When you have a new business, it may be hard to find banks accepting new business accounts. After all, banks are looking for history - for proof that you've handled an account before and that you will not be a liability to them. If they cannot see a banking history attached to your name, they will be less inclined to offer you a business bank account.
That being said, this mostly applies to big banks and maybe the interest-bearing ones. There are still certain banks out there that allow small business owners to start up a new bank account.
You just need to know exactly what you are looking for in the account. Once you narrow down your needs and your possibilities, you may settle on one business checking account for your small business.
Note: if you want to open a new bank account easily for your business, try Bonsai's business account. Our account has no hidden fees or minimums and does not require a credit check to open (so it is virtually guaranteed). You'd also be able to instantly create "envelopes" or sub-accounts to save for taxes, retirement or vacations. Open an account today.
Fees to Watch Out For in a Bank Account
All business checking accounts will require fees to some extent. Some have costs associated to opening a new business bank account and some have no fees. This is why you need to read every contract or fine print carefully before you sign it, as there may be some hidden fees you need to know about.
Many banks accepting new business checking accounts will allow free cash withdrawals from the ATMs in your network. Even if you do withdraw cash from another ATM, the money will be withdrawn from another account.
However, other banks will either charge a fee or not reimburse the money. This is why, when you open a business checking account, you need to know how your ATM withdrawals will be charged - especially if you withdraw money on a frequent basis.
Excess Transaction Fees
Most business checking accounts will offer a certain number of free transactions - the number mainly depends on the business banking option that you go for. Fees are relatively small, from $0.10 to $0.50, but if you are planning to make multiple monthly transactions, you need to know your limit.
You may want to go for a business checking account that offers unlimited transactions to remove this potential problem. This way, you won't have to worry about paying an excess transaction fee when there is no limit, to begin with.
When you don't have enough money in your business checking account, most banks will simply deny your transactions on the grounds of insufficient funds. However, other banks will simply send you a negative balance and charge an overdraft fee.
In case you expect to make purchases more than what your account can cover, you'll want to know what the overdraft fee is. This way, you won't end up in bigger debt with the bank simply because of a checking account.
Monthly Service Fee
Some business bank accounts will charge a monthly service fee, especially if it is the kind of checking account that bears interest. Often, this fee is waived, as long as you meet a minimum balance requirement. This amount varies by bank, so you'll want to do your research. Some banks have no minimum business checking accounts available.
Processing Fee for Cash Deposits
Depending on the business checking account that you are going for, you may or may not be charged a fee for cash deposits. The bank itself will decide what the cash deposit fee will be per transaction, so you need to read the fine print for your business bank account.
Paper Statement Fees
Brick and mortar banks will typically charge a fee for sending you paper statements in your mail. The fee will depend on the financial institution that you are going for. To protect yourself from this fee, you may want to choose electronic statements for your business banking process.
Fees for Early Account Closing
If you get a business checking account and you decide to close it within the first few months, the bank may charge an early account closing fee. For this reason, you should do your research properly so that you choose a business bank account you'll end up using.
Even if you aren't certain, you should at least know what these fees are. This way, you will prevent any unpleasant surprises.
ACH or Wire Transfer Fees
Some banks may charge an ACH or wire transfer fees, although the amount may vary from one bank to the other. Make sure that you familiarize yourself with these fees before you get a business checking account.
Features to Consider in a New Business Checking Account
As a business person, you will have various needs for your small business. So, when you choose your business banking account, you must make sure that it caters to these needs - whether they are present or future needs.
When researching the features of a bank, you need to consider the growth potential of your business. Otherwise, if your business grows and your bank cannot handle your requirements, you'll be forced into opening accounts at multiple banks.
Instead of overcomplicating your future that way, you may want to choose a bank account that can accommodate growth. This way, even if you do have to upgrade your account, at least you will not have to look anywhere else.
When you use business checking accounts, you will definitely need a business debit card in order to make purchases and payments. Nowadays, it's much easier to make payments with a credit card than simply using cash.
Depending on the number of employees or partners that you have, you may want to go for a business that offers joint business checking accounts with multiple debit cards. You could even open a business account without your partner.
Business Credit Cards
Business credit cards are quite useful for new businesses, especially if you have a lot of payments to make and you don't get the same amount of income every day.
Credit cards can help you cover your expenses so that you are never late in your payments. These days, many vendors and suppliers accept credit card payments, so this may come to your advantage.
Depending on the small business checking accounts that you go for, you may get a lot of perks. Not only will this improve your business credit, but you can also get extras such as cashback or travel rewards.
While it's perfectly fine to get business credit cards from a different bank that you are using, it might be easier for you to keep your finances in the same place. Plus, if you are thorough with your payments, it will help improve your overall relationship with the bank.
If your business is still growing, then you may want to look for a bank that can also provide business loans whenever you need them. For instance, not every bank in the state offers California finance lender loans, so if that's your purpose, then you should be thorough with your research.
Many banks will offer you business loans, as long as you maintain a business savings account. This helps establish a relationship, and they will be more than likely to offer you their services. Therefore, before creating a new account, make sure that they have interest-bearing accounts as well.
The most convenient place for where to open a business bank account is online. If you want to save time through online bill pay, then you may want to go for online and mobile banking. There are various banks that offer Internet banking and mobile apps so that you may conduct your business from wherever you may be.
