Which Is the Best Small Business Checking Account Bank?
A big part of running any business, small or big, is opening a bank account. It is something that is central to running the operations smoothly and getting money without any complications. A business checking account is the key to proper tax compliance, record keeping and legal considerations.
Having said that, there is no universal small business checking account that suits all businesses. Each business is different and has different needs and hence, a business checking account must be chosen based on individual needs and considerations.
There are a number of small business checking accounts offered by banks that you can consider. Here are three popular ones that we have compared just for you.
Best Small Business Checking Account: What to Look For?
Banking is an integral part of managing a business. This is even more crucial for small businesses because every small mistake may cause big harm. The more organized and streamlined things are, the better it is for the health of the business.
What exactly should you look for in a small business checking account? What are the factors that you need to consider while choosing a bank?
Why Should You Open a Checking Account For Your Business?
It may be tempting to stick to a personal account in case you are just setting up a business. However, opening a checking account may have more benefits than you can think of.
To begin with, a checking account keeps your business interests streamlined and organized. Your finances will not get mingled with your business ones and this will save you a lot of logistical hassles and complications later on.
You may be running a business that does not mandate you to open a checking account. However, do not let this tempt you to stick to a personal one. Opening a checking account will help you evade tax problems and also maintain a more professional image among your customers and stakeholders.
A business checking account offers financial protection and does not jeopardize your assets. It will also help you maintain a healthy credit score that will be beneficial for your business in the long run.
Tax filing gets complicated even for the biggest of businesses. When you are just starting, there is so much that needs attention. In the absence of a dedicated account, it may be difficult to track the expenses and income.
A business, no matter how small, needs an image to sustain itself. If you are asking your customers to pay into a personal account, chances are they won’t take you seriously. Hence, you must aim to open a checking bank account right from day one.
Business Checking Account vs Savings Account
These are the two most popular types of business accounts that people tend to choose from. But which one should you go for and why?
● Checking Account: This account helps you keep your business afloat and lets you run your business day to day. This ensures managing incoming money, paying vendors, etc.
This also ensures managing credit and debit cards effectively. Checking accounts offer several bonuses and perks and work well for businesses that are short on funds in the beginning.
● Savings Account: This account compliments a checking account and allows you to set aside some sum and earn interest on it. However, a savings account standalone is not going to solve any problems for you. It only offers a cushioning effect in times of crisis.
How to Choose the Best Checking Account for Your Business?
There are several factors that you need to consider while picking a bank for your business . These include:
Introductory Offers
This is something small business owners should check at the outset. Does the bank they are considering offer any discounts and perks for first-time customers? Initial deposits may sometimes offer bonus cash or low fees for opening an account. You need to be thorough with your research and go for the bank that has the best introductory offer to make.
Fee on Everyday Transactions
Does the bank you are considering charge a fee on ATM transactions or any other fee on any type of transaction that you will be undertaking daily? You need to ask a lot of questions and decide based on that.
ATM Access
Before finalizing the bank, check where can you access the ATM. What are the charges and reimbursements? You should not be taken in for a surprise in case you use the card elsewhere on a business trip.
Minimum Deposits
You need to check if the bank you are considering mandates you to maintain a minimum deposit. Sometimes, if you flout these, there can be charges and you should be aware of these at the outset.
Services
Due consideration must be given to the services offered by the bank or banks you are considering. These include if your bank has a mobile app that you can monitor on the go, what is the customer service like and are there any other services that you get complimentary by doing business with the bank?
Integration
It is important to check if your bank offers any services and avenues for integrating banking with other digital tools for ease of business. Most entrepreneurs today manage a big chunk of their business online and if they can get their banking system and other interfaces integrated, it is only going to make things easier for them.
JP Morgan Chase: Things You Need to Know
Chase is the banking and consumer arm of JP Morgan and has several thousand branches and banking operations all across the world. It offers many great incentives for opening a bank account to businesses and has a diverse offering when it comes to business accounts based on your size and needs.
You can gauge the network and the reputation of the bank by its assets that amount to nearly $2.7 trillion.
Pros
● The offering of generous new account bonuses makes it a lucrative option for entrepreneurs and businesses. For instance, you get a bonus of $300 if you deposit $2,000 within 30 days of opening an account with the bank.
● Since it has a large network worldwide, the ease of doing business and transactions improves significantly.
● The credit cards of Chase are worthwhile and offer many rewards on usage. This gives a lot of incentives to small businesses.
● The bank offers several benefits for linking the business account to a personal account. This is ideal for startups and entrepreneurs.
● You have the option of unlimited deposits.
Cons
● You need a minimum balance of $2,000 to earn the bonus and even post that. You only have 30 days to meet this requirement after opening an account.
● You have to maintain the balance for 60 days else the bonus will drop. This may be an issue for small businesses and entrepreneurs who are just starting.
