When you’re ready to open your own business, it’s essential that you choose the best bank for small businesses in your area. In general, smaller banks tend to offer more personalized services and cater to smaller businesses. However, this isn’t always the case. Larger banks might have more competitive rates, meaning you should do your research before signing up with any one institution. 

To help you find the right bank for your business, we’ve compiled a list of some of the best banks for small businesses. These are trustworthy financial institutions that are known for supporting small business owners with effective banking solutions and friendly staff members who understand their client’s needs on an individual basis.

What Is a Business Bank Account?

A business bank account is a special type of checking account offered by some financial institutions. These accounts are designed specifically for small businesses and allow companies to keep separate bookkeeping records for personal and business purposes. This helps ensure tax compliance and reduces risk exposure.

Business banking offers many benefits including:

  • Cash management – Banks provide daily cash receipts and disbursement reports to help you manage your money better. You can use this information to make sure there are enough funds to cover payroll, bills, and other expenses.
  • Wire transfers – Some banks offer instant wire transfers to pay suppliers, vendors, and employees.
  • Capital markets – Access to capital markets is important for growing businesses. Banks offer loans and lines of credit to support growth.
  • Electronic check processing – Banks can process checks electronically, saving paper and postage costs.
  • Online bill payments – Billing statements and invoices can be paid online via e-mail or a secure portal.

Do You Need to Get a Separate Small Business Bank Account?

Business owners often wonder whether they need to set up a separate bank account for their small business. This question is especially relevant if you plan on paying yourself a salary, making payroll deposits, or filing taxes. 

If you are self-employed, you should use a business checking account to make deposits into your business’s operating accounts. If you want to pay yourself a salary, you should pay yourself out of a business checking account.

Does My Small Business Need a Bank Account?

Most small businesses need a bank account. A legitimate business needs to pay taxes, file reports, and keep accurate records. A bank account makes it easier to do all of those things. Plus, having a business account gives you access to business credit cards and loans.

Many banks offer special deals for businesses. For example, many banks offer free checking accounts for small businesses with fewer than 25 employees or less than $10,000 a month in revenue. Some even waive monthly maintenance fees entirely.

Can I Open a Business Bank Account Online?

Opening a business bank account online is possible. You just need to know where to look. Many banks offer online banking services, allowing you to manage your money from anywhere.

Before you begin, it helps to understand what type of account you want. A traditional checking account allows you to write checks against your balance and make deposits into your account. An interest-bearing savings account earns interest on your money while it sits idle. You can also set up automatic transfers from one account to another.

Once you’ve determined what type of account you’d like, choose a bank that offers small business banking. Some banks require you to use their mobile app to access your account information, while others allow you to log in from any computer.

Do You Need to Get a Separate Small Business Bank Account?

If you are planning to run any kind of business, then you should definitely get a separate bank account for your small business. This way, you can keep all the transactions related to your business separate from your personal accounts. It also makes it easier for you to track the money coming in and going out of your business. 

Can I Open a Business Bank Account Online?

Yes! Many banks offer online business banking services. This means that you can manage all aspects of your business finances through the Internet. If you have a checking or savings account with a bank, you may be able to access these accounts online. Some banks also allow you to set up automatic payments, such as payroll deposits, so you don’t even have to think about them.

What Do You Need to Open a Business Bank Account?

If you want to open a business bank account, you have to provide proof of identity, such as a driver’s license or passport; proof of residence, like a utility bill; and proof of income, like a W-2 form or 1099 tax forms. You may also need to supply documentation about your business, such as a copy of your state business license or federal EIN number.

What to Look for in a Bank

Here are some things to consider when choosing a business banking account.

1. Types of Accounts

There are several types of business banking accounts. Each type provides certain benefits and each one requires a slightly different approach. For example, a traditional checking account allows you to write checks and make deposits. A payroll deposit account allows you to pay bills electronically and receive payments automatically. Both types of accounts require a personal identification number (PIN).

2. Fees

Many banks charge monthly fees for both checking and savings accounts. You might want to avoid paying these fees because they eat into your profit margin. However, there are ways to reduce the cost of maintaining a business account. First, look for a bank that charges no annual maintenance fee. Second, check whether the bank offers overdraft protection. This feature protects your account against negative balances. Third, ask about promotional interest rates. These rates usually apply to small amounts of money deposited in a short period of time. If you do not use the money within the promotional window, you will still earn interest on it.

3. Features

Some banks offer free checking accounts. Others allow you to set up automatic bill payment. Still others provide online access to your account information. Look for features that suit your business needs. For instance, if you plan to open a business credit card, you might want to find out if the bank offers rewards programs. Rewards programs give you points for making purchases. You can redeem those points for cash or merchandise.

What are the Most Important Features of Business Checking Accounts?

A business checking account can be very useful if you have multiple employees or contractors who work for you. It allows you to manage payroll, track expenses, and make deposits and withdrawals without having to go through several different financial institutions.

Some important features of business checking accounts to look for include :

  • Online access to your account information
  • Overdraft protection
  • Free checking
  • No minimum balance requirement
  • Low monthly service fees
  • Bill pay
  • Interest on any amount you keep in your account 

How are Business and Personal Checking Accounts Different?

A business checking account allows you to write checks against your company’s funds. It also gives you access to online banking services like bill payment and transfers between accounts. With a personal checking account, you only have access to your own personal funds. 

Are Small Banks Better for Small Businesses?

Small banks are often more flexible with their lending policies than large ones. They may be willing to lend money at higher interest rates or offer longer terms. This can help small businesses get started without having to borrow too much money. If you want to work with a bank that has extensive experience serving small business owners, consider applying for a loan through a credit union instead.

Do I Need a Business Account If I’m Self-employed?

A business account allows you to track all income and expenses related to your business. It also lets you set up multiple bank accounts so you can keep separate records for each one. It can be a smart decision no matter the size of your business.

Best Banks for Small Business

As you search for the best banks for small businesses, be sure to explore the following institutions:

  • Capital One
  • Wells Fargo
  • Regions Bank
  • Citibank
  • PNC Bank
  • U.S. Bank
  • Chase
  • Square
  • Navy Federal Credit Union
  • Local Credit Unions

Conclusion

Finding the right bank for your business is an important step toward growing your business. There are many factors to consider when choosing a bank. The most important thing to remember is that you should choose a bank that meets your specific needs.

If you’re ready to get started with a professional answering service, we’re here to help. Contact Answer Aide by calling (866) 427-3500 or by filling out our online form. We’re happy to partner with you to support your business while it grows.