What is a Business Checking Account?

A business checking account is a bank account tailored for handling the financial operations of companies, offering features like higher transaction limits and multi-user access. Choosing the best business checking account is crucial as it helps manage cash flows, pay bills, and keep business finances separate from personal funds. These accounts are foundational for maintaining orderly finances and facilitating efficient business transactions.

What to Consider When Choosing a Business Checking Account

Before you sign up for a business checking account, it’s important to think carefully about what financial services your business needs. Business checking accounts differ widely, particularly when it comes to transaction limits, fees, interest, and balance requirements.

1. Transaction Limits

Many banks place limits on both deposits and withdrawals to your business checking account. For example, you may only be allowed to deposit a certain amount of cash into your account each month for free. If you exceed this cash deposit limit, you could face hefty fees that eat into your business’s revenue.

Just as frequently, banks place limits on the number of transactions your business can make for free. For example, you may only be allowed to make a certain number of check payments, electronic transfers, debit card payments, or cash withdrawals each month. If you exceed that, expect to pay more fees.

2. Fees

Fees are one of the most important things to look at when choosing a business checking account. Banks often advertise business checking accounts as “free,” but in reality the account is only free under certain - often very restrictive - conditions.

• Monthly Account Fees

To start, check whether a bank will charge a monthly account fee. This is a fee that you’ll pay every month, no matter how often you make transactions from your account. Small monthly fees may be worthwhile if the bank eliminates other fees, but in general it’s a good idea to stick with business checking accounts that come with $0 monthly charges.

You also need to watch out for “maintenance” fees. These are often listed separately from the primary monthly fee, and they can be as high as $50 per month at some banks. If a bank you like offers an account with a maintenance fee, ask them to waive it. If they won’t, you should reconsider whether that business checking account is worth it.

• Transaction Fees

For banks that offer “free” business checking accounts, transaction fees are the most common way to make money off of your business. Typically, business checking accounts come with anywhere between 200 and 500 transactions per month. While that sounds like a lot - and it may be for some businesses - it’s easy to run over that limit towards the end of the month if your business is processing dozens of transactions per day.

Transaction fees are often a flat fee per payment over your limit. So, for example, you might be charged $0.50 for every excess debit card transaction. That’s not much if you’re placing a supply order worth thousands of dollars, but it can be as much as a 25% surcharge if you’re using your business debit card to buy a $2 cup of coffee.

3. Interest

Another important factor that differs between banks is whether they offer interest on cash inside your business checking account. With interest rates low for the foreseeable future, this might not be a huge deal. 

Still, if you have a $100,000 balance in your business checking account, earning interest at even a modest 0.1% APY adds up to an extra $100 per year. Although that’s not much, it’s enough to throw a small office party for your employees.

So, be sure to check whether a bank offers interest payments to business account holders and how the interest rates compare to competitors.

4. Balance Requirements

Many banks require that you keep a minimum balance inside your business checking account. If you fall below this minimum balance, you could be subject to more fees.

On the other hand, some banks reward you rather than punish you for keeping a higher balance with them. For example, if you have more than a threshold amount of cash in your business checking account, you may qualify for higher transaction limits or higher interest rates.

This reward structure can make some business checking accounts that initially seem too expensive much more appealing.

5. Physical vs. Digital Banking

Another thing to consider when choosing a bank for your business checking account is whether it has a physical footprint or whether it’s an online-only institution. Digital banks can often offer better account terms and higher interest rates since they have less overhead than traditional banks.

On the other hand, if you need access to physical infrastructure like ATMs or want the ability to talk to someone at your bank in person, then a physical bank might be better for your business.

Whichever option you prefer, take a look to see what other services your bank offers. If your business needs a loan down the road, the bank that runs your business checking account is a good place to start. Plus, banks frequently offer better terms to existing customers. 

If you choose a small local bank or an online-only checking account, just keep in mind that you might have less financial flexibility in the future. 

Which account is right for you?

