The best banks for small businesses offer specialized accounts, competitive interest rates and a suite of tools for growing companies.
We’ve compared 60 financial institutions to pinpoint the best options for small business owners. Our top five picks are based on factors such as fees, interest rates, available services, digital capabilities and reputation. Whether you need a checking, savings, money market or certificate of deposit account, these top banks provide quality options. Annual percentage yields (APYs) and account details are accurate as of January 31, 2024.
Best Banks for Small Business
Summary: Best Banks for Small Business
What To Look For in a Small Business Bank Account
The best bank account for your small business depends on your specific needs and business type, but here are key benefits to look for when choosing a business account:
- Low or no fees. Look for low or no monthly fees and assess per-transaction charges to ensure they won’t eat into profits. Pay attention to minimum balance requirements and avoid accounts that will penalize you if your total funds dip below a certain threshold.
- High transaction limits. Opt for a checking or savings account with generous limits on monthly transactions so you’re not charged excessively for normal business operations.
- Competitive interest rates. Interest is important in a bank account, especially if you plan to keep a high balance. Look for accounts with competitive APYs on any balance.
- Good customer service and reviews. What are the hours for customer support? How easy is it to get help? How does a banking mobile app score with customers?
- Helpful technology and features. Look for user-friendly digital tools and business banking features to simplify your life, like accounting integration or invoicing software.
- Extra perks. Some of the best banks for a small business offer ongoing perks such as ATM fee rebates and discounts on business tools to help you save on daily expenses.
How To Open a Small Business Bank Account
You’ll generally follow these steps when opening a business bank account.
First, research the best banks for small businesses and compare several options. Choose one that fits your needs, and pay close attention to fees and interest rates to get the most value.
Once you’ve selected a bank, gather your identification and business documents. Have your Social Security number and Employer Identification Number (EIN) ready, as well as certified business documents such as your articles of incorporation, business license or partnership agreement. You may also need to provide your personal ID, like a driver’s license.
With documents in hand, fill out the application online or at a branch. The bank will ask for details about your company, such as your legal business structure, nature of business and operating locations. When you’re done answering these questions, be ready to make a deposit.
Do I Need a Small Business Bank Account?
As a small business owner, you likely need a business bank account. While mixing personal and business finances may seem efficient, it isn’t recommended. Combining the two can make tracking expenses and income difficult as your business grows.
A business account separates your finances into clear categories. This makes tax filing and reporting simpler, and it protects you in the event of an audit. You’ll have separate records for all money related to your business to justify your deductions. The IRS defines incorporated businesses, including LLCs and corporations, as separate legal entities for tax purposes but suggests that all business types separate business and personal expenses.
Business bank accounts also offer credibility and convenience. They allow you to accept payments, issue invoices and pay vendors professionally. The best business accounts also offer tools specifically for companies, like remote check deposits, expense tracking and payment options. This makes managing operations easier than with a personal account.
Find The Best Business Bank Accounts Of 2024
Small Business Checking vs. Small Business Savings Accounts
A small business checking account account serves as a main operational account. It’s designed for day-to-day business transactions such as paying vendors, collecting revenue and transferring money. This is the most basic bank account you can have for money you’re going to use and add to often.
In contrast, a small business savings account stores funds you don’t need immediately. It generally provides higher interest rates than checking but may have monthly withdrawal limits. It’s a low-risk place to hold emergency reserves and collect interest on cash you don’t need right now.
Many businesses have at least one of each type of account. Choose business checking for regular deposits, transfers, withdrawals and everyday purchases and business savings for extra funds you won’t need to access regularly.