Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.
Updated on 4/12/2021: We updated this review with a new section on each company’s BBB grade and reputation. We’re currently adding information on trustworthiness to all of Personal Finance Insider’s guides.
The best free business checking accounts of 2021
|Institution||Min. opening deposit||Max. monthly transactions||Next steps|
Free business checking accounts don’t charge monthly service fees. The best accounts make banking even more affordable by requiring low minimum opening deposits and charging low wire transfer, overdraft, or out-of-network ATM fees.
The right checking account should also be convenient for your type of business. Do you need to deposit cash? Then an online account with no way to put in cash won’t be a good fit. Do you make numerous transactions every month? You might want an account with unlimited free monthly withdrawals and deposits.
Keep reading to learn about our top picks for the best free business checking accounts.
Our expert panel for this guide
We consulted banking and financial planning experts to inform these picks and provide their advice on finding the best business checking accounts for your needs. You can read their insights at the bottom of this post.
We’re focusing on what will make a business checking account the most useful, including low fees, transaction limits, branch locations, and more.
More about our top picks
Axos Basic Business Checking
Axos Bank Basic Business Checking Account
- $50 minimum opening deposit
- No monthly service fees
- Unlimited free monthly transactions
- No incoming domestic or international wire transfer fees
- Connect Novo to tools such as QuickBooks, Slack, and TransferWise
- Refunds all ATM fees
- Perks like cash back and savings with companies such as Google Ads, Stripe, and Booking.com
- No physical locations
- No way to deposit cash
- Can’t send wire transfers
- Link to QuickBooks, Shopify, Slack, Xero, TransferWise, Zapier, and Stripe
- Earn perks like cash back and savings at companies
- No ATM network, but refunds all fees charged by ATM providers
- Deposits are FDIC insured through partner bank, Middlesex Federal Savings, F.A.
Why it stands out: You can make an unlimited number of free transactions with Novo. There’s no ATM network, but if an ATM provider charges you a fee, Novo will refund you. You’ll also earn perks with companies like Google Cloud and Booking.com, including cash back, cash savings, and percentage discounts.
What to look out for: Wire transfers. You can receive domestic and international wire transfers, but you can’t send them. You can make free ACH transfers, although these may take a couple more days to process than wire transfers would.
Other free business checking accounts we considered
We looked at multiple business checking accounts before selecting our favorites. Many were strong contenders, and you still may prefer one that isn’t on our list, depending on what you’re looking for. Here are some other options:
- OneUnited UNITY Small Business: This is a good option by the largest Black-owned bank in the US, but you can only open a business account at a branch in Southern California, Miami, or Boston.
- BBVA USA Business Connect Checking: With this account, you can only make $5,000 in non-digital transactions each month for free. On the bright side, the fee for any transactions exceeding $5,000 is only $0.003 per dollar, or $3 for every $1,000.
- Huntington National Bank Business Checking 100: You can only make 100 monthly transactions for free, which is significantly less than what you can do with our top picks.
- Navy Federal Credit Union Business Checking: This is a good option if your family is associated with the military, but you can only make 30 free non-digital transactions every month.
- Chase Business Complete Checking: There’s a $15 monthly service fee unless you meet certain criteria.
- Wells Fargo Initiate Business Checking: There’s a $10 monthly fee unless you maintain a $500 balance or $1,000 average ledger balance.
- Bank of America Business Fundamentals Checking: Unless you qualify to waive monthly fees, you’ll pay $16 each month.
- US Bank Silver Business Package: This is a good large, national bank option, but you’re only allowed 125 free monthly transactions.
Are these banks trustworthy?
The Better Business Bureau grades companies’ trustworthiness based on responses to customer complaints, advertising, and transparency about business practices. Here are the BBB scores for our top picks:
|First Citizens Bank||A+|
Most of the companies on our list have received strong scores from the BBB. The exceptions are Bank OZK, Brex, and Novo.
The Bank OZK and Brex grades can be attributed to the fact that they haven’t responded to all customer complaints on the BBB website. Novo’s bad grade is partially due to not answering customer complaints, but also because the company hasn’t been in business very long compared to others.
Some of these companies have recent public controversies.
In 2019, a former executive filed a lawsuit against Bank OZK, claiming her colleagues engaged in sexual misconduct and disriminated based on age. The Consumer Finance Protection Bureau filed a lawsuit against Citizens Bank and claimed that the bank denied customers’ claims of unauthorized credit card use and billing mistakes, didn’t fully refund customers when they reported fraud, and didn’t properly respond to customer when they contacted Citizens Bank about these issues.
If these recent scandals worry you, you may decide to bank with one of our other top picks.
