Best Business Checking Accounts of 2022
Whether you are an entrepreneur or a small business owner, the most important thing to do is get the best business checking account. A business checking account allows you to manage the everyday finances of your business such as billing and invoicing, accounting, making deposits, budgeting, etc.
It also allows you to keep your business and personal finances separate, prepare taxes and legally establish the presence of your small business.
As an owner of a startup or a small business, finding the best bank for your small business can be a daunting task, especially with the plethora of banking options available today and choosing the right one for your business can be tricky.
So, to make things a lot easier for you, our team has scoured the market, compared the various options available and identified some of the best business checking accounts for your small business.
Why Do You Need a Business Checking Account?
As I mentioned earlier, if you’re a small business owner or are planning to start a small business, then a business checking account is a must-have, without which, you could be putting both your business, as well as yourself at great risk. Here are some of the reasons how you can benefit from a business checking account as a business owner.
Firstly, if your business is established as a corporation or LLC, a business account is a legal requirement to keep your business finances separate from your personal finances. While this is not a requirement if you’re a sole proprietor; nevertheless, it is a good practice to have a business checking account for all your business-related finances.
A business checking account allows accurate bookkeeping, makes it easier to distinguish between your business and personal expenses, allows you to prepare for taxation, helps to build a professional and credible image for your business and allows you to accept credit card payments from your customers and clients.
A secure business checking account having secure encryption will ensure that your money is safe, giving you complete peace of mind, while enabling the future growth of your business by allowing services like taxes, payroll, etc., applying for business loans and more.
Factors to Consider When Choosing the Best Business Checking Account
The best business checking account is the backbone of your small business. However, before choosing the right business checking account, you need to consider important factors such as:
Monthly Fees
Typically, banks charge a fee to maintain your business account and since you will be using the business checking account for everyday business transactions, look for banks with no or very low monthly fees.
Minimum Balance Requirement
Often, when you open a business checking account, banks require a minimum opening deposit. Other banks may require that you maintain a minimum balance, perform certain types of transactions or a specific volume of transactions, which will allow you to earn the APY stated by the bank or enable you to avoid the per month maintenance fee payment.
Transaction Limits
Often, banks limit the type or number of transactions that you can make using your business account, including checks, cash deposits or withdrawals and electronic transactions.
In case the number of transactions is exceeded, then the bank may charge you a fee for every transaction you make beyond the limit. So, it is important to choose a business checking account that will allow the average transaction volume of your business.
Digital Banking
Today, with the COVID-19 pandemic and also the increasing need for convenient banking, both online business checking accounts, as well as mobile banking is extremely essential.
The bank you choose should offer high-quality, functional and convenient online and mobile banking that allows you to make transactions via your computer or mobile phone rather than visiting a physical branch every time.
Tools Offered
Check what additional tools are offered by the bank along with the business checking account. Many business checking accounts offer free online and mobile banking solutions, online payments, invoicing, 3rd-party integrations, wire transfers, etc.
Additional Fees
You must check what other fees the bank charges for making use of your business checking account, such as overdraft fees, non-sufficient funds fees, returned items fees, stop payment fees and wire fees.
Room for Future Business Growth
Since the business checking account is essentially the starting point of your business banking relationship with the bank, ensure that the bank offers facilities that may become essential in the future as your business grows and expands.
Check for features such as opportunities to invest and save, adding treasury or merchant services and accessing lines of credit or loans.
Reviews of the Best Business Checking Accounts
When choosing the best business bank account, you must evaluate all the aspects of the business checking account offered by various banks and then decide which one works best for your business requirements.
There are plenty of options when it comes to choosing the best bank to partner with and so, I have compared various banks such as Novo, Chase, Bank of America, Lending Club, NorthOne and more. And, after evaluating the various options, I have concluded that the top 3 banks are Novo, BoA and North One.
I have reviewed the 3 banks, including their features, pros and cons and will tell you which bank is the best and why it is the best option for your business and you.
Novo — Best Online-Only Bank for Small Businesses
First on my review is Bank Novo, an online-only bank that is designed to make your business banking cost-effective, as well as efficient. Started in 2016 as a business banking platform, Novo is perfect for small business owners, startups, entrepreneurs and freelancers, offering a free business checking account.
Novo is a tech company, which is managed by its banking partner, Middlesex Federal Services.
Novo Pros
● Easy and Quick Account Setup: Setting up a Novo business checking account is super easy and you can get one started in just 10 minutes. Since it is entirely online, you can set it up from your computer or phone with just your personal and business information.
