Best Banks for Small Business in 2024

Best Banks for Small Business in 2024

Posted: July 10, 2024 | Updated: July 9, 2024

Once your small business begins earning profits and incurring expenses, you will need a business bank account for daily operations and managing cash flow. A dedicated account enhances your business’s credibility, keeps personal and business finances separate, and might improve your chances of securing a line of credit (LOC). However, with over 4,800 banks in the US, this article aims to guide you in selecting the best banks for small businesses in 2024.

According to a 2023 survey, 96% of small-business owners report having a business banking account. Choosing a top bank for small businesses can assist with various tasks, from managing payroll to allocating funds for office supplies, even if you need to improve with numbers. For entrepreneurs, while opening a business bank account may initially seem cumbersome, it ultimately simplifies financial management by clearly showing expenses, payments, and paid bills.

Things to Factor In While Choosing the Right Bank for Your Business

While several personal/business-related preferences come into play when choosing a business account for your small business, here are some important aspects to consider:

1. Online or In-Person?

For small business owners, selecting a bank offering online and in-person banking services is crucial. Whether you operate a digital storefront or a physical one, the ability to manage your finances through online and mobile banking applications is essential. This allows you to oversee your financial activities and transactions at your convenience.

However, the availability of online banking does not diminish the necessity for physical branch services. This is particularly true for businesses that handle cash transactions, as frequent cash deposits are a routine requirement. Physical branches also provide more comprehensive customer support.

2. What Services Do You Need?

When choosing a bank, certain fundamental services are essential for business operations. These include:

  • Checking and savings accounts
  • Business credit and debit cards
  • Checkbooks and deposit-only cards
  • Online business banking platforms
  • Accounts for employees

It’s important to investigate each service, paying close attention to any associated fees or requirements. While some banks charge fees for checking accounts, others may offer free business checking with no required minimum balance. Since fees and requirements can vary significantly between banks, it’s beneficial to compare options thoroughly.

Additionally, if your business may need further financial services like LOCs, inquire about these upfront to avoid surprises after you’ve committed to a banking relationship.

3.   Bank’s Location

The location of a bank should be another major factor in your decision. Evaluate the bank’s distance from your office, home, and frequent travel destinations. Consider how often you need to make deposits or withdrawals, require bank-issued certified checks, or use ATMs during travel.

The frequency with which you’ll need to visit a bank and your travel needs should influence your choice. If your business operations require frequent bank visits or if you travel widely and rely on accessible ATMs, choose a bank that aligns with these needs.

4.   Fees and Charges

The cumulative impact of banking fees, even those that seem small, can be significant over time. Selecting a bank that minimizes fees on business accounts and maximizes the availability of free transactions and services is advisable.

Important fees to compare among banks include ATM usage fees, transaction fees, maintenance fees, and monthly service charges.

5.   Incentives for Businesses

Banks and credit unions often provide benefits and incentives to attract business account holders. For example, startups might receive a cash bonus for opening a new business checking account, or banks might eliminate minimum deposit requirements for business savings accounts.

Other incentives to consider include:

  • Unlimited free transactions
  • High interest rates on savings and money market accounts
  • No-fee business checking accounts
  • Complimentary online bill payment
  • Competitive interest rates on business credit cards
  • No annual fees on business debit cards
  • Complimentary cash deposits
  • Unlimited free check deposits
  • Free use of ATMs
  • No minimum balance requirements
  • ATM fee reimbursements while using machines from other banks

6.   Integration Options

While benefits like low fees and free accounts are important, don’t overlook essential operational services such as payroll management. Payroll can become complex as your business expands.

Choose a bank that offers comprehensive payroll services, including direct deposit payments to employees, payroll tax filing, and HR task management. These services help simplify the complexities associated with growing business operations.

7.   Support Options

When selecting a bank for your business, consider the support and expertise available. Many banks offer dedicated staff to assist in managing and developing your business. These specialists can guide managing finances, funding expansion, and handling operations such as taxes and payroll.

