Online banking enables you to manage your account and perform banking functions from any device via the internet instead of having to go into a branch or make a phone call. This includes making transfers, paying bills, viewing balances, and checking transactions. In addition, you get 24/7 access to your accounts and the ability to manage your accounts on the go.
While several institutions offer online banking via an app or online platform, there are specific online-only banks that often have superior rates and cheaper fees than traditional banks due to lower overhead costs.
A business checking account is a deposit account that lets you deposit and withdraw money, write checks, make transfers, pay bills, and more. It functions much like a traditional checking account except for your business finances instead of personal.
You open it in your company name, and it may have additional features that a personal checking account won’t, such as tax planning or integrated credit card processing.
While you can get a business bank account for an LLC (limited liability company), you don’t have to be an LLC to open one. Sole proprietors, partnerships, and other types of businesses can also open a business checking account.
In short, it depends. If your business is a sole proprietorship or a partnership, you aren’t legally required to have a business checking account. You’re free to use a personal checking account, but should still make an effort to separate personal and business finances.
However, if you operate as a corporation, you’ll need to have a dedicated business checking account for liability purposes and show a clear separation between what’s yours versus your business’s.
Also, some providers/banks may not allow you to use personal accounts for business purposes. So read through the terms and conditions of your personal account before using it for your company.
Whether you’re legally required to have one or not, there are several benefits of having a business checking account. One of the biggest benefits is keeping business finances separate from your personal finances.
Trying to track what’s for business versus what’s a personal transaction can be a headache if you use a personal account for business purposes. Having a dedicated account for your company makes it easy to keep track of things like your income and expenses, which is especially beneficial come tax time and saves a lot of work.
Another benefit is that it can serve as a foundation to build your business credit. Some lenders require that you have a business bank account to secure a loan or take out a business credit card. Good business credit can help you qualify for better lending and terms in the future as your company scales.
The best business bank accounts also have extra features that are helpful to all companies. This includes things like the ability to scan receipts, tools to categorize spending, and integration with accounting software.
Using a business account rather than your personal account looks more professional to suppliers and clients, too. It helps to show that your company isn’t a hobby but a legitimate operation that you’re taking seriously.
Anyone who owns a business that is legally registered in the USA can generally open a business account. However, unless you’re a sole proprietor, you’ll need an Employer Identification Number (EIN). Sole proprietors can get an EIN but can opt to use their social security number instead.
Founded in 2016, Novo is a fintech company offering free checking accounts to small businesses in the United States. As well as allowing you to make and take payments via Automated Clearing House (ACH) transfers, the company includes full-service invoicing software on all its accounts. Although Novo isn’t a bank, it works with partner bank Middlesex Federal Savings. As such, deposits in your account will be protected up to $250,000 under the government’s FDIC scheme.
Relay is a business banking platform great for enterprises of all shapes and sizes. The company offers up to 20 checking accounts and 50 physical or virtual debit cards for your business. It has no monthly or overdraft fees or minimum balance requirements, and it integrates with many accounting and payroll tools your business may already use. While there are no physical branches, Relay lets you withdraw and deposit for free at over 55,000 AllPoint ATMs throughout the U.S. The company also has great reviews and an intuitive mobile app.
Bluevine is a financial services platform, not a bank, although it provides business checking accounts and other services through Coastal Community Bank. It's an ideal solution for digital-first businesses seeking access to paper checks without the need for numerous cash deposits. With additional features tailored for accountants, it's particularly well suited for small accounting and bookkeeping firms.
To open a business checking account, you’ll have to complete an application. It will request personal information like:
The application will also ask for business-related information, such as:
The exact requirements may vary from bank to bank, as well. Similarly, while you can open a business bank account online in some cases, certain banks may require you to go into a branch.
You’ll want to seek some key features when choosing the best small business bank account for your needs.
First, try to find free business checking accounts. Fees can eat away at your profits and add up over time if you’re not careful. They might include monthly fees, transaction fees, overdraft fees, deposit fees, ATM fees, and others.
Be aware that some banks may have certain requirements (like maintaining a certain monthly balance) to avoid fees. If finding a no-fee account is challenging, do your homework and choose one with the lowest fees possible.
You can also look for checking account features that aid in managing your business. Examples of this include the ability to:
Choose a business checking account that has a user-friendly app that lets you look at your transactions, view balances, and transfer funds with ease. Even if you mainly do your online banking on a computer or in-branch, being able to quickly check in on your business on the go in an app is valuable.
Ensure that both the app and online platform are highly rated, too. If other business owners have had poor experiences with them, there’s a good chance you’ll experience the same.