Best Bank for Small Business: How a Small Business Bank Can Help You Succeed

To safeguard their earnings and establish a financial history for the company, small businesses require a specialized checking account in addition to savings, credit cards, and other charges. Which bank, though, provides the finest services for your company? We analyzed small business banks to help you choose which bank is ideal for your particular needs. We considered cash deposits, mobile check deposits, accessible ATMs, account kinds, fees, and more.

Running your own business requires a lot of financial responsibilities, from handling payroll to planning for office supplies. Opening a business bank account is an excellent first step to managing your funds precisely for this reason. Whether you run your business as a one-person operation or with several personnel, keeping your personal and professional finances separate is wise.

Therefore, unlike reading your statements, a company bank account makes it simple to see the paid bills, expenses incurred, and any payments you’ve received. Additionally, you may build up your business credit, which is crucial if you want to apply for a small business loan or a corporate credit card.

If it is the first time opening an account for a business, many queries come to mind, like the best bank for small business, How to pick a bank account for your business?, How do you open a bank account for your business? And much more.

To all answers and concerns, this article will cover all the aspects of the best business banks.  There’s no need to worry if you’re new to opening a business account because this article is an in-depth guide on the best bank for small business.

Best bank for small business

A small business owner owns a company with fewer employees or lower revenue than a corporation or a typical-sized company. If this describes you, you may consider where to open a business account.

Small businesses typically operate on a smaller scale with fewer people. They may not have the same resources as a corporation or more significant business, even though the definition of a small business is somewhat ambiguous. However, a sizable chunk of the business sector comprises tiny enterprises. As stated by the U.S. According to the Census Bureau, 54.4 percent of enterprises in the United States had less than five employees as of 2018.

The COVID-19 epidemic hugely impacted small business expansion, particularly for online enterprises. According to a poll by Venture Forward, a research project of the web hosting company GoDaddy, 2.8 million more small internet businesses launched in 2020 than the year before. One-fifth of these businesses, an increase of 8% from before March 2020, were founded by otherwise unemployed persons, and 90% have ten or fewer employees.

A small firm must open a bank account to manage its operation and maintain its financial stability. Here is where to get one, what to watch out for, and how one of these accounts can help you if you are a small business owner seeking the ideal business account.

Following are the best banks for the small business;

• Chase
• Axos Bank
• Navy federal credit union
• Wells Fargo
• M&T bank
• US Bank
• Bank of America business
• Novo
• Mercury
• Silicon valley bank
• Axos bank
• Bluevine

Chase

If you’re a small-business owner seeking a typical banking experience, Chase is your best choice. In addition to having facilities throughout the country, Chase also offers some of the most excellent online and mobile banking services.

For business credit cards, Chase is a beautiful bank. High-value rewards are available with Chase Ink Business Preferred. It can apply that to free and reduced travel. It is simpler to manage everything with one online banking login if your checking and savings accounts are in the exact location.

However, you can incur charges if your small business doesn’t keep a $2,000 minimum balance. Chase wins because it provides everything your company would require, including a wide selection of locations, reliable business credit card options, and great online and mobile banking platforms.

Pros:

• Locations throughout the nation
• Prestigious credit cards with rewards
• Banking online

Cons:

• $2,000 minimum balance to avoid fees

Axos bank

For the most acceptable online checking account for small businesses, Axos Bank won our award. When it first started in 2000, Axos Bank was a pioneer in online-only banking in the United States. Therefore, the organization has a lot of expertise in offering financial services to business and private clients.

The business interest checking account is cost-free and has an average daily balance of $5,000. You will need to pay a $10 monthly fee otherwise. The report only allows up to 50 free monthly transactions, making it unsuitable for larger companies that require many transactions or startups with small daily balances. But it also offers fantastic online and mobile banking alternatives and pays interest, which is now 1.01% APY.

Axos provides up to 200 free things each month, an essential business checking account without a monthly cost, and other freebies. Depending on your needs, this can be superior to the Business Interest Checking account.

In addition to CDs, a full range of cash management services, and money market and savings accounts for businesses, Axos also provides these options. However, you’ll need to search elsewhere if your small business demands cash deposits. Therefore, Every purchase is completed online. Not only for online banks, but any bank would also find it rather impressive. Consider Axos Bank if your small business requires just online transactions.