Frequently asked questions
What was our methodology in choosing the best business checking accounts?
First, we looked at accounts that are actually free, meaning they don’t charge any monthly service fees.
Then we looked at the minimum amount you need to open the account. If a bank had a high minimum opening deposit, we didn’t include it. Of our top picks, the most you’ll need to open an account is $1,000 with Axos Bank.
We also looked at how many free transactions you can make each month with an account. All our top choices let you make at least 175 monthly transactions, and many offer unlimited transactions.
What factors should I look at when comparing business checking accounts?
When choosing between business checking accounts, ask yourself the following questions:
- Do I want an online or in-person account? We’ve listed both digital and brick-and-mortar checking accounts. Online banks typically have more flexibility and lower fees, but brick-and-mortar institutions are helpful if you use in-person services.
- How many transactions will my business need to make each month? If you suspect the number will be in the hundreds, you may want an account that allows an unlimited number.
- How much will I deposit in cash each month? Some banks limit how much you can deposit in cash, and some online accounts don’t have a way for you to deposit cash at all.
- Will I need to make wire transfers? A wire transfer is a tool for moving money electronically from your bank to a friend or family member’s bank. It can be especially useful if you don’t have access to the recipient’s bank. Some banks allow free wire transfers, others don’t. If you expect to send or receive wire transfer, check a bank’s fees first.
- Will perks help me out? Some accounts, such as Novo Business and Brex Cash Account, offer perks like cash back at certain companies. If these are companies you work with regularly, using a partnering account could help you save money.
Can I use a personal account as a business account?
Yes, you can use a personal checking account for your business — but doing so comes with complications. Your personal name rather than business name will appear on checks, and you may find it difficult to separate personal and business spending. It could also be tricky when tax season rolls around and you need to prove business-related purchases.
What do you need to open a business checking account?
You’ll probably need the following documents to open an account:
- Employer identification number, or social security number if the business is a sole proprietorship
- Business license
- Formation documents
- Owners agreement
The experts’ advice on choosing a business checking account
To learn more about what makes a good account and how to choose the best fit, four experts weighed in:
- Tania Brown, certified financial planner at SaverLife
- Roger Ma, certified financial planner with lifelaidout® and author of “Work Your Money, Not Your Life”
- Mykail James, MBA, certified financial education instructor, BoujieBudgets.com
- Laura Grace Tarpley, certified educator in personal finance, associate editor of banking, Personal Finance Insider
Here’s what they had to say about finding an account. (Some text may be lightly edited for clarity.)
How can someone choose the business checking account that’s right for them?
Tania Brown, CFP:
“Consider how you will use the bank account, and what features the account needs to have for you to run your business with ease. Here are a few examples of questions to think about:
“How much is your average account balance? If you are new and broke, you may not see the benefits of a business checking account with free services for balances over $100k.
“What types of transactions do you do the most? Do you write a lot of checks or do a lot of wire transfers? Whatever transactions you do the most, you want to make sure you choose a bank that will charge the least (preferably nothing) for these services.
“Do you want to be able to integrate your accounting software with your bank? If you, check your accounting software program to see how easily the program integrates with your potential bank.”
Roger Ma, CFP:
“Someone may want to consider whether they value having a physical branch nearby. If so, they may prefer to use a brick-and-mortar bank instead of an online bank. In addition, someone should also consider their business’s other financial needs. Down the road, would they want to be able to work with the same bank to open a business credit card, open a line of credit, or get a business loan?”
What should someone look for in a brick-and-mortar bank?
Mykail James, CFEI:
“How accessible it is. Where are the branches? And if I am to go out of town or something, how accessible is my money to me?”
Laura Grace Tarpley, CEPF:
“If you plan to deposit cash at a branch, check whether the bank limits how much your business can deposit each month before incurring a fee.”
What should someone look for in an online bank?
Tania Brown, CFP:
“With an online bank, absolutely online customer service, because you do not have the advantage of walking inside and talking to a human being. How often are you able to get them? What are their hours?”
Mykail James, CFEI:
“What type of securities do they provide? Do they have two-factor identification? If it’s an online bank, they should definitely have — at the bare minimum — two-factor authentication in how easy it is to change your passwords and things like that, because you want to be a little more hypersensitive about the cyber security for a strictly online bank.”
Laura Grace Tarpley is the editor of banking and mortgages at Personal Finance Insider, covering mortgages, refinancing, bank accounts, and bank reviews. She is also a Certified Educator in Personal Finance (CEPF). Over her four years of covering personal finance, she has written extensively about ways to save, invest, and navigate loans.
Get the latest Bank of America stock price here.
Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.
Source: Read Full Article