Choosing the best business checking account is a difficult task. Not only are there many different options to choose from, but each account has its own specific features. However, this guide will help you make a more informed decision about choosing the Best business checking account by breaking down those features and explaining which ones are most important for your small business.
In the beginning of this article, I will give you 5 tips to help you choose the best business checking account.
What’s your Business Type?
There are many different business types. You may have a certain type in mind, but it is always beneficial to know if your type best fits with your needs. As a rule of thumb, if you see yourself making a lot of deposits and using checks, you should probably opt in for cash-back offers such as opening an account at an online bank or credit union. For example, Capital One 360 offers 2% cash back on all purchases every month (limited time only).
What are the Monthly Fees?
Monthly fees can really add up if you don’t select the right account for your business needs. For example, the nation’s largest credit union, Washington Federal, is usually one of the most affordable around. It has an annual fee of only $25 and no monthly fees whatsoever.
On the other hand, some banks offer great interest rates on business checking accounts, but also have an average monthly fee of $25 or more. Unfortunately, these fees are just adding up to your total interest costs which are not very valuable in comparison to savings accounts.
What’s Your Bank’s/Credit Union’s Interest Rates?
This one is pretty straight forward. Banks and credit unions will often offer tiered interest rates, which means that their interest rates differ depending on how much money you have in the account. Take a look at their rate chart and see if you qualify for their best interest rate—it could be worth it to open an account with them before you start putting any money into the account.
Are There Minimum Balance Requirements?
Some checking accounts require a certain minimum balance in order to avoid monthly fees or to qualify for an increased interest rate. This is especially true for online banks and credit unions that do not charge monthly fees. As a result, these are the best kinds of checking accounts for small business owners because you don’t have to manage if you won’t reach some minimum balance requirement.
Are There Additional Benefits?
There’s no doubt that a free checking account is a great perk, but there are other great benefits to consider before finalizing your decision on the best business checking account. One thing to keep in mind is whether or not your branch will be available around your area. Many bank branches have been closed down recently, so it’s a great idea to check if one will be near you when opening an account (or even switching banks).