The best account depends on what you actually do with it
There is no single "best" small business checking account because banks optimize for different things: some charge nothing if you keep a minimum balance, others charge a monthly fee but waive it if you receive direct deposits, and some charge per transaction. The account that works for a solo consultant who writes five checks a month will cost you money if you're a retail shop processing hundreds of card transactions daily.
Start by listing what you actually need: How many checks do you write per month? Do you deposit checks by phone or in person? Do you need to pay employees? Do you process card payments? How much cash do you typically keep in the account? The answers to these questions narrow the field faster than reading generic reviews.
Key Takeaways
- The lowest-cost account for your business depends on your monthly transaction volume and balance, not on which bank has the best reputation overall.
- Most banks waive monthly fees if you maintain a minimum balance (typically $500 to $2,500) or receive regular direct deposits, so the stated fee is often not what you pay.
- Online banks and credit unions often have lower fees and higher interest rates on balances, but may charge more per check deposited or offer fewer in-person services.
- You need to compare the actual cost to you: monthly fee minus any waiver, plus per-transaction charges for the things you do most often.
- Most banks let you open an account online with an EIN and basic business documents, though some still require you to visit a branch.
How to calculate your actual monthly cost
Banks publish a monthly fee, but that number often does not reflect what you pay. Chase, for example, charges $15 per month for its basic business checking, but waives it if you maintain a $2,500 balance or receive $500 in monthly direct deposits. If you meet either condition, your cost is zero.
Write down the monthly fee, then list the waivers. Check whether you already meet any of them—many small business owners do without realizing it. Then add the per-transaction costs: some banks charge $0.15 per check deposited, others charge nothing. Some charge $0.50 per wire transfer, others charge $15. These add up if you do them often.
The final number is what matters. A bank with a $10 monthly fee and no per-check charges might cost you $10 per month. A bank with no monthly fee but $0.25 per check deposited might cost you $15 per month if you deposit 60 checks. Spreadsheet the numbers for the three banks you're considering, using your actual transaction patterns.
Banks that work well for different business types
If you keep a large balance (over $2,500): Chase Business Checking, Bank of America Business Checking, and Wells Fargo Business Checking all waive their monthly fees at that threshold. These banks have physical branches, which matters if you deposit cash regularly or need to speak to someone in person. Chase and Bank of America also offer higher interest rates on balances above certain thresholds, though the rates are still low.
If you process many card transactions: Square Cash, Stripe, and PayPal all offer checking accounts tied to their payment processing. The accounts themselves are free, and the payment processing fees are built into the rate you already pay. This eliminates the need to reconcile deposits from a separate processor. Novo and Brex also offer free checking with no minimum balance, though Brex requires a minimum annual revenue of $100,000.
If you need to pay employees: Most banks offer payroll processing, but the cost varies widely—from $25 per payroll run to $1 per employee per run. Gusto and Rippling both offer checking accounts integrated with their payroll software, so you can pay employees directly from the account without switching platforms. This costs more upfront but saves time if you're already using their payroll system.
If you want no monthly fee and no minimum balance: Novo, LendingClub, and Axos all offer free business checking with no balance requirement and no per-check charges. These are online-only banks, so you cannot deposit cash in person, but you can deposit checks by phone photo or mail. The tradeoff is that you lose access to a physical branch.
What documents you need to open an account
Most banks require an Employer Identification Number (EIN), which you get free from the IRS. If you're a sole proprietor, you can use your Social Security Number instead, though some banks prefer an EIN. You will also need a government-issued ID and proof of your business address—a utility bill, lease, or business license usually works.
Some banks ask for articles of incorporation (if you're an LLC or corporation), a business license, or a recent tax return. Ask the bank before you start the process so you have the documents ready. Most banks let you open an account online, but a few still require you to visit a branch or have a video call with a representative.
Why online banks cost less but have tradeoffs
Online banks like Novo, LendingClub, and Axos have lower overhead than Chase or Bank of America, so they can offer free checking with no minimum balance. They also often pay interest on your balance, which traditional banks do not. The cost savings are real if you do not need to deposit cash or speak to someone by phone.
The tradeoff is that you cannot walk into a branch to deposit cash or resolve a problem face-to-face. If you deposit checks by mail or phone photo, there is a delay—usually two to three business days—before the money is available. If you need to dispute a transaction or freeze an account, you do it by email or chat, not by talking to someone when ready.
For a business that operates entirely online or by card, an online bank is often the better choice. For a business that handles cash regularly or needs when ready access to a representative, a traditional bank with branches is worth the fee.
Credit unions as an alternative
Credit unions often charge lower fees than banks and pay higher interest on balances. Many offer free business checking with no minimum balance. The catch is that you have to be a member, which usually means you work in a certain industry, live in a certain area, or belong to a certain organization.
If you are may be able to access for a credit union, compare their business checking to the banks on your list. Credit unions are often overlooked, but their fees and rates are frequently better. You can search for credit unions you are may be able to access to join at CO-OP.org or Shared Branch, which lets you access your account at thousands of credit union branches nationwide.
Frequently Asked Questions
Can I switch banks without closing my old account?
Yes. Open the new account, move your balance, and update your direct deposits and automatic payments. Keep the old account open for 30 days in case a check clears late, then close it. Some banks offer a switching service that handles the updates for you, though you still have to notify your customers of the new account number.
Do I need a separate business account or can I use my personal checking?
You can legally use a personal account, but it creates tax and liability problems. The IRS expects business income to go into a business account, and if you are sued, a personal account offers no protection—a creditor can go after your personal funds. A business account costs little and protects both your taxes and your personal assets.
What if I need to deposit cash but use an online bank?
Some online banks partner with retail locations like CVS or Walgreens to let you deposit cash. Others do not. If you deposit cash regularly, ask the bank whether they offer this before you open an account. If not, a traditional bank or credit union with branches is a better fit.
How long does it take to open a business checking account?
Online applications usually take 10 to 15 minutes, and the account opens within one to three business days. If the bank requires a branch visit or video call, add two to five days. You can usually start using the account before the debit card arrives, by transferring money or setting up direct deposits.
Do I need to keep a minimum balance to avoid fees?
It depends on the bank. Some waive fees at $500, others at $2,500, and some have no minimum at all. Check the fee schedule before you open the account. If you cannot maintain the minimum, choose a bank with no minimum or one that waives fees through direct deposits instead.