As you evaluate your banking options, consider not only your current needs but also the potential future demands as your business expands. Access to knowledgeable bank staff who understand your business and its financial background can be invaluable. While you can hire external consultants, having access to advice from someone within the bank who is already familiar with your account details and business history can be extremely beneficial.

How to Open a Business Checking Account?

To open a business checking account, you can visit a bank branch, call, use the bank’s website, or access mobile banking services. However, keep in mind that not all banks offer all these methods.

You may also have the opportunity to establish additional accounts, such as a business savings account, a business credit card account, or a merchant services account, which allows you to process credit and debit card payments from customers.

Before opening your account, decide on the location and method, then collect all necessary information to provide to a bank representative or enter it through an online application. Be aware that the bank may perform a credit check when you apply for a business checking account.

Choosing the right business bank account depends on your specific business needs. Still, all accounts should meet basic functions like receiving customer payments, handling payroll, and managing costs to suppliers and other business partners.

Top Banks for Small Businesses in 2024

Based on extensive research and key factors for opening a business bank account, we have selected our top choice for 2024:

1. Axos Bank

Pros

  • No monthly fees or initial deposit is required.
  • Unlimited transactions without fees and no charge for incoming wires.Provides unlimited reimbursements for domestic ATM fees.
  • Customer support is available 24/7.
  • A welcome bonus is available for new customers (subject to terms).
  • Offers integration with QuickBooks to simplify business management.

Cons

  • Depositing cash may be challenging for business owners.
  • Bonuses are only available for accounts with an average daily balance of $25,000 or more.
  • Does not offer interest on account balances.
Axos Bank

Image source

Axos Bank offers various checking accounts suitable for different types of businesses, making it a top choice for small businesses. You can easily get interest rates up to 1.01% APY for balances under $50,000 with a Business Interest Checking account, which requires no monthly fee with a minimum balance of $5,000. This account allows up to 100 monthly free transactions and 60 remote deposit items. The Axos Bank Basic Business Checking account also eliminates the monthly fee regardless of the balance. It offers unlimited transactions and ATM reimbursements, ideal for newer businesses or those with frequent banking activities.

The bank also provides several savings products, including the Axos Bank Business Savings, Business Money Market Account, Non-Profit Money Market Account, and Business Certificate of Deposit. However, these savings options typically offer a maximum yield of 0.20% APY, which is relatively low compared to other online banks. Axos Bank may be a good option for those seeking a business checking account. However, other institutions might offer better options if your priority is a savings account or certificate of deposit with higher returns.

2. Chase

Pros

  • No charge for credit card payment processing via the mobile app
  • Unlimited electronic transactionsSelf-managed escrow services are available
  • The mobile app has received high ratingsBanking fees waived for military members.

Cons

  • Limited to 20 paper transactions per month
  • Does not reimburse fees for using ATMs outside its network
  • Checking accounts do not accrue interest
Chase bank

Image source

As the largest bank in the US by assets, Chase Bank offers a range of banking products and services tailored to support small businesses. Chase is an appealing option for both well-established companies and those just starting out. Operating under the broader umbrella of J.P. Morgan Chase and headquartered in New York City, Chase Bank commands over $2.6 trillion in assets and maintains a global presence. It boasts a network of 15,000 ATMs and more than 4,700 branches.

The bank’s extensive resources offer significant advantages to small business owners, including substantial rewards, account bonuses, and the convenience of physical branches across North America for face-to-face services. Additionally, Chase provides other financial products such as small business loans, credit cards, and savings accounts.

Chase Bank offers various checking account options designed to meet the diverse needs of different businesses. The Business Complete Banking℠ account charges a monthly fee of $15, which can be waived under certain conditions. It allows unlimited electronic transactions and includes 20 free paper transactions monthly. The cash deposit limit is $5,000 per month without fees, and after that, a fee of $2.50 per $1,000 deposited applies. Incoming wire transfers are free, while outgoing transfers incur a $35 fee.

The Performance Business Checking® account has a monthly fee of $30, which is also waivable. This account offers unlimited electronic deposits and up to 250 free transactions monthly. The free monthly cash deposit limit is set at $20,000; deposits exceeding this amount are charged at $2.50 per $1,000. The wire transfer policy includes no fees for incoming transfers and allows for two free outgoing transfers per month, with each subsequent transfer costing $35.