Bank	Monthly Fees	Earns Interest	Explore
	None	Yes	Visit Site
	None	Yes	Found Visit Site
	None	No	Mercury Visit Site

Explore Online Business Checking Accounts

1. Relay

Relay is an online banking platform for small businesses, accountants, and bookkeepers to automate their bill pay and manage their cash flow and operating expenses. It charges no fees and makes it easy to send and receive ACH transfers, checks, or wires. You can sync transaction data directly in QuickBooks or Xero, and set up role-based permissions so there’s no need to share login information between staff.

Relay Visit Site

2. Mercury

Mercury is a banking* services platform that offers high-tech business checking and savings accounts for startups and growing companies. Mercury charges zero account fees and doesn’t require a minimum deposit. You can request physical debit cards or create your own virtual cards for employees. Mercury also offers an API so you can integrate your bank account with the rest of your business software.

Mercury Visit Site

3. Found

Launched in 2019, Found allows freelancers and the self-employed to carry out their business banking, keep track of their bookkeeping, and manage their expenses through a single platform. As well as providing you with a Mastercard debit card for business spending, the company offers tax and invoicing tools, such as automatic invoice generation and the ability to pay taxes via the app. 

Found Visit Site

Disclaimers

Lili:

¹ Lili is a financial technology company, not a bank. Banking services provided by Sunrise Banks N.A., Member FDIC.

² The Lili Visa® Debit Card is issued by Sunrise Banks N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc.

³ The Annual Percentage Yield (“APY”) for the Lili Savings Account is variable and may change at any time. The disclosed APY is effective as of September 1st, 2023. Must have at least $0.01 in savings to earn interest. The APY applies to balances of up to and including $100,000. Any balance over $100,000 will not earn interest or have a yield. Available to Lili Pro, Lili Smart, and Lili Premium account holders only.

Bluevine:

¹ No limit on numbers of transactions, However, all accounts are subject to the aggregated monthly deposit and withdrawal amount limits of the Account Agreement.

Axos:

*Open a business checking account by Jan. 31 and get up to $400 when you use promo code NEW400 on your application and maintain a minimum average daily balance of $50,000.

Bank of America:

The offer is for new eligible business checking customers only. Offer expires 12/31/2024. To qualify, open a Bank of America Business Advantage checking account through the promotional page and make New Money deposits totaling $5000 or more into that new account within 30 days of opening, and maintain an average balance of $5000 or more for 60 days during the Maintenance Period. Bank of America will attempt to pay bonus within 60 days. Additional terms and conditions apply. See offer page for more details.

U.S Bank:

Earn up to $800 bonus when you open a new, eligible U.S. Bank business checking account online with promo code Q2AFL24 and complete qualifying activities1, subject to certain terms and limitations. Offer valid through August 30, 2024. Member FDIC. Complete these steps to earn the offer:
Earn your $400: Complete $5,000 in new money deposits within 30 days of account opening and maintain for 60 days after account opening.
Earn your $800: Complete $25,000 in new money deposits within 30 days of account opening and maintain for 60 days after account opening.

U.S Bank Business MMA:

Receive a bonus interest rate of 4.25% from the account opening date when you open a new Platinum Business Money Market Acccount and complete qualifying activities, subject to certain terms and limitations. Offer valid through July 10, 2024. Member FDIC.
Complete these steps to earn the offer:
- Open a new Platinum Business Money Market Account
- Deposit $25,000 - $2,999,999.99 in new money deposits
For Platinum Business Money Market accounts with $3 million or greater in balances, the bonus interest rate does not apply, and the full account balance will earn the standard variable interest rate in effect at that time.

Mercury:

*Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust, Members FDIC.

¹ Up to $5 million in FDIC insurance through their partner banks/sweep networks.
² Free wire transfers in USD. Mercury is a fintech company, not an FDIC-insured bank.
³ Mercury Treasury is not insured by the FDIC. Mercury Treasury are not deposits or other obligations of Choice Financial Group or Evolve Bank & Trust, and are not guaranteed by Choice Financial Group or Evolve Bank & Trust. Mercury Treasury products are subject to investment risks, including possible loss of the principal invested. See mercury.com/treasury for additional disclosures.
⁴ Deposits in checking and savings accounts are held by our banking services partners, Choice Financial Group and Evolve Bank & Trust ®; Members FDIC. Deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through insurance to apply.