The Best Business Bank Accounts for New Business Owners: Establish Your Relationship Early

Starting a business is a thrilling journey filled with anticipation, ambition, and, yes, a fair amount of complexity. Among the foundational steps in this entrepreneurial adventure, setting up a business bank account is pertinent, but we see a lot of new business owners holding off on this step. At Growegy, Inc., we’re here to guide you through the process and help you find some great options, ensuring you have all the tools you need to grow your business and pave the way for future funding opportunities.

Why Open a Business Bank Account?

Creating a clear separation between personal and business finances is essential for both legal protection and IRS compliance. Keeping your transactions distinct allows for easier management during tax season and helps avoid any legal complications by drawing a clear separation in finances. It also simplifies the process of tracking both incomes and expenses, making it easier to measure your business’s financial health.

Physical Banks vs. Online Banks

Physical Banks

Pros:

• In-Person Services: Direct access to customer service and face-to-face consultations.
• Cash Deposits: Easier handling of cash deposits if your business involves physical currency transactions.
• Local Presence: Community-oriented with networking opportunities.

Cons:

• Limited Hours: Restricted by branch opening times.
• Slower Processes: Some tasks, like loan approvals, may take longer given traditional procedures.
• Fees: Oftentimes physical banks charge higher fees than the online only options.

Online Banks

Pros:

• Accessibility: 24/7 access to your accounts and ease of managing finances on-the-go.
• Lower Fees: Generally, online banks offer lower fees due to reduced overhead costs.
• Convenience: Seamless integration with accounting software and other business tools.
• Best Accounts for New Business Owners: Easier to establish with less requirements and fees.

Cons:

• Limited Physical Presence: Lack of face-to-face service may be challenging for businesses needing regular cash transactions.
• Less Personalization: Automated services may lack the personal touch of a dedicated banker.
• Access to ATMs: Online only banks typically utilize another bank’s ATMs machines, they may be more difficult to locate than a big brick and mortar bank for those quick transactions.

Financial Institutions to Consider

Navy Federal Credit Union

Fees: No monthly maintenance fees on the basic accounts.

Features: Offers competitive loans and lines of credit – great financial options for small business owners. 24/7 Customer Service. Expert help from small business professionals with expertise in Veteran-owned businesses. Tailored insurance and other business protection options.

Requirements: Open to military members and families (you need an invitation if you aren’t a service member). Documents required: EIN, Government ID, SSN, Articles of Organization, may also need business license depending on structure. Minimum deposit required (typically $250).

Capital One Business Checking

Fees: No hidden fees or monthly charges, no minimum balance requirement and no overdraft fees.

Features: Ideal for startups and freelancers. Integrates with multiple tools like Slack, Stripe, and QuickBooks. Mobile check deposits, free invoicing and budgeting tools, and fraud monitoring.

Requirements: US Address, SSN, US Phone Number, Government Issued ID, EIN and Business Formation Documents.

Novo

Fees: No monthly maintenance fees on the basic accounts.

Features: Offers competitive loans and lines of credit – great financial options for small business owners. 24/7 Customer Service. Expert help from small business professionals with expertise in Veteran-owned businesses. Tailored insurance and other business protection options.

Requirements: Open to military members and families (you need an invitation if you aren’t a service member). Documents required: EIN, Government ID, SSN, Articles of Organization, may also need business license depending on structure. Minimum deposit required (typically $250).

American Express Business Checking

Fees: No monthly fees.

Features: Competitive interest rates on balances, earn reward points on purchases and 24/7 support.

Requirements: SSN, Government ID, EIN and Business Formation Documents.

Bluevine Business Checking

Fees: No monthly fees.

Features: Earn interest on deposits, FDIC Insured, secure payments links generated for you to send your customers, mobile check deposit, automated accounts payable, access for your team and fraud protection.

Requirements: Must be 18 or older, US business owner with a physical US address, personal information for all owners like SSN and date of birth, EIN and Articles of Organization.

Bank of America Business Advantage Banking

Fees: Waivable monthly maintenance fees starting at $16/month.

Features: Strong local presence with extensive branch network, access to Zelle and a QuickBooks Integration. They also offer a variety of credit products for small business owners.

Requirements: A personal checking account with Bank of America, an LLC with Articles of Organization and your EIN. This bank requires that you have a personal and business account can cause issues for you down the line as this can cause confusion about whether your personal finances are truly separate from the business. Proceed with caution.

US Bank Small Business Checking

Fees: $0 on the essential plan and $30 on Platinum, monthly fees can be waived.

Features: Offers easy onboarding and reliable online tools, plus account integrations. Best for small businesses with moderate activity.

Requirements: SSN, Legan Name, Email Address, Home Address, Mobile Number, EIN, Legal Business Name and Address and Minimum Deposit of $100. You must also be 20% or more owner of your business. A break down of the requirements for each business type can be found here.

Chase Business Complete Banking

Fees: $15 waivable monthly service fee but the requirements to have the fee waived are higher than those at other institutions.

Features: Offers extensive digital tools and integrations such as built in invoicing. Offers a significant bonus to new account holders. Fraud protection services are included. Other financial products offered for business owners, however, expect stricter standards and expectations for lending.

Requirements: Government ID, SSN, EIN, and Articles of Organization >a href=”https://www.chase.com/business/resources/business-bank-account-information” target=”_new”>(see checklist here).

Truist Small Business Bank Account

Fees: $0 monthly fee options available.

Features: Many branches in the Southeast. Multiple credit product offerings tailored to small businesses. Three accounts to choose from so you get the features that align with your business. Local branches available can make transfers from outside banks, mobile deposits available, discounts offered on payroll fees. Rewards are available if you meet $25,000 or more in deposits for the month.

Requirements: Minimum deposit of $100. EIN and Articles of Organization, estimated annual revenue, state and date established. You will also need your SSN, Government ID, two years of address history and employment and income information.

Opening a Business Bank Account Online for Convenience

For businesses registered in a different state than they operate, opening an account online can be a smart first step. This approach allows you to start your account with ease and then visit a physical branch if necessary. If your business is registered in a different state and you try to go into your local branch to open the account, you could be turned away.

Opening an online account broadens your options for your business and streamlines the process. If you don’t have a ton of cashflow now, that’s okay. Many online accounts are free, and you can start off with an initial deposit investment to get the account going. This creates a clear separation of assets from the business and helps to protect your personal assets. It also keeps your financials clear and clean for tax time. No pouring over financial statements and trying to figure out which purchases were for the business! It’s particularly beneficial for startups without regular cash flow, keeping the startup process smooth and less cumbersome while still allowing you to set a solid foundation.

Growegy’s Advice

Starting early with your business banking is key to ensuring compliance and protection from potential legal issues. With structural guidance and foresight, you can save yourself from tedious financial audits. At Growegy, we’re committed to fast-tracking your business’s productivity and offering creative pathways to funding. Remember, the right financial foundation paves the way for a successful future.