Lastly, the Platinum Business Checking℠ account features a higher monthly fee of $95, which can be waived under specific conditions. It includes unlimited electronic deposits and up to 500 free transactions each month. The account allows up to $25,000 in cash deposits each month free of charge, with additional deposits incurring a fee of $2.50 per $1,000. Wire transfers are free for incoming, and the first four outgoing transfers each month are also free, with a $35 fee applying to further outgoing transfers.

3. Capital One

Pros

  • Unlimited transactions without fees.
  • Comprehensive range of business services, such as credit cards and loans.
  • Access to 70,000 ATMs without fees, including those in the Capital One, Allpoint, and MoneyPass networks.

Cons

  • No options for free business checking accounts.
  • Restricted service areas; applications must be made in person.
  • Monthly free cash deposit limit of $5,000.
Capital One

Image source

Capital One provides two types of business checking accounts. The Basic account features include unlimited electronic deposits, mobile and online banking access, and a low minimum balance to waive fees.

The Unlimited business account combines the benefits of two Basic accounts and suits businesses with more complex financial needs. Additionally, Capital One offers various business credit cards with cash back or travel rewards, which are ideal for international travel due to the absence of foreign transaction fees. The bank is known for its responsive and well-informed customer service.

It’s important to note that the small business account is limited to particular states and requires an in-branch application.

Capital One’s services and fee structures are competitive compared to other major banks. It also provides a vast ATM network, which is convenient for customers who prefer banking in person. The network includes over 70,000 Allpoint and MoneyPass ATMs nationwide, accessible without fees. While Capital One’s checking accounts do not offer an Annual Percentage Yield (APY), opening a savings account can provide an interest rate of 0.2%. Capital One also offers small business loans and LOCs, but only to customers with a checking account, with credit lines up to $5 million.

Capital One’s Basic Checking account has a monthly fee of $15, which is higher than American Express, which does not charge a maintenance fee. This fee is waived if the balance exceeds $2,000. The account allows up to $5,000 in free cash deposits per month and charges standard fees for wire transfers. The Unlimited Checking account has a $35 monthly fee, waived if the balance is $25,000 or more. This account allows unlimited free cash deposits and does not charge for incoming wires. Customers can also make up to five free outgoing wire transfers each month.

4. Bluevine

Pros

  • Account balances up to $250,000 earn an interest of 2.00%; conditions apply.
  • There are no monthly fees or requirements for a minimum opening deposit.
  • Account holders can access up to $3 million in FDIC insurance through the Insured Cash Sweep service.
  • The account offers unlimited transactions without any fees and does not charge for overdrafts.
  • Incoming wires are free, and the fees for outgoing wire transfers are low.
  • There are no fees for using MoneyPass ATMs.

Cons

  • There is a fee for cash deposits.
  • Fees apply when using ATMs outside of the network.
  • The service does not support joint accounts.
Bluevine

Image source

Unlike most traditional accounts, Bluevine, a fintech lender, offers small business checking accounts that earn interest. This service is particularly beneficial if you’re considering a LOC, as your banking history with Bluevine could improve your chances of approval. In 2020, Bluevine partnered with banks to provide these accounts, utilizing sweep accounts to offer up to $3 million in FDIC coverage through various partner banks.

Bluevine operates digitally, allowing unlimited transactions while enforcing limits on monthly deposits and withdrawals. The company does not charge fees for ACH transactions, overdrafts, incoming wire transfers, or ATM use within its network. Additionally, Bluevine offers a 1.5% annual percentage yield (APY) on balances up to $100,000 under certain conditions. Balances up to $250,000 can earn 2.00% APY if you spend $500 monthly using the BlueVine Business Debit Mastercard or receive $2,500 in customer payments.

Clients receive two free checkbooks annually and can manage their finances with up to five subaccounts. The checking account includes features like unlimited transactions, overdraft protection, and QuickBooks integration without a monthly fee. BlueVine customers have access to 37,000 surcharge-free ATMs and 90,000 retail locations for cash deposits.