● Low transaction limits are charged before the fee.
● This offers low interest rates and high monthly fees on savings and checking accounts.
● It warrants high non-Chase ATM fees.
What Is This Best Suited For?
Since this bank has a robust network of branches and ATMs, it is best suited for those who prefer traditional methods of banking i.e. in-person banking. If you are starting out and only prefer online banking, there are a number of options that you can explore.
This does not mean that it doesn’t have digital connectivity. It does have a robust digital network and has a great mobile app but it is still suited for those who are at a slightly better risk appetite as opposed to those who have little backing.
Why Should You Choose JP Morgan Chase?
You should choose JP Morgan Chase if you are a proponent of traditional banking. This is a highly consistent bank and you are sure to benefit from its robust network. It is known for its effective in-branch and online banking services. The customers who feel more comfortable with institutional backing and trust bigger banks are likely to find this most useful.
Mercury: Things You Need to Know
If you are a startup working in the tech arena and looking for a comprehensive banking solution, this is a new age bank you can go for. Mercury offers small businesses the option of opening both checking and savings accounts with no monthly fee, therefore giving you the headspace to focus on business upscaling and not banking logistics.
Pros
● This banking system is designed with small businesses and startups in mind and offers scalable digital tools and a functional interface to customize your banking.
● If you scale up and grow your business, you don’t have to switch to another bank as Mercury offers a platform called the Mercury Tea Room for businesses holding a bigger sum.
● Once a business has more than $250,000, it can opt for free domestic and international wire transfers.
● There is no minimum opening deposit amount associated with Mercury.
● You can open a checking and savings account on one platform.
● Offers a robust network of ATMs for fee-free withdrawals.
● API access to customize banking as per your needs and requirements.
Cons
● It is not available to sole proprietors.
● Mercury does not offer the avenue of cash deposits for businesses that deal in cash.
● Android users cannot access the app on their phones.
What Is This Best Suited For?
Mercury is suited to business owners who are looking for a stress-free online banking solution sans any fee and have a propensity to manage their accounts online.
This is also an ideal banking solution for those who want to integrate banking with several tools while not wanting to deal in cash all the time.
Why Should You Choose Mercury?
Choose Mercury if you are an iOS user and want to access an online banking system that integrates many digital tools with banking tools. If you want to handle your business online and need an array of services such as fee-free cash withdrawals, virtual debit cards and no balance requirements.
Novo: Things You Need to Know
If there is one bank that is ideal for small business owners, it has to be Bank Novo. We tell you why? It charges no monthly fees, offers unlimited refunds for ATM charges and has a big focus on digital banking.
This is ideal for startups and young entrepreneurs who love adventure and want everything on the go. For the entrepreneur who is limitless, this bank offers an avenue for matching their steps and helping them soar to greater heights.
Pros
● It has a robust website and app and offers a host of services online and, therefore, is ideal for the business owner who loves a cashless economy and wants to conduct business on the go.
● There are no minimum fees or monthly balances that one needs to maintain.
● Novo offers unlimited fee-free transactions. If you want to get money from outside, there are no wire transfer fees that you would have to pay. Additionally, there is no ACH transfer.
● Bank Novo offers refunds on ATM fees worldwide.
● The bank offers unlimited invoicing and bill pay options and offers the avenue to do paper checks for free.
● Offers awesome integration with new-age business tools such as Shopify that are a hit among entrepreneurs and small business owners who are just starting.
● With a small business checking account in Novo, you are liable for getting discounts on many business software that may be of interest.
Cons
● This is a digital-only bank.
● Novo does not let you earn interest on your balance or deposit in the bank.
● You cannot deposit cash in Novo nor can you send domestic or international wire transfers. However, TransferWire integration is available on international wires.
What Is This Best Suited For?
Bank Novo is suited to several business owners who want to make their life easier and do not have to deal with charges on flouting minimum balances etc. Novo works best for:
● Businesses that want a free business checking account.
● Businesses and entrepreneurs who do not deal with cash regularly.
● Entrepreneurs who travel around for work and do not want to pay ATM fees after each transaction.
● Businesses and businessmen who want all aspects of their businesses connected to their finances and banking systems.
● Solo business owners who are figuring out stuff.
Why Should You Choose Novo?
If you want a streamlined banking service that allows you to manage multiple accounts in one place, this is the bank you need to be opening an account at.
It is built to make doing business easy for small businesses and entrepreneurs who are starting. This is perfect for those who are into cashless business or are moving towards it.
JP Morgan Chase vs Novo: What Is Better?
Both banks offer good banking solutions but when it comes to small business owners, Novo is a far superior option. Here is why:
● It is made with small businesses and their challenges in mind. On the other hand, Chase is more suited to businessmen who prefer traditional modes of banking.