Pros:

• A pioneer in banking exclusively online
• Two hundred free transactions per month are included with a basic business checking account.
• Business money markets and savings funds are accessible.
• Business Interest Checking Account: 1.01% Annual Percentage Yield

Cons:

• To avoid a $10 monthly fee on the Business Interest Checking Account, you must maintain an average daily balance of $5,000.
• The Business Interest Checking Account offers only 50 free transactions per month.

Navy federal credit union

Navy Federal Credit Union provides excellent business banking services, making them ideal for various small enterprises. These include loans, credit cards, payment processing, company bank and savings accounts, and even retirement and insurance for you and your staff. Moreover, credit unions are nonprofit organizations. As a result, they frequently have lower costs and more excellent savings interest rates than for-profit banks.

You must first sign up as a business member to open a business bank account with Navy Federal. Therefore, you must be an active-duty military service member, a veteran, and have connections to the U.S. Department of Defense, or have a member of your immediate family who is a member of Navy Federal to qualify for this benefit.

To begin as a business member, you will also require a $250 opening deposit for sole proprietorships or a $255 opening deposit for corporate entities. Additionally, you must already be a regular credit union member, which calls for a $5 deposit into a savings account.

However, if you satisfy the membership requirements, don’t pass up the chance to save money with a business checking and savings account at Navy Federal. Credit unions are often more aimed toward consumers than businesses.

Pros:

• Offers loans, credit cards, payment processing, and business checking and savings accounts.
• Includes insurance and retirement benefits for business owners and their staff.
• more excellent interest rates than for-profit banks and lower costs

Cons:

• Veterans, active-duty personnel, employees of the U.S. Department of Defense, and members of their immediate families only.

Wells Fargo

Because it has more locations than any other bank in the US, Wells Fargo is our top pick for the best small business bank for the number of branches. Therefore, It also has an extensive network of ATMs. Wells Fargo is one of the biggest Small Business Administration lenders for SBA loans, in addition to having a lot of locations.

Three separate business checking accounts are available from Wells Fargo. These accounts include monthly fees, but you may typically avoid them by maintaining a minimum level. To avoid costs, the Initiate Business Checking Account requires a minimum deposit of $500.

Moreover, Wells Fargo provides almost every service your company would require because of its size. It covers services for business taxes, payroll, and human resources. Wells Fargo is one of your most acceptable options if your small business requires a lot of cash. Therefore, you can deposit money at the largest branch network and withdraw cash from its extensive network of ATMs without paying a fee.

Pros:

• Advantages: More locations than any other bank in the country.
• The biggest bank
• provides payroll, human resources, and corporate tax services for Small Business Administration loans.

Cons:

• The Consumer Financial Protection Bureau penalized Wells Fargo $185 million for creating millions of bogus accounts between 2011 and 2016.
• Every business account has a monthly fee.

M&T bank

Consider using M&T Bank for your small business banking if you reside on the East Coast. New York, Maryland, New Jersey, Pennsylvania, Delaware, Connecticut, Washington, D.C., Virginia, West Virginia, Vermont, and Massachusetts are among the states where M&T has 700 branches.

Relationship managers at M&T Bank provide you with more than just bank accounts and assist with customer care issues. Moreover, these bankers thoroughly examine your company’s finances to provide you with a better understanding of them and to help your small business succeed. M&T is our choice as the best bank for business analysis because of its relationship managers.

With various bank accounts, M&T Bank touts itself as one of the top 10 SBA lenders. Therefore, five different checking alternatives could work for most small businesses besides specialized funds for the healthcare and professional services sectors.

The most considerable drawback is that most accounts require you to keep a large balance to avoid fees. You must keep a $2,500 average balance in your basic Simple Checking for a Business account to avoid paying the $10 monthly fee.

Pros:

• Relationship managers assess your needs as a small business.
• Five options for checking accounts to suit the needs of most businesses

Cons:

• Only offered in 11 states along the East Coast.
• To avoid a $10 monthly fee for the Simple Checking for Business account, keep an average balance of $2,500.

