Banking

The 9 best free business checking accounts

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.

The best free business checking accounts of 2021

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.

PFI Banking Expert Panel (updated 2021)



Insider


We’re focusing on what will make a business checking account the most useful, including low fees, transaction limits, branch locations, and more.

Annual Percentage Yield (APY)

None

  • Pros & Cons
  • Details

  • Pros
    • No monthly service fees
    • 200 