SMALL BUSINESS ACCOUNT: How to Open an Account Stress-Free!!! (+Free Tips)

Small business account
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If you own or are considering starting a small business, I can assure you that you will require a small business account. You could jeopardize yourself and your company if you don’t. When you manage a small business, you will have a lot more responsibilities than if you were an individual with a personal bank account. To begin, be sure that your business and personal finances are kept separate. If they aren’t, you could be exposed to risk in a variety of ways, including liability for business debts and litigation, as well as problems when it comes time to file your taxes. That is why in this article we shall be discussing online small business account, how to open a small business account and so much more.

Small Business Bank Account

Small business banking refers to a company’s financial dealings with a financial institution that specializes in providing business loans, credit, savings accounts, and checking accounts to businesses rather than individuals.

When a bank, or a subsidiary of a bank, only deals with businesses, it is known as business banking. A retail bank is one that mostly deals with individuals, whereas an investment bank is one that primarily deals with capital markets. Some financial institutions cater to both categories of customers.

Overview

Having a professional business bank account is vital whether you’re just starting out or have been in business for a long time. Every business or organization, no matter how tiny, requires one: It is crucial to the financial operations of your company since it collects deposits from customers and makes payments to staff and vendors. It’s also necessary for appropriate bookkeeping, tax reporting, and other legal requirements.

There is no one-size-fits-all solution for a company bank account: What you require depends on the type of company you run, its size, and its complexity. However, there are some account features that all business owners, regardless of their industry, should examine when looking for a financial institution. We’ve combed through the options and selected the finest in numerous categories.

Benefits of small Business Bank Account

You’ll need a business checking account if you’re a small business owner or a startup founder. Why not just use your personal checking account to pay for business expenses? Here’s why you should get a separate business account:

  • It will make accounting a lot easier and give you greater visibility into whether or not your business is profitable
  • It will help you better manage your business cash flow
  • This will make it easier to account for business expenses at tax time
  • It will make the transition to an LLC or corporation much easier should you decide to formalize your business entity down the road

Many small company lenders, including the SBA, will not even evaluate your loan application unless you have a business banking account, making it far more difficult to find small business loans to drive expansion or financially fund business activities. In other words, most small businesses benefit from having a company checking account.

Today, you may discover a range of fee-free business checking accounts, as well as those that give a limited amount of free transactions before costs kick in. Some companies provide benefits such as cashback or discounts on business supplies.

Small Business Bank Account Online

Opening a small business bank account online is often faster and easier than visiting a branch and filling out an application, and you can do it on your own time.

Here, we’ll go through some of the top options for opening a small business bank account online, so you can select the ideal option for your company.

#1. LendingClub

LendingClub Tailored Checking is ideal for growing businesses. The online business account offers a robust suite of online and mobile banking tools, plus the ability to earn interest.

Features include:

  • Unlimited fee-free transactions
  • Fee-free access to a worldwide network of ATMs and unlimited reimbursements on fees charged by other banks
  • Earn 0.10% APY on balances over $5,000
  • Access to the LendingClub mobile app which allows you to create digital invoices, send wires and ACH transfers, make deposits, and pay bills
  • Earn 1% cash back on online and signature-based “credit” transactions made with your LendingClub business debit card

You can apply for an account online in just a few minutes but LendingClub may take two to five business days to process your application. Open a LendingClub Account Now

#2. Brex Cash

First things first: Brex Cash isn’t a business bank account. Brex Cash is a cash management account, offered by Brex Treasury LLC, a registered broker-dealer that is a member of FINRA and SIPC.

You can deposit your funds as cash (where you’ll have FDIC protection of up to $250,000) or you can invest into a money market fund that yields dividends. And, you don’t have to choose just one, you can allocate between the two options however you’d like.

Brex Cash offers a range of other perks, with a focus on tech-first, online-focused businesses. Here’s what you can expect with this cash management account:

  • Free unlimited ACH, wire, and check payment options (including international)
  • No monthly fees, no minimum balance requirements
  • Instant payouts for ecommerce companies receive funds for your sales right away instead of waiting days or even weeks
  • Integrated expense management tools

Brex Cash also includes access to the Brex credit card, which is paid from your account daily (like a debit card), and offers competitive rewards points on your transactions, which can be redeemed for cash back, gift cards, or miles.

You can earn:

  • Up to 8x points on ridesharing
  • Up to 5x points on flights and hotels booked through Brex Travel
  • Close to 4x points on dining
  • Up to 3x points on recurring software
  • 1x points on everything else with no limits.

Brex Cash is an online-only account and can be a great option for business owners looking to manage their finances digitally especially those who want to take advantage of the rewards points or any of Brex’s other unique features.

#3. Novo

Novo is an online business bank account that was created specifically with startups and small business owners in mind. This business checking has no monthly fees, unlimited fee-free transactions, and access to a range of features designed to help entrepreneurs manage their finances online.

Some of Novo’s benefits include:

  • Unlimited ATM refunds (instead of a designated ATM network)
  • Free ACH transfers, mailed checks, and incoming wires
  • Unlimited integrated invoicing
  • Novo Reserves tool for budgeting and planning expenses
  • Integrations with business tools like Stripe, Shopify, QuickBooks, and Xero
  • Its mobile app, which allows you to track expenses and payments, make transfers, deposit checks, and more

It requires a $50 minimum opening deposit. Applying online is quick and simple but it typically takes two to three business days to review applications.

