Managing your finances can be daunting as a small business owner. One of the first steps is to open a small business checking account. In this article, we’ll explore what a small business checking account is, why you need one, and how to choose the best one for your business.
What is a Small Business Checking Account?
A small business checking account is a bank account specifically designed for small businesses. It allows businesses to deposit and withdraw funds, make payments, and manage their finances. Small business checking accounts have various features, such as online banking, mobile banking, and overdraft protection.
Why Do You Need a Small Business Checking Account?
Opening a small business checking account is essential for several reasons. Firstly, it helps you separate your personal and business finances, making it easier to manage your money and track your expenses. Secondly, it allows you to establish a business credit history, which can be beneficial when applying for a business loan or credit card. Lastly, it provides professionalism that can make your business appear more credible and legitimate to clients and customers.
How to Choose the Best Small Business Checking Account
Choosing the best small business checking account for your business can be challenging. Here are some factors to consider when making your decision:
Fees
Many banks charge fees for their small business checking accounts, such as monthly maintenance, transaction, and ATM fees. Ensure you understand all the fees associated with the account before opening it.
Minimum Balance Requirements
Some small business checking accounts require you to maintain a minimum balance to avoid fees or earn interest. Make sure you can meet these requirements before opening the account.
Online and Mobile Banking
Most banks offer online and mobile banking for their small business checking accounts. Make sure you choose an account with these features, as they can make managing your finances much more convenient.
Customer Service
Consider the quality of customer service when choosing a small business checking account. You’ll want a responsive and helpful bank when you have questions or concerns.
Interest Rates
Some small business checking accounts offer interest on your balance. If you plan to keep a large balance in your account, consider choosing an account that offers a competitive interest rate.
Best Small Business Checking Accounts
There are many options when it comes to small business checking accounts. Here are some of the best accounts available:
Chase Business Complete Checking
Chase Business Complete Checking is a popular option for small businesses. It offers no monthly service fee when you maintain a minimum daily balance of $2,000 or more and unlimited electronic deposits, ACH, and Chase QuickDeposit.
Bank of America Business Advantage Checking
Bank of America Business Advantage Checking offers a variety of benefits, such as no monthly maintenance fee when you maintain a minimum daily balance of $5,000, mobile banking, and overdraft protection.
Wells Fargo Business Choice Checking
Wells Fargo Business Choice Checking offers a low monthly service fee of $14, which can be waived with a $7,500 average balance. It also offers online banking, mobile banking, and a business debit card.
Azlo Business Checking
Azlo Business Checking is an online-only account that offers no monthly fees, minimum balance requirements, or ATM fees. It also offers online banking, mobile banking, and mobile check deposit.
Frequently Asked Questions
1. Can I use my checking account for my business?
While you can technically use your personal checking account for your business, it is not recommended. It can make it difficult to track your business expenses and income, and it can make it challenging to apply for business credit.
2. What documents do I need to open a small business checking account?
The documents required to open a small business checking account vary by bank, but you will typically need to provide identification, such as a driver’s license or passport, and proof of business ownership, such as a business license or articles of incorporation.
3. Can I switch my small business checking account to a different bank?
Yes, you can switch your small business checking account to a different bank. However, you should make sure you understand any fees or requirements associated with closing your account and opening a new one.
4. What is overdraft protection?
Overdraft protection is a feature that allows you to avoid overdraft fees by automatically transferring funds from another account, such as a savings account, to cover any overdrafts.
5. Can I apply for a business loan with a small business checking account?
Having a small business checking account can help you establish a business credit history, which can make it easier to apply for a business loan or credit card.
6. Do I need to have good credit to open a small business checking account?
While having good credit can be beneficial when opening a small business checking account, it is not always necessary. Some banks offer accounts specifically designed for businesses with poor credit.
Conclusion
Opening a small business checking account is an essential step in managing your business finances. It allows you to separate your personal and business finances, establish a business credit history, and appear more professional to clients and customers. When choosing a small business checking account, consider factors such as fees, minimum balance requirements, online and mobile banking, customer service, and interest rates. There are many excellent options available, such as Chase Business Complete Checking, Bank of America Business Advantage Checking, Wells Fargo Business Choice Checking, and Azlo Business Checking.