● No Minimum Balance Requirement: Novo does not have any minimum balance requirements for its business checking account and it allows unlimited free transactions.
● No Monthly Fees: Novo offers a free business checking account that does not have any monthly fees.
● Technology Integrations: It has integrations with various business tools such as Shopify, Xero, QuickBooks, Wise, Slack and Stripe that make your business transactions easier and also saves you plenty of time.
● ATM Fee Refunds: For any ATM fees that are charged to your business checking account, including the fees that are charged by other banks to use their ATMs, Novo refunds all the ATM fees. This is a huge plus, especially when you need cash and you don’t have to worry about locating a Novo ATM.
Novo Cons
● No Physical Branches: Novo is a completely online bank and it does not have any physical branches and may not be a great option if you prefer in-person banking.
● Not Easy to Deposit Cash: Since Novo is a fully online bank, it is not possible to make cash deposits.
● Can’t Send Wires: Novo does not allow you to send international or domestic wires.
● No Overdraft Protection: Novo does not offer overdraft protection, which is an important factor, especially for small startups. Novo also charges an insufficient fund fee of $27 in case the money is not sufficient in your business checking account.
Bank of America (BoA) — Best for Cash Deposits
One of the big 4 and the second largest bank in the US in terms of assets, Bank of America is a branch-based bank that offers two business checking accounts for small businesses i.e., Business Advantage Fundamentals and Business Advantage Relationship.
The Business Advantage Fundamentals is the business checking account that has been designed for small businesses requiring features and flexible tools at a very low per month cost.
BoA Pros
● Easy to Apply: It is extremely easy to start a business checking account with BoA in one of the 3 ways i.e., at a branch location, online or over the phone.
● Strong Network: BoA has a vast network comprising around 4,300 branch locations and 43,000 ATMs across the US.
● Unlimited Electronic Transactions: The business checking accounts of BoA offers unlimited electronic transactions free of cost, including debit card transactions, ACH transactions, deposits using mobile check deposit and electronic debits, at a BoA ATM or remote deposit online.
● Digital Tools: The BoA business checking account allows access to different digital tools such as Cash Flow Monitor, Zelle and Business Advantage 360.
● Online Banking: The online banking of BoA allows you to manage your transactions and statements, customize account alerts, pay bills, download the activity from Quickbooks and it also offers access to mobile banking allowing you to pay bills, request transfers, deposit checks and monitor any pending transactions via your mobile device.
BoA Cons
● Monthly Fees: Both of the BoA business checking accounts charge a per-month fee. The Business Advantage Fundamentals has a fee of $16, while the Business Advantage Relationship has a $29.95 fee per month. And, unless you qualify for a waiver, you need to pay the per-month fee. Also, if the number of transactions is exceeded per month or you deposit cash more than a certain amount, BoA charges a fee for that.
● Accounts Don’t Earn Interest: The BoA business checking accounts don’t earn any interest.
● Expensive Wire Transfers: The bank charges business checking account holders for incoming, as well as outgoing wire transfers. And, if your business involves frequent wiring of funds (in or out), then it may be better to look for a less expensive option.
● Additional Fees: Over and above the monthly fees, BoA business checking accounts charge other fees such as withdrawals at non-BoA ATMs i.e., $5 for international ATMs and $2.50 for US-based ATMs.
BoA also charges for wire fees and $35 for overdrafts. While BoA waives the fees for incoming wires, stop payments, copies of statements and checks, check image service, replacement of debit card or ATM card for the holders of Business Advantage Relationship accounts, all these services must be paid for by the account holders of the Business Advantage Fundamentals account.
NorthOne Business Checking Account — Best for Setting Up Sub-Accounts
Founded in 2017, NorthOne is a simple and quick business banking solution for freelancers and small businesses. NorthOne is an online-only financial and banking platform that partners with Bancorp to provide banking solutions.
NorthOne offers business checking accounts that work via its app, which is very user friendly and offers all the features you require to manage your business’ finances.
NorthOne Pros
● Unlimited Free Transactions: NorthOne allows unlimited transactions free of cost, including deposits, payments, transfers and use of debit cards. It also does not charge any fees for overdrafts, insufficient funds or ACH payments.
● Flat Monthly Fee: For a business checking account, NorthOne charges a fee of $10 per month and this is all that you pay and there are no hidden or additional fees. Also, NorthOne does not limit the number of transactions that you can make every month.