5. Bank of America

Pros

  • Comprehensive business banking options that combine checking and savings accounts.
  • The choice between two tiers of business banking accounts.
  • Digital resources such as Cash Flow Monitor and Erica assist in monitoring expenditures.
  • Access to specialized support from small business experts.

Cons

  • Customer service is not available 24 hours a day.
  • A limited number of ATMs compared to some competitors.
  • Charges monthly fees for account maintenance.
Bank of America

Image source

Bank of America is a major financial institution that offers banking products and wealth management services to individuals, businesses, corporations, and governments. It operates branches across most US states and provides access to 16,000 ATMs for free. The bank also supports online banking and a mobile application, which holds a rating of over four stars on both the App Store and Google Play.

Bank of America is recognized for its provision of unlimited electronic transactions, high cash deposit limits, and multiple account opening methods.

The Bank of America Business Advantage Fundamentals Banking account allows for up to $7,500 in cash deposits each month without a fee and includes business and employee debit cards. Features such as the Cash Flow Monitor help users with cash flow projections, transaction monitoring, and balance tracking. Access to dedicated small business specialists is also provided.

To avoid the $16 monthly service fee, customers can maintain a $5,000 combined average monthly balance or make at least $250 in new qualified debit card purchases monthly.

6. US Bank

Pros

  • The Silver Business Checking account does not require a monthly service fee.
  • New customers can receive a welcome bonus, subject to specific conditions.
  • Customers can use 4,700 U.S. Bank ATMs without incurring fees and have access to 2,900 bank branches.
  • Accounts overdrawn by $50 or less are not subject to overdraft fees.

Cons

  • There are restrictions on the amount of cash that can be deposited.
  • The bank’s website has complex information regarding terms and fees.
  • There is a cap of 125 transactions per month without fees.
  • There is a $1 charge for each outgoing domestic ACH transfer.
US Bank

Image source

US Bank is distinguished among large banks for its free business checking option. The Silver Business Checking account is free of monthly maintenance fees and minimum balance requirements. It is ideal for businesses with a relatively small number of monthly transactions, such as a contractor with a primary client. US Bank operates over 2,000 branches, mainly on the West Coast, catering to small, regional businesses that value in-person banking and tailored support.

As businesses expand, US Bank provides various services, such as payment processing solutions, SBA loans, payroll support, and cash management services.

US Bank provides three tiers of checking accounts. The Platinum package, costing $30 monthly, allows 500 transactions, with each additional transaction priced at $0.40. The Gold package includes 300 monthly transactions for a $20 fee, with each extra transaction costing $0.45. The Silver Business Checking Account allows 125 free monthly transactions, with additional transactions costing $0.50 each. In comparison, some competitors like Bluevine do not charge transaction fees, which could make US Bank’s fees appear steep.

The bank provides a variety of borrowing options, including business credit cards, lines of credit, and various loans. Its business credit cards offer advantages such as no annual fees, cash back, rewards programs, and competitive interest rates. Additionally, the bank’s selection of small business loans is tailored to accommodate a range of business needs, with loan amounts up to $250,000 available through Quick Online loans and up to $12.375 million for government-backed loans.

7. Lili

Pros

  • Lili does not require monthly fees, a minimum balance, or a minimum opening deposit.
  • There is no limit on the number of transactions without fees.
  • Customers have free access to any MoneyPass ATM.
  • Cash can be deposited through the Green Dot Network.
  • Lili offers tools for managing business expenses and tax planning.
  • Direct deposit with Lili allows for early access to funds, potentially two days earlier than usual.

Cons

  • Lili lacks advanced business features, such as third-party integrations, provision of multiple debit cards, and options for joint accounts.
  • ATMs outside the network are charged $2.50, and international ATM use is charged $5.
  • Lili does not offer paper checks.
Lili

Image source

Lili Premium Business Banking offers free overdraft protection up to $200 and includes a Metal Visa Business Pro debit card that earns cash-back rewards. This card can be used at over 38,000 in-network ATMs across the nation. Account holders benefit from dedicated account specialists and priority customer support.

The service features Smart Bookkeeping, which allows you to attach expense receipts and organize finances for easier tax preparation and offers tools for creating on-demand profit and loss and cash flow statements. Additionally, you can instantly accept payments, create and send invoices and manage business income taxes.

Lili is a digital bank ideal for small businesses that primarily operate electronically and rarely handle cash or checks. The Lili business checking account has a Visa debit card, which is widely accepted and secured against unauthorized charges. Lili also provides a comprehensive suite of services, including banking, accounting, invoicing, and tax preparation. The bank offers four account tiers, with the first basic level being free and higher tiers priced between $15 and $55 per month, offering more advanced features.

With low or no fees on ACH transactions, ATM use, foreign transactions, incoming domestic wire transfers, and no minimum balance requirement, Lili is a cost-effective choice for sole proprietors and owner-operators in information-centric businesses. However, companies that handle a lot of cash might find the account less accommodating. Other benefits include a $0 minimum deposit requirement, the ability to transfer excess funds to a savings account, and the opportunity to earn 2% APY on those savings.

8. American Express

Pros

  • There are no monthly maintenance fees.
  • Accounts with balances up to $500,000 earn an annual percentage yield (APY) of 1.30%.
  • Users earn Membership Rewards® points with business debit card purchases.
  • Regular welcome offers are available.
  • Customer support is available 24/7.

Cons

  • Cash deposits are not accepted.
  • There are no physical branch locations.
American Express

Image source

American Express Business Checking responds to current business banking needs by offering a fee-free service and not requiring a minimum balance in its standard business checking account. The account supports unlimited transactions.

American Express has integrated with Kabbage, enhancing its offerings with ready access to Kabbage’s financial products. This integration positions American Express Business Checking as an attractive option for business owners seeking banking solutions and LOCs. It provides easy approval for small business LOCs up to $250,000 through Kabbage Funding.

American Express Business Checking is tailored to suit businesses’ specific requirements. It incorporates advanced fraud protection measures to protect against unauthorized activities and ensure financial security.

This account offers no monthly fees, no minimum balance requirements, and unlimited transactions; plus, it is an interest-bearing account with a 1.30% APY. Users of the Business Debit Card can earn membership rewards points that may be redeemed directly or transferred to travel partners like Delta Air Lines, Hilton, and Marriott. Additionally, American Express customers can access over 70,000 ATMs nationwide via Allpoint and MoneyPass networks.

Conclusion

Selecting the best bank for your small business in 2024 depends on various factors, including your specific needs and priorities. Whether you prioritize low fees, comprehensive online services, or access to physical branches, options like Axos Bank, Chase, Capital One, Bluevine, Bank of America, US Bank, Lili, and American Express offer diverse features to meet these needs. By evaluating the pros and cons of each bank, you can find the one that aligns with your business goals and operational requirements.

A well-chosen bank can simplify financial management, support business growth, and provide valuable resources and incentives to enhance your business operations.

Frequently Asked Questions

  1. What should I consider when choosing a bank for my small business?

    When choosing a bank, consider these factors: available online and in-person services, fees for account maintenance and transactions, business-friendly features like high transaction limits and mobile apps, and the quality of customer support and financial expertise offered.

  2. How do I open a business checking account?

    To open a business checking account, choose a bank, gather necessary documents like your business license and EIN, apply online or at a branch, and review the account’s terms and fees before finalizing.

  3. Are there any benefits to opening a business account at a bank rather than using personal accounts for business transactions?

    Yes, benefits include enhanced professionalism, easier financial management, improved credit opportunities, and access to services tailored to business needs, like higher transaction limits and merchant services.

  4. Can I switch my business banking to another bank if I am dissatisfied with my current bank?

    Yes, you can switch banks. Research and select a new bank, open a new business account, transfer funds, update automatic payments, and close your old account once all transactions are settled.

Share This Post

Save Time, Money, & Resources

Categories: Latest News, Banks, Business, Small Business

Get Started

Ready for the ultimate credit card processing experience? Fill out this form!

Contact HMS

Ready for the ultimate credit card processing experience? Ask us your questions here.