What to Look For in a Business Checking Account

5 min read • Apr 18, 2021 • Derek Miller

Business owners should separate their personal and professional finances as soon as possible after opening. A business bank account will keep your income and expenses isolated from your personal finances, which will make bookkeeping, taxes, and forecasting—among other business activities—much easier.

A business bank account improves your organization and is actually required for business entities like an LLC.

Deciding to open a business checking account is the easy part—finding the right financial service provider to open your account is harder. Finding the right banking partner can help you save money and make the transition process easier. Here’s what you should consider if you need to open a business bank account. 

What Are the Fees and Minimum Amounts?

Fees are an important consideration when deciding where to open your bank account. Ideally, your account should be free or only require a small setup fee. 

You may need to shop around to evaluate account-related charges—this will ensure that your bank account is working for and not against you. A few questions to consider include:

  • What are the initial cost and setup fees?
  • Is there a monthly maintenance fee?
  • Does the account have a minimum deposit amount? What are the fees if you fall below that level?
  • Will you experience higher fees if you scale your business?
  • What’s the cost to have a debit card or checks made for the account? 

It might seem like a good deal to open a business checking account for free, but the added fees and minimum deposits could take more out of your pocket than you realize. 

Does Your Bank Have an App?

Mobile banking isn’t the future—it’s the present. According to a 2018 survey by Bankrate, 63% of consumers have at least 1 finance-related app on their phones. Of those who do, 70% check their banking apps at least once per week—and 16% check it every day. 

This data surely changed in 2020 as the coronavirus pandemic closed physical bank locations, driving a surge in online banking. 

There is so much demand for mobile banking that any financial provider you choose should have an app you can use. This app will allow you to check your accounts easily and address any issues that surface. These apps can also help you contact your bank’s customer service teams or apply for loans and other funding options. 

Some business owners want to support local financial institutions, which is honorable. However, you still need basic mobile features to keep your business functioning at its best.   

Are There Transaction Limits?

Your business might be small now, but the goal is always to grow—and you should ensure that your business checking account will grow with you. Review the limits of the accounts you’re considering to see which companies can scale alongside your business.

First, ask about the number of transactions allowed daily. If you have multiple deposits or charges each day, your bank might not be able to keep up. Next, ask about amount limits. You might not be able to move more than a few thousand dollars daily, which could be a problem in your industry. 

Look at the different tier options to see what’s available to you if your business gets too big for the current account. You may want to work with a bank where you can scale up instead of switching banks once you need a bigger financial service provider

What Are Your Customer Service Options? 

Ask the various financial service providers you’re considering about the customer service they offer. If there’s fraudulent activity on your account or issues related to your business, you won’t be able to wait to receive help. A few questions to ask related to customer service include:

  • Do they offer 24/7 service so there’s always someone to help you?  
  • Can you speak with a human representative if needed? 
  • What forms of customer service do they offer? Can you send emails, schedule phone calls, and have in-person meetings?
  • Do they offer assistance with international accounts and transfers? 

While you might not need to call your bank at 3am over a transfer from Germany, it’s important to know that someone can provide the support you need in the event of an emergency within your organization. 

What Protections Do They Offer?

You might assume that your business account offers the same protections as your personal checking or savings account, but that isn’t always the case. The FDIC protects your accounts from insolvency, not fraud. If your business falls victim to fraudulent withdrawals, you might have a difficult—if not impossible—time recouping your lost funds. 

Talk to potential banks about the protections they offer from fraud and cyber risks. Make sure these benefits extend to business accounts.   

If you’re still worried about the future of your money, look into commercial crime insurance, which can protect your business if it falls victim to a crime that’s outside of your control. 

Can You Earn Interest or Rewards?

What sorts of perks and benefits will your bank offer in exchange for your business? Some business checking accounts help you earn interest just by keeping your money there. Other accounts will give you cash back on certain expenses—much like a credit card. 

Evaluate any perks that come with the account and what you need to do to unlock them. For example, you may need to take out a business credit card to get the cashback benefits. This isn’t necessarily a bad thing, so long as the interest rates and fees are within your budget.  

Get the Financing You Need

Once you have a business checking account, you can apply for small business loans and lines of credit to make your professional dreams a reality. This is where our team at Lendio can help. 

Learn about the different loan types available and how each option can help you grow your business. With the right financial planning, you can quickly grow your customer base and turn an idea into a thriving business.

Derek Miller

Derek Miller is the CMO of Smack Apparel, the content guru at Great.com, and a marketing consultant for small businesses. He specializes in entrepreneurship, small business, and digital marketing, and his work has been featured in sites like Entrepreneur, GoDaddy, Score.org, and StartupCamp.