● Wide ATM Network: NorthOne allows you to use the ATMs at MoneyPass locations free of cost and it also allows you to withdraw cash from over 1 million Cirrus ATMs across the US.
● Sub-Accounts for Savings: NorthOne offers an unlimited Envelopes feature that allows you to set up sub-accounts free of cost and save money for future business purposes such as payroll, taxes or any other business expenses.
● Integrations: The NorthOne business checking account allows you to link to several 3rd-party apps and integrates with tools such as FreshBooks, QuickBooks, Shopify, Etsy, Square, Stripe, Expensify and Gusto.
NorthOne Cons
● Monthly Fee: NorthOne charges a fee of $10 per month for its business checking account and does not offer an option to waive this fee.
● No ATM Fee Reimbursements: NorthOne does not reimburse the fees charged by 3rd-party, out-of-network ATMs if you use them for cash withdrawals. You may also be charged a fee by the ATM owner.
● Check Deposit Limit: NorthOne allows mobile check deposits via a 3rd-party service known as Ingo Money and this limits the check deposits to a total of $7,500 per day and $15,000 per month.
● No Interest on Funds: NorthOne does not provide the option where you can earn interest on the money in the business checking account or the funds that you have saved in Envelopes.
Novo vs BoA
● The funds in the business checking accounts in both Novo and BoA do not earn any interest.
● Both Bank Novo and BoA allow technology integrations with various apps and tools like QuickBooks, etc. Though, Novo offers a lot more integrations than what BoA offers.
● Novo does not charge any monthly fee, while BoA charges a per-month fee for both its business checking accounts.
● Novo is an online-only bank, whereas BoA is a brick-and-mortar bank that also offers online and mobile banking options.
● Opening an account with Novo is extremely fast and hassle-free, whereas it’s a bit more tedious with BoA.
Novo vs NorthOne
● Both Novo and NorthOne are digital platforms and allow you to create small business checking accounts easily and quickly.
● Having accounts in both banks does not earn any interest on the funds.
● Bank Novo does not charge any monthly fees on the account, while NorthOne charges a monthly fee of $10.
● Novo does not have ATMs of its own and if you are charged fees for using other ATMs, Novo reimburses the ATM fees. NorthOne allows you to use the ATMs at MoneyPass locations and Cirrus network of ATMs across the US and the world; however, if you pay any ATM fee, NorthOne does not reimburse it.
BoA vs NorthOne
● Both BoA and NorthOne charge a monthly fee for their business checking accounts.
● Having accounts in both BoA and NorthOne does not earn any interest on the funds.
● BoA is a brick-and-mortar bank with branches in various locations, while NorthOne is an online platform.
● BoA has 43,000 of its own ATMs across the US, while NorthOne allows the use of ATMs at MoneyPass locations and over 1 million Cirrus ATMs across the US.
Frequently Asked Questions
Who Is Novo Best Suited For?
Novo offers a business checking account that is suitable for freelancers, contractors and small business owners. It is best suited for business owners who want a free business checking account, who do not need to deposit cash regularly and want to manage all their financial transactions online, without the need to maintain a minimum balance, but don’t mind paying a monthly fee for their checking account.
In short, Novo is best for businesses that mainly use electronic payments and want their banking expenditure to be seamless, affordable and as costs low as possible.
Who Is BoA Best Suited For?
BoA’s business checking accounts are best-suited for business owners who prefer physical brick-and-mortar banks and doing all their transactions in person rather than only online. The accounts are ideal for businesses that are cash heavy in terms of their financial transactions.
BoA is suitable for business owners requiring to make large cash deposits every month and don’t mind paying the per month fee or can qualify to have the fee waived. BoA is a large bank and is ideal for business owners whose business is growing and would like to take advantage of BOA’s financial or additional banking services in the future.
Who Is NorthOne Best Suited For?
NorthOne offers a business checking account that is suitable for startups, freelancers, small business owners or those who are looking for good customer service not offered by large, traditional banks.
It is perfect for business owners looking for a simple user-friendly app that allows quick banking transactions, along with traditional banking services and 3rd-party service integrations for an easy banking experience.
Why Choose Novo?
Bank Novo is an online-only banking platform that eases the banking processes immensely. Opening an account with Novo is very quick and easy and you can have a business checking account open in under 10 minutes.