#4. NBKC

With NBKC, you can open both a business checking account and business savings account online. NBKC’s business checking account, also called their “Business Account,” has virtually no fees. In fact, the only fees NBKC charges are a $5 fee to send domestic wires and $45 to send or receive international wires.

This online business checking account offers:

  • No minimum opening deposit, no minimum balance requirements, and no monthly fees
  • No fees for transactions, overdrafts, check deposits, e-statements, stop payments, and incoming domestic wires
  • Online and mobile banking included
  • Fee-free access to over 32,000 MoneyPass ATMs across the U.S. to withdraw or deposit cash plus, up to $12 in monthly refunds for fees charged by other ATMs
  • Option to add extra account features, like desktop deposit or ACH credits and debits, for small monthly fees

#5. BlueVine

BlueVine, which is perhaps best known for its business financing platform, also offers a free online business checking account. More so, business owners who wish to avoid fees and earn interest on their balance might consider the BlueVine business checking account.

Features include:

  • No minimum deposit, no monthly balance requirement, and no monthly service fees
  • Unlimited number of transactions, no fees for non-sufficient funds, no ACH payment fees, and no fees to receive domestic wire payments
  • Earns 1% interest on account balances up to $100,000
  • Offers mobile check deposit, account transfers, the ability to pay vendors and bills by ACH, wire, or check, as well as the ability to schedule one-time and recurring payments
  • Fee-free cash withdrawals at any ATM within the MoneyPass network and the ability to deposit cash at over 90,000 Green Dot locations across the U.S.

#6. Chase

Chase Business Complete Banking combines the best of both worlds by allowing you to open a business checking account online while also providing access to over 4,700 physical locations essential for organizations that deal primarily in cash.

With Chase Business Complete Banking, you receive:

  • Unlimited electronic deposits
  • 20 free paper and teller transactions per month
  • Up to $5,000 in cash deposits per month, fee free
  • Free online and mobile banking with bill pay
  • Integrated credit card processing through Chase QuickAccept
  • Access to 16,000 Chase ATMs

This account has a $15 monthly fee; however, there are multiple ways you can waive it. You can open an account thus, online if your business is a privately held sole proprietorship, LLC, or corporation. All other business types need to apply at a branch location.

#7. Bank of America

Bank of America business checking is a great option for growing and evolving business banking needs. The brick-and-mortar bank offers more free physical transactions per month than Chase Business Complete Banking which can be important if you’re looking for in-person banking.

For example, here’s what you can expect with Bank of America’s Business Advantage Fundamentals account:

  • Unlimited fee-free electronic transactions.
  • Up to 200 fee-free non-electronic transactions per month.
  • Up to $7,500 in fee-free cash deposits per month.
  • Access to 17,000 Bank of America ATMs and 4,300 branch locations across the U.S.
  • Free mobile banking, customizable account alerts, Zelle for your business
  • Business Advantage 360 online banking platform with the integrated Cash Flow Monitor tool

Also, as your business grows, you can always upgrade to the next level, the Business Advantage Relationship account. Bank of America also offers a Preferred Rewards program for eligible business owners. This program gives you access to discounts on other products and services, as well as a way to waive the monthly fees on either of the business checking accounts.

How To Open Small Business Bank Account

You can open a business checking account online by providing some basic business and personal information and uploading key documents.

While the exact requirements will vary from one bank to the next, here’s what you need to open a business bank account:

  • Personal details and identification (driver’s license, social security number)
  • Basic business information (EIN, address)
  • Business formation document, such as articles of incorporation, a partnership agreement, articles of organization, etc. (based on your entity type)
  • DBA certificate (if your business is using a DBA)

Applying for an online business bank account may only take a few minutes, but it will take several business days for your application to be reviewed and approved.

How to choose a free business checking account

#1. Consider fees and minimum balance requirements

Look for business checking accounts that don’t charge monthly service fees and don’t require a minimum balance. Also, read the fine print carefully: some accounts are free only if you keep a daily or monthly minimum amount or meet another requirement to avoid paying a service fee.

#2. Look at transaction and cash deposit limits

Examine how many transactions and how much money your company makes each month. Many business checking accounts impose transaction and cash deposit limits (and levy penalties if those limits are exceeded), so choose an account that suits your needs.

#3. Evaluate additional account features

Consider where you can use your business debit card, whether the account pays interest, and whether you have access to online and mobile banking. Also, make sure you’re aware of any features that could result in additional fees or charges.

#4. Think about how you would prefer to open an account

Some banks offer a variety of ways to open a business checking account, such as online, over the phone, or in person, while others have fewer alternatives.

FAQ

How do I pay myself from my LLC?

You pay yourself from your single-member LLC by making an owner’s draw. Your single-member LLC is a “disregarded entity.” 

Should I pay myself a salary from my LLC?


Do I need to pay myself a salary? If you’re a single-member LLC, you simply take a draw or distribution. There’s no need to pay yourself as an employee.

Should owner of LLC be on payroll?

Therefore, the business must put them on its payroll and compensate them through wages or salaries from which income taxes, Social Security and Medicare taxes (FICA), unemployment taxes (FUTA), and possibly other taxes are withheld.

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