An online account will not only be useful for bill payments, but also for other transactions. For instance, you may use it to make online check deposits or check the balance of your business bank accounts when making a transaction.
For example, most of the transactions on Bonsai's business account are made online. This way, you will not have to make constant trips to the bank location, wasting precious time on transit and waiting in lines.
Some small business owners like the benefit of having a physical branch to go to. If that's important to you, a brick-and-mortar bank might be more convenient than an online business checking account.
Having a physical branch to go to gives you the option of easily making cash deposits. You should also look for the locations of their ATMs and make sure they are not too far from where you are doing business.
Other Factors to Keep In Mind
Aside from the banking platforms and standard features, there are other factors that you should keep in mind when opening a new business checking account. These can include:
Types of Accounts Provided
Once you open a business checking account, you may be interested in opening some savings accounts or even some joint accounts as well. Look at the overall types of accounts provided by the bank, in case you wish to open multiple business banking accounts.
Minimum Balance Requirements
Typically, the best business checking accounts will require a monthly balance, especially when it comes to new businesses. The problem is that not every business has that kind of capital, so you may want to look for a checking account with no minimum balance needed.
Bank accounts such as Bonsai's business account or the Chase business complete checking account don't require a minimum balance, but this is recommended if you want to reap certain benefits (such as waiving your monthly service fee). You might want to do some research on the fine prints for these advantages.
As a business owner, you can't afford to put your money at risk. Look for banks that offer Federal Deposit Insurance Corporation (FDIC) Insurance. You should be able to find on their platform information on whether they are FDIC members or not.
Where Can You Go for a New Business Account
There are plenty of banks out there that offer a business account to new business owners. Depending on your situation, like if you freelance or if you are opening a business bank account for an eCommerce store, you'd want to compare each institution to meet your needs. Let's dive into a few examples:
Bonsai's business account Checking Account
If you are a small business owner or freelancer looking for a business checking account, then you may want to consider giving Bonsai's business account a try. For the most part, this is a free business checking account, as it requires no monthly maintenance fee, no transaction fees, and there are no penalties for not meeting a minimum balance.
This online and mobile banking solution allows you to easily see the available balance in your checking account and offers both virtual and physical debit cards.
Bonsai has the "Envelopes" feature that may double as a savings account, and you may create as many envelopes as you like. Envelopes are like sub-accounts for your business account that you can create instantly. The app is for the most part automated, making it the best business checking account for busy small business owners. Open an account today.
Chase Business Complete Checking
The Chase business complete checking account offers various benefits, but the advantages of the credit card programs are the most attractive. Aside from the co-branded cards, you also get rewards points and significant cashback.
The Chase business checking account comes with three options. You have their basic business checking account, but you also have the Performance and Platinum business checking accounts.
There is no cash deposit processing fee if you deposit up to $5,000 every month; from that point upward, you'll be charged a fee. There is a $12 monthly service fee, but it may be waived with a $1,500 balance.
With the Chase business complete checking account, you also get easy access to mobile banking, so that you may perform business transactions on the go.
BlueVine Business Checking Account
If you want your business savings account and checking account to earn interest, then BlueVine may be what you are looking for. With an APR on balances up to $1oo,000, you may actually earn interest not only on the savings accounts but also on the checking accounts.
You don't need a minimum balance to open a business checking account, and you have no monthly service fee to pay either. The bank replaced the monthly maintenance fee with outgoing wire fees and cash deposits, which can be done at Green Dot locations.
The bank offers new business owners a free debit card, which requires no ATM fees as long as you withdraw from MoneyPass ATMs. You also get the ability to make mobile check deposits and conduct mobile banking 24/7.
Bank of America Checking Account
Bank of America is a good option for those who want an online account as well as the opportunity to go to physical branches when needed. Since there are more than 4,100 branches across the U.S., it streamlines your experience, no matter where your business may be.
The bank requires a monthly service fee of $12 for the business checking account, as well as a minimum opening deposit of $100. However, the monthly service fee can be waived if you keep at least a $10,000 minimum balance.
There are multiple types of business checking accounts that you can go for, depending on your preferences. You also have interest-bearing accounts with an API of up to 0.03% on your balance.
Wells Fargo Initiate Business Checking Account
If you prefer your business checking account to have a brick-and-mortar location so that you can make cash deposits with ease, then you may use the Wells Fargo Initiate account.
With this business checking account, you get $5,000 worth of fee-free cash deposits. The account does have a $10 monthly maintenance fee, but it gets waived if you have a minimum daily balance of $500.
The Wells Fargo business checking account holds potential for growth, as it allows you to open savings accounts and personal accounts, provides business credit cards, and offers access to business loans.
Since it is a big bank with more than 4,900 branches, the requirements to get a business checking account are stricter. As a new small business owner, you will need to present a business's employer identification number.
The Bottom Line
Getting a new business bank account may seem challenging when you haven't been in the industry for long. Banks want account owners they can rely on, and if you have a new business, you have no history to prove that you are legit.
Luckily, there are many banks out there that accept giving accounts to new businesses. You just need to browse through them and determine which one works best for your needs.
Explore Bonsai's business account - the integrated small business banking solution providing financial services for interior designers and other self-employed professionals. Compare your options and discover the Bonsai advantage.