US bank

Despite not being as massive as some of its rivals, US Bank has a vast network of branches and ATMs around the country. The Silver Business account provides checking without a monthly maintenance cost and is the most notable option for small enterprises. Therefore, this account is ideal for small companies with fewer than 125 monthly transactions (different products cost $0.50 each). You are not charged a fee to deposit up to 25 mobile checks every month.

And for additional mobile deposits, pay the same $0.50.

But remember that other checking accounts have a higher number of fee transactions and require a sizable average balance to avoid monthly service fees of up to $25 per account.

Like others on this list, US Bank offers additional services through a bundle, including credit card processing, payroll servicing, and invoicing. Therefore, it makes it an excellent choice for small businesses.

Pros:

• For the Silver Business account, there is no monthly maintenance fee.
• There are packages available for invoicing, payroll processing, and credit card processing.

Cons:

• To avoid costs, other checking accounts have high average balance requirements.

Bank of America business

Traditional banks like Bank of America can help your company as it expands. It offers two separate business checking accounts with monthly fees readily waived and that you can switch between as your company’s needs vary. Consider your business needs and contrast the two organizations to decide which is ideal as its products are comparable to Chase’s.

Up to $7,500 in monthly cash deposits are free with Bank of America before fees apply. The higher-tier Business Advantage Relationship Banking offers free cash deposits of up to $20,000 per month if you upgrade. For every $100 you go over either barrier, the bank charges $0.30.

Continuous rewards are another area in which Bank of America excels. The company’s business credit cards also offer cash rewards and travel, with the opportunity to earn $500 with qualifying actions. With the company’s preferred rewards for business, you can enjoy 25% to 75% credit card rewards, and a business benefit savings account interest rate of 5% to 20% higher.

Additionally, expanding firms can benefit from Bank of America’s exceptional business savings, certificates of deposit (CDs), lending products, and financial analysis through Merrill financial adviser. Bank of America offers everything your company requires as it evolves.

Pros:

• If the requirements are completed, it will give a bonus of up to $500 and endless benefits.
• Two hundred free transactions per month with basic business checking.
• Free online resources to monitor business performance

Cons:

• Opening deposit of $100 is necessary
• Fees from unauthorized ATMs are not repaid.
• No 24-hour client service

Novo

Novo is an excellent option if your company only needs a business checking account and wants a digital-only bank, even if it doesn’t offer the full-service business banking products that many other options on this list do.

When the month is over, Novo reimburses all ATM fees, which is fantastic if your company frequently uses ATMs to make cash withdrawals. Therefore, this bank specializes in digital integrations with unrestricted invoicing and superior accounting and payment software connectors. Furthermore, Novo offers up to five reserve accounts. The Novo app allows you to transmit paper checks, but you cannot order checks using it.

Cash deposits are free, but money orders must be bought and deposited using the app. Moreover, it can purchase money orders up to $1,000 from United States Postal Service (USPS) outlets for as little as $1.95 per.

Pros:

• At the end of each month, refund all ATM fees.
• No monthly fees
• Unlimited free transactions

Cons:

• No accounts that earn interest
• Lacking any lending or saving items
• No deposits in cash

Mercury

Mercury is designed for established startups and technology firms. The company offers free checking and savings accounts with no minimum balance or deposit requirements. Moreover, customers can now request Mercury Treasury, an interest-bearing account, once they have at least $250,000 in Mercury accounts. It currently has an APY of up to 1.394%, but the bank anticipates it will rise when the prime rate does.

Mercury has excellent software integrations, and its benefits page lets you promote special offers for your company on the Mercury website. Therefore, most US-incorporated firms are qualified for accounts except for sole proprietorships and trusts.

The bank also provides venture loans and capital products. It does not, however, give any other varieties of loans. However, it’s a fantastic option for a digital-only bank with excellent software integrations and a few distinctive lending and interest-earning account offerings.

Pros:

• No recurring monthly fees
• Free domestic wire transfers
• On balances over $250,000, a Treasury instrument delivers an exceptional yield.

Cons:

• Inaccessible accounts for sole proprietorships
• cannot write checks on paper
• few available financing choices, no cash deposits.

Silicon valley bank

It is a fantastic option for startups searching for the best digital bank with the resources to support their enterprises. SVB provides resources and direction for startups in addition to banking goods and services. These include networking events, hiring workshops, tools and recommendations for financing, and chances to connect with founders and investors. It also offers discounts for over 50 other software programs and services, like Zendesk, Salesforce, and Amazon Web Services (AWS).