Novo offers an excellent banking solution for businesses that mostly receive all their payments electronically. The unlimited free transactions, free online banking, reimbursement of ATM fees, etc. make Novo a convenient and practical option for small business owners.
Novo’s business checking account integrates with POS, apps and other business tools that help to streamline the bookkeeping and make other processes easier and quicker.
Why Choose BoA?
BoA offers business owners the best of both worlds of physical and online banking. It offers several easy ways by which you can avoid the per-month service fee.
The electronic transactions do not count towards the limit of 200 free financial transactions, which makes BoA a great choice for small businesses that conduct most of their banking transactions digitally.
Why Choose NorthOne?
NorthOne charges a low per month rate of $10 for the business checking account, which makes business banking hassle-free. There are no additional fees charged for anything, except for wire transfers, which allows you to set a budget and manage your business without the hassle of plenty of fees that can get expensive in the long run.
The Envelopes feature makes NorthOne stand apart from its competitors, which gives business owners the option of opening sub-accounts for various purposes and saving money in them for future use, thus keeping the savings of the business well organized.
Testimonials of Novo vs BoA vs NorthOne
I also looked at plenty of reviews of Novo vs BoA vs NorthOne and what people had to say about these 3 banks and their business checking accounts and these are some reviews I found.
Novo
A client said that they had looked at several options to open their business account and found that Novo was the best option for them because it:
● Does not charge monthly fees.
● Allows them to reserve parts of their income into different buckets, which is their most favorite feature.
● Allows seamless integration of their bank account with Stripe, QuickBooks, Shopify, etc.
● Makes transfers easy from the business to a personal account and vice versa and tells them how many days before it is transferred officially.
● Allows them to make easy payments to others via bank transfer or also make a check on the app.
Another customer said that as a sole proprietor and entrepreneur, they love Bank Novo because it is very simple and not complicated, which allows them to keep track of their income and expenses very easily.
Novo is perfect because it is free and does not have the fluff and bullshit that come with larger banks. They upgrade their features constantly and ensure good, customer-focused support.
BoA
A customer said that they have been using BoA for the last 12 years for their personal accounts. When they started their business, they applied for a small business checking account, which was declined by the bank although they had a credit score of 800. And, despite calling the rep and call center, the issue was not resolved and the customer was asked to reapply. Despite sending all the documents and leaving voicemails, there was no response from the bank and the customer says that BoA has lost them as a customer and they are planning to close their personal accounts as well.
Another BoA customer said that the bank is absolutely the worst and does not understand small businesses. They hold back checks and money and the customer has to keep holding the bank accountable for the FDIC regulations.
NorthOne
A client of NorthOne stated that they are trying to move the company’s money to the company’s savings account and the bank is holding onto their money and giving them a very hard time.
Another customer stated that NorthOne is not a good bank for small businesses and that they had the worst experience. When the customer contacted the bank about their account being locked, they were not able to help. And, despite following up for over a month, the bank has not transferred the funds and their phone numbers don’t work either.
FAQs
Can I Use My Personal Bank Account for Business Purposes?
As a business owner, it is highly recommended that you have a separate business checking account for your business, which will allow you to separate your business, as well as personal finances. A business checking account will allow you to deposit money and pay for your business expenses from the business account.
Having separate accounts for personal and business finances will help to make bookkeeping easier, streamline your tax filing, get access to merchant products/services like POS systems, mobile card readers, etc. and also protect you from any legal action that is taken against your business.
How to Open a Business Checking Account?
You can open a business checking account either in person or via phone at a traditional bank, while an online bank allows you to open an account online.
You need an EIN (Employee Identification Number), SSN (Social Security Number), two types of personal IDs, business license, legal incorporation documents, DBA name registration and Tax Identification Number to open a business checking account.
Can I Have Two Business Bank Accounts?
You can have both a savings account, as well as a business checking account for your business, which will enable you to work towards your financial objectives. For instance, all your new employee funds can be in one account, while the cash flow funds in another for easy management of finances.
Final Words
When looking for the best bank for small businesses, as an owner of a small business, you must look for a bank that will meet your business’s financial requirements perfectly.
While one size does not fit all, in general, it is a good idea to look for an account that has no minimum balance requirements ( Bank Novo ), has no or very low maintenance fees, no monthly transaction fees and offers useful features that can help you manage the finances of your business efficiently.
We hope that after reading my in-depth reviews of the top three business checking accounts along with their features, pros and cons and what customers think of these, you will be able to find the best business checking account for your small business needs.
