for the most part, such perks should be considered irrelevant to your decision. Signing bonuses change often, and usually offer little in the way of tangible benefits. For instance, we saw a bank offering a $1,000 bonus that required an opening deposit of $25,000 and a $25,000 balance on the 180th day. While $1,000 certainly seems attractive--who wouldn’t welcome an extra kilobuck?--considering that 58% of new businesses are started with less than $25,000 in capital, and even fewer would be able to leave that amount of money in reserve, there aren’t many businesses that would be able to take advantage of this offer.

Because there aren’t many differences with these accounts, you aren’t at much risk of making a wildly bad choice. The process is fairly simple:

1. Do some forecasting. Come up with a rough estimate of what your monthly needs will look like. This should include number of transactions, how much money you expect to maintain in your balance, and what other services you may need. Will you need to make night drops, international wire transfers, or secure a safe deposit box? All of these services cost money.
2. Estimate in hand, look for accounts and banks that roughly match your needs. If you know you want to be able to walk into a physical bank and talk with an employee if there’s a problem, online-only accounts should probably be avoided.
3. Read the complete schedule of fees for each account. It might be worth paying an extra $10 a month for the next level account if you determine that the extra services fees will end up costing you more money in the long run.
4. If you find that you’re paying more every month than you thought you would, don’t panic. You’re not committed to this account for life. You can always close the account and open one that better fits your needs. The same goes for well established businesses--there’s no reason to settle for an account you’re not happy with.

Other Kinds of Accounts to Consider

Credit Unions Are a Great Local Option

Credit unions can be an excellent choice for small businesses with a regional customer base (think local contractors or café owners) and businesses that handle a lot of cash (liquor stores and laundromats). Credit unions typically offer lower or fee free accounts, and have a reputation for better customer service than regular banks. They’ve also historically offered higher interest rates for interest bearing accounts and lower rates for loans, though of course rates vary from credit union to credit union, so you should do your research while shopping.

Because credit unions are usually very local institutions, we’ve decided not to include them on our best for list. After all, how does it help the Pittsburgh reader to learn that Pasadena has a top notch credit union they’ll never be able to use?

Another item in the demerit column is that credit unions tend to fall behind regular banks when it comes to apps and online services since they lack the big bank resources to develop new technologies. However, if most of your business is done locally, this shouldn’t be much of a concern.

Scale up With an Analysis Account

Some banks offer what’s called an “analysis account” in a tier above their premium business checking options. These accounts are marketed to businesses with larger daily balances than your typical venture operating out of the family garage. As businesses scale up, their banking needs become increasingly complex. Transaction limits of 100, 200 or beyond can easily be exceeded on a monthly basis while other specialty fees rack up at an alarming rate.

Analysis accounts accrue credits based on daily balance and the bank’s credit rate. These credits are then used to offset--in part or in whole--the monthly à la carte costs of the account. This in contrast to charging a flat monthly fee as with conventional business checking accounts with additional costs assessed as needed.

These accounts get their name from the monthly analysis of account activity, costs, etc. provided to the account-holder(s) by the bank. This can be helpful in formulating cash management strategies and other business planning needs. However, these accounts are not for companies with lower cash reserves. Bank of America, for instance, offers an analysis account that requires daily balances of at least $60,000.

Because these accounts are for larger businesses and fee assessment is so tailored to each individual business, we can’t in good conscience recommend them in any of our “best of” categories.