These Are the 5 Best Bank Accounts for Your Small Business (May 2024)

Final Verdict

Chase Bank is our top pick for small business banking. It offers many positive features, including a signing bonus, easy cash deposits, cash-back reward cards, and access to a global banking network. If the minimum balance is too high for you, we recommend Axos Bank Basic Business Checking or U.S. Bank Silver Business Checking for checking accounts with no minimum balance requirement.

Compare the Best Small Business Bank Accounts

Pros and Cons of Small Business Bank Accounts

Pros

• Business-oriented features: Small business accounts offer services that personal accounts do not, such as allowing employees to handle daily business transactions and merchant services with business debit cards. Certain accounts may also include small-business benefits like free business checks, new account bonuses, and access to lines of credit and business credit cards.
• Separates business and personal expenses: If you own a small business, having a separate account for your personal and business funds can be helpful. It can also simplify tax time.
• FDIC-insured: At participating banks, the FDIC insures $250,000 of your business bank deposits in the event of bank failure.

Cons

• Fees may apply: As with personal bank accounts, fees that typically range from $12 to $30 per month may apply in a variety of situations, including transaction fees. Depending on the bank, monthly fees may be waived if you meet specific requirements, like minimum balance requirements.
• More paperwork than personal accounts: To set up a bank account, you may need to provide your business license, Employer Identification Number (EIN), and any formation documents and ownership agreements.
• Many don’t earn interest: It’s unusual to find a small business checking account accumulating interest, even among the best small business accounts.

How to Choose a Business Bank Account

Compare business bank accounts based on these features to find an account that fits your financial situation.

• Minimum required balance: Some banks have no minimum required balance, while others may require $25 or $100, for example. In some cases you'll find a minimum opening deposit, but no minimum required ongoing balance.
• Monthly fees: Bank accounts often come with monthly service fees but they usually provide ways to waive them, such as by maintaining a certain account balance or having a certain amount of deposits per month.
• Other fees: Check the other fees associated with the account, such as ATM fees, electronic transfer fees, check fees, and paper statement fees.
• Relationship management tools: A trusted business banking relationship manager to handle your accounts and make recommendations can be invaluable.
• Online and mobile tools: Having quick and easy access to your accounts—with an intuitive, modern interface—can help you keep an eye on your business and move fast when necessary.
• Business software integration: Easily connecting your business software to your bank accounts can simplify daily operations and tax season.
• Access to credit: Access to credit is vital for many businesses. A 2023 McKinsey study found that 39% of small and medium-sized businesses that were likely to switch banks cited easier access to credit as a primary reason.
• ATM network: Pay attention to the ATM network used by the bank, and ensure you'll have access to in-network ATMs if necessary.
• State availability: Many online bank accounts are available nationwide, but it's worth checking.
• Branch availability: Although many excellent bank accounts can be found online, in-person banking may be a priority to some.
• APY: Most business checking accounts don't offer much or any interest, although business interest checking accounts do exist. But if earning interest is important to you, see the best high-yield business savings accounts to see the highest available rates.
  

Types of Business Bank Accounts

• Business checking accounts: Business checking accounts function similarly to personal checking accounts.
• Business savings accounts: Business savings accounts function similarly to personal savings accounts. Like any savings account, it pays to look for a high APY while considering the bank's other features.
• Business CDs: Like personal CDs, business CDs allow you to earn a fixed rate on a balance for a predetermined period of time, and there are typically early withdrawal penalties.
• Business money market accounts: Business money market accounts provide interest on the balance like a savings account, but comes with some features of a checking account, like check-writing ability.
• Merchant accounts: A merchant account allows a business to accept and process electronic card transactions.
• Cash management accounts (CMAs): A cash management account combines the features of checking, savings, and investment accounts.
• Commercial accounts: Commercial accounts are any kind of account used by a corporation or other business; they're usually checking or other demand deposit accounts.
  

How to Apply for a Business Bank Account

Once you're ready to make a decision, you can follow these steps to open a business bank account.

1. Investigate your account of choice in detail: Take the time to understand the fees and policies of the account, like deposit and withdrawal limits.
   
2. Gather business documents: You'll need to verify personal information, and business information that may include your business name and EIN, other registered DBA names, licenses, registration, and ownership agreements. LLCs may need articles of organization, operating agreements, etc.
   
3. Apply for the account: You may be able to apply online, over the phone, or in person.
4. Fund the account: Depending on the account type, you may need to make a specific minimum opening deposit (such as for a savings account) as part of the terms, or to earn the best rate.
5. Close old account, if necessary: If you have a former account you no longer need, transfer out the funds and consider closing it to avoid mistaken charges and potential fraud.

Alternatives/Additions to Small Business Bank Accounts

Credit Unions

Federal credit unions and local credit unions might be a decent alternative to traditional banks for small business owners. Membership is required at credit unions, though it’s often relatively easy to become a member. A credit union’s small business accounts may offer lower fees on deposit accounts and pay higher interest, compared to a traditional bank, while also offering $250,000 in NCUA insurance.  

Business Payment Apps

Business payment apps and devices like Stripe, Square, Quickbooks Online Mobile, and Google Pay for Business process business transactions securely. However, many apps must still integrate with your current bank or work with underlying banks to provide FDIC protection. 

Online Lenders

Around one-third of small businesses use fintechs and online lenders for borrowing. Online lenders may offer working capital loans and merchant cash advances. However, some businesses have reported frustration with understanding loan terms, as business lenders aren’t required to disclose loan terms in the same way as personal loan lenders. 

How We Picked the Best Business Bank Accounts

Research for this article encompassed business bank accounts from across the U.S. We evaluated the benefits offered, transaction limits, fees charged, and customer service of each business bank account reviewed to determine the "best of" designation for each category.

Why You Should Trust Us

Investopedia collected key data points from several companies to identify the most important factors for readers choosing a small business bank account. We used this data to review each company for minimum required balance, APY, fees, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999, and has been helping readers find the best small business bank accounts since 2020.

Guide to Business Bank Accounts

• What is business banking?: Business banking is a company's financial dealings with an institution that provides business loans, credit, savings accounts, and checking accounts, specifically designed for companies rather than for individuals.
• What is a merchant account?: A merchant account is a type of business bank account that allows a business to accept and process electronic payment card transactions. A merchant account requires a partnership with a merchant acquiring bank.
• How to open a business bank account: Learn the steps to take to open a business bank account, from comparison shopping to opening deposits.
• How to get business credit: Learn how to establish and build business credit, and how it differs from personal credit.
• How to finance a business: Learn about debt financing, equity financing, mezzanine capital, and more.
• Does the FDIC cover business bank accounts?: The FDIC does cover business bank accounts, but there are eligibility requirements and limitations.
• Retail banking vs. corporate banking: Retail banking refers to bank services that deal directly with consumers, while corporate banking serves business and corporate customers.
• Best Free Business Bank Accounts