BizTip: The Business of Business Checking Accounts

Which business bank account is best for my business?

Having a business bank account helps keep business related finances separate from personal finances. Nerdwallet.com reminds us that there is no state or federal requirement to open a separate business bank account. However, having a separate account streamlines those transactions come tax time. The experts over at Bank of America suggests that having a separate bank account may also help your business establish an independent credit profile with rating agencies and potential lenders.

So, when you decide it’s time to separate your business from personal life, it’s a good idea to do a little research before you head on over to your personal bank branch and open a bank account or 2 or more (Why 2 or more? We will discuss that another time).

Here are a few things to consider and in the most part it comes down to avoiding those fees and oh! ALL those fees:

1. Minimum balance requirement – Does the bank require you to maintain a minimum balance at all times? If so, what is the fee if the balance drops, even if for a day?

2. Minimum number of transactions – Does the bank require you to use the account on a regular basis? Most have a maximum, see comparison table below, but do they also have a minimum? If so, how long can you go before the bank considers it a dormant account and charges monthly fees?

3. Recurring monthly fees – Is there a monthly fee if you don’t maintain a minimum balance or even if you do? If so, what is it and are there ways to avoid it? Some bank may require that you open a personal checking account and have a direct deposit or something along those lines. This is an important step. Be sure to find out.

I could go on and on about various fees that can be imposed and various ways to avoid those fees. But who has time to read all that. Here’s an overview of a few sample banks. All these are brick-and-mortar. It’s not a conclusive list but you will get the idea. Keep in mind most banks have more than one type of business bank account.

For sake of simplicity, I have picked the products that are closest to each other.

Bank --> Feature	Citizens Bank	Bank of America	DCU	TD Bank	Capital One
Account Name	Clearly Better Business Checking	Business Advantage Checking	Free Business Checking	TD Simple Checking	Basic Checking
Included Monthly Transactions	200 transactions at no charge	200 transactions at no charge	*	200 transactions at no charge	**
Minimum Balance	Any***	$5,000	Any	$25	$2,000
Monthly Fees	$0	$16 or $0 if minimum balance is maintained	$0	$10 No way to waive for this type of checking account.	$15
Link for more research	More	More	More	More	More

Note:

* So, the website does not mention the maximum number of transactions. But when I checked with the chatbot here’s what it said,

** No information available and no chatbot to check with. I am sure you can find out by walking into the branch

*** I was skeptical when I read this and tried to find the fine print but really, it’s true, there is no minimum balance requirement to open an account.

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These related topics will be covered in a future post:

• How do online banks compare when it comes to business checking account?

• Do I even need to have a different business bank account?

Do you have a bank you would like us to know? Drop the name in the comments section below.