● Novo offers better technology integrations to ensure that your business runs smoothly.
● The application process for Novo is faster and less cumbersome as compared to that of JP Morgan Chase. This is why small business owners without several logistical and human resources will be better off with Novo.
● Bank Novo does not charge any hidden fee for any of the services that make it a great banking solution for small businesses.
● There is no minimum account that you need to maintain in Novo and this offers greater flexibility to small businesses.
Novo vs Mercury: What Is Better?
These are two banks that offer great services to small business owners and entrepreneurs. But which one is better suited to the small businessman? And why?
● The biggest disadvantage of using Mercury over Novo is that it does not have an app that runs on Androids. This is a big bummer for all those who do not own an iPhone but still want to conduct business on the go.
● Novo offers better customer support than Mercury. For instance, the latter only offers online support while Novo has both business hours and online support.
● Novo offers live training online which is not something Mercury offers at the moment.
● Novo has double the amount of integrations than Mercury and this is a big draw for business owners who like to keep everything integrated.
JP Morgan Chase vs Mercury: What Is Better?
● Mercury requires no maintenance fee as opposed to Chase that has a $15 monthly fee (though it is waived if you meet certain criteria).
● Mercury has an API that makes way for customized banking experience. Chase, on the other hand, offers perks of large banks.
● Mercury is more international in its appeal as opposed to Chase that is not so international. Therefore, businesses that are global may not benefit from banking with Chase.
As you can see, while JP Morgan Chase and Mercury have their own benefits, they don’t compare to Novo. Novo offers a seamless account opening experience that isn’t matched by either of these banks, along with a host of benefits such as no fees and no hidden charges, apart from the stellar customer service on offer.
Small Business Checking Account Banks: Frequently Asked Questions
We have tried to comprehensively cover a lot of information on the best checking accounts for small entrepreneurs and business owners.
Though our analysis and reviews place Novo above the other two, here are a few other questions that you must read to make a better decision in case you are looking for a business banking solution.
Does Novo Offer Savings or Interest-Bearing Accounts?
Sometimes business owners may look at avenues of expansion and therefore, think about a bank that also offers savings accounts in addition to a checking account. Since Novo gets our vote for being the most comprehensive bank for small business owners, this is a question many tend to have.
However, Novo does not offer a savings account currently. It also does not offer interest on any of their checking accounts.
What Is the Best Bank for a Small Business Account?
When one starts a business, they want to do business with the best bank out there. This question, therefore, is unavoidable. However, this is a question that cannot be answered in absolute terms.
For one, it depends greatly on the personal preferences of the user, the type of business and what they are looking to get out of it. For instance, if you deal in a lot of cash, there is no point in choosing Mercury. Similarly, if in-person banking or traditional banking is what you prefer, you ought to go with a more conventional choice such as JP Morgan Chase.
Novo, on the other hand, offers a lot of ease of doing business by offering digital integrations and invoicing solutions. Hence, you must choose your bank after thinking about all these aspects.
I Am a Freelancer. What Is the Best Bank to Open a Business Checking Account With?
A few new-age banks designed for entrepreneurs do not cater to sole proprietors despite being extremely digitally savvy. Novo happens to be our top choice for freelancers because of the many benefits they offer such as no monthly fees, no minimum balance and third-party integrations.
The area where they win big is their integrations. This makes doing business with them easy and also helps you streamline and manage your business better.
Besides, it is way faster to access and opening an account is breezy without any waiting and bureaucratic delays. It is simple and hassle-free, ideal for startup owners.
Still don’t believe us? Check out this review of Bank Novo from a user who places it above all banking solutions for small users.
Final Thoughts
This is the age of startups and businesses. For any business, small or big, opening a checking bank account is a crucial part of their business. It makes them more organized and helps keep their business interests streamlined.
There are several banking solutions available to cater to this wide and growing audience. The space is full of traditional and new-age players that are trying to lure customers in their ways.
All you need to do is to be thorough in your research and weigh the offerings of these banks against your needs and requirements.
After analyzing several banking solutions, we have found Bank Novo to be an ideal choice for startups and small business owners. The number of services it offers is too many to count and the ease of usage and their impeccable customer service just act as the cherry on top. This is not just us saying this.
Novo Reviews:
● #1 https://www.trustpilot.com/users/6134c320321e4b0013582c40
● #2 https://www.trustpilot.com/reviews/6131842f9c391649d850dc2b
JP Morgan Chase Reviews:
● #1 https://www.trustpilot.com/reviews/6137128ecc0087e8ef702e48
● #2 https://www.trustpilot.com/reviews/60f9ef29f9f48709d4bc7475
Mercury Reviews:
● #1 https://www.trustpilot.com/reviews/61305afacc0087e8ef6bc128
● #2 https://www.trustpilot.com/reviews/61098eedf9f48709d4c71e39