Due to its few branches in 16 states (Arizona, California, Colorado, Florida, Georgia, Illinois, Massachusetts, Minnesota, New York, North Carolina, Oregon, Pennsylvania, Texas, Utah, Virginia, and Washington), it is an excellent option for businesses that mostly use online banking.

The cost of SVB is one drawback. Although the SVB Edge basic account is initially free, it increases to a highly expensive $50 per month after three years. The more expensive plan, SVB ScaleUp, comes with $500 in monthly credits that It can use to offset service charges. In three years, if your company can expand into that account, SVB will benefit you.

Additionally, it provides business credit cards and a few lending options, such as working capital, growth, and venture debt. While It will better serve more established companies looking for a full-service digital bank with First Internet Bank or Grasshopper, startups may find SVB’s tools beneficial.

Pros:

• integrates with other accounting software such as QuickBooks
• Flexible loan alternatives for firms with venture capital funding
• global solutions for digital banking

Cons:

• Absence of interest-bearing checks
• After the first three years, monthly rates jump to an extremely expensive $50 per month,
• Branch access is only available in 16 states and a few other countries.

Axos bank

We recommend Axos Bank as a digital bank that provides full-service banking alternatives to meet your company’s needs. There are no monthly fees, minimum initial balance requirements, or minimum deposits for its Basic Business Checking account. Additionally, Axos Bank provides Business Interest Checking, an interest-bearing account with a maximum annual percentage yield (APY) of 1.01% for balances under $50,000 and 0.20% APY from $50,000 to slightly below $250,000.

A welcome bonus is one of the first benefits you can receive from Axos Bank. Those who formed their LLC after June 1st, 2020, are eligible to get a $200 incentive (use promo code NEWBIZ200). Therefore, even if your company is ineligible for the new business bonus, you can still sign up for the service with a $100 bonus (promo code NEWAXOSBIZ).

One of the best benefits of Axos Bank is that it pays all domestic ATM costs. You can deposit up to 60 goods monthly using its Remote Deposit Anywhere capability. Hence the MoneyPass or Allpoint ATM networks are available for cash deposits at Axos Bank, in contrast to some of its competitors, who exclusively accept digital payments.

Additionally, it provides SBA financing, money market accounts, CDs, business savings, mobile banking, and online banking. Using a workplace banking option, you can also provide your staff with no-fee reports. It’s a fantastic choice for companies searching for a full-service, digital-only bank.

Pros:

• Basic business checking has no monthly costs.
• Unlimited refund of ATM fees at domestic ATMs
• Available are checking and savings accounts that pay interest.

Cons:

• fees for wire transfers outbound after the first two are free
• fees for interest-bearing checking
• When compared to competitors, they have a low APY on savings.

Bluevine

Despite not offering as many banking products as some of its rivals on this list, Bluevine provides an excellent business checking product and some of the most significant business line of credit options. Moreover, it is a digital-only bank that offers high-yield checking accounts with interest. With Bluevine business checking, you can earn 1.5% APY if you spend $500 or get paid $2,500 monthly in customer payments via the debit card. Additionally, two free checkbook orders are given each year.

It has no minimum initial deposit, balance requirements, or monthly or transaction fees. Additionally, Bluevine offers excellent software integrations. You can only deposit cash at a Green Dot retail location for a fee of $4.95 per transaction. In addition to third-party payments, Bluevine also levies a $2.50 fee for ATM withdrawals made outside of its network.

Pros:

• Checking with a 1.5% APY on amounts of $100,000 or less
• Earns interest is an excellent line of credit option.
• incorporates QuickBooks

Cons:

• No savings, money market, or certificate of deposit
• There are no physical branches.
• No weekend customer service

How do you open a bank account for your business?

Once you’ve located a bank that can meet your small business’s demands, you should quickly submit an account application. Thankfully, doing so can often be a simple and quick process. Most financial institutions require personal information like your social security number, mailing address, and a copy of your passport or driver’s license. However, the specifics differ from bank to bank.

Moreover, the name and address of your firm, an employer identification number (EIN), and any other supporting evidence that demonstrates your ownership of the company will also be requested by banks. Some organizations demand deposits from applicants to open business bank accounts, while others let you start an account without one. The good news is that you don’t need to make a sizable starting deposit. Although banks like accounts with more significant balances and often reward them, many will let you start an account with less than $100. Even as a benefit, some banks provide a sign-up bonus.

Therefore, remember that there may be significant differences between your first deposit and your average daily or monthly balances. An introductory bonus may determine choosing between two banks with comparable programs. Still, it’s crucial to focus on which business checking account will work best for your organization in the long run. It can open a business checking account online fast, but it might take a few business days for your application to be accepted.

How to pick a bank account for your business?

Since no two firms are alike, most small businesses have minor distinctions that make them unique. However, if this is your first time creating a bank account for a small business, you might not know where to start.

In the end, it’s critical to comprehend your banking requirements before opening an account. While some small business owners may prefer excellent customer service or financial advice, others may place more value on local expertise or online convenience. Here are a few things to consider while selecting the ideal small business bank account to assist you.

• Cost
• Monthly transactions
• Account balance on average
• Location
• Tools of the bank
• How big the bank is
• Convenience

Cost

Contrary to what many think, a supposedly free business checking account isn’t necessarily accessible. Some banks offer checking accounts with no monthly fees, even though corporate banking accounts typically have higher costs than personal ones. However, to avoid paying a fee, account holders frequently need to maintain a minimum daily or monthly balance or can only make a certain amount of transactions. Therefore, accessible and inexpensive accounts are available; you simply need to study the small print and make a sensible choice.

Monthly transactions

Business bank accounts typically have a limited amount of monthly transactions, unlike your checking account, where you can frequently withdraw money whenever you want. Understanding where your small business fits on the spectrum and the costs if you exceed the limit is helpful because this could range from 50 to 300. Hence, you might limit the number of transactions you can complete while maintaining your eligibility for a free account. Therefore, you should consider how your business runs monthly before applying for an account. You should consider these factors because transactions frequently involve deposits, withdrawals, transfers, and electronic payments.

Account balance on average

Many banks provide better rates for small businesses that maintain balances above a specific level on a daily or monthly average. Plan your budget based on what you anticipate your average balance to be.

Location

You might never need to step inside a bank branch if most of your small business’s transactions are conducted online, and you prefer to keep tabs on and manage your finances using a website or an app. However, you should utilize a bank account with a physical branch in your neighborhood if you deal with a lot of money, like face-to-face communication, or want to establish a relationship with a financial expert familiar with your area or local economy. Therefore, the good news is that many bigger banks provide physical and digital help, enabling you to benefit from the best of both worlds.

Tools of the bank

If you work with a bank that lets you connect the data from your program, you might wish to do so if you use QuickBooks, payroll software, or another accounting tool. If withdrawals immediately appear in QuickBooks, it will be much easier to balance your books. Moreover, having those transactions appear in your bank account might be helpful if you use PayPal or Square.

How big the bank is?

Large or small? In the end, it comes down to personal taste. It can be advantageous to have a close connection with someone who works for a local bank (or a local branch of a national bank). That person could be able to change the fees or allow you more leeway when applying for a small business loan. Smaller banks may require you to open an account in person, provide fewer digital tools, and provide information that isn’t always crystal clear online. Therefore, more significant national banks, in contrast, are more likely to provide clear online explanations of the fine print, let you open an account digitally, and launch digital products first, all of which can bring ease and efficiency.

Convenience

There is nothing wrong with keeping two accounts at the same bank if you currently use one for your personal affairs, and it offers a business checking account choice that suits your needs. Moreover, having information from various accounts accessible in one place or application is an excellent plus.

Conclusion

You can get the banking services you need from banks on our list to help your company expand and succeed. Each bank offers slightly different features and product offerings. While some banks only operate online, others have physical offices. While some provide a comprehensive range of business support items, some give interest yield on straightforward checking accounts. Therefore, choose the bank that offers the products and services your expanding company needs. Decide what you need from them.

Every year, millions of new firms start up, playing a big part in the economy. With all the duties of running a business, selecting a business account that meets the firm’s demands can help make managing its money easier. The majority of the owners of these small enterprises work accounting for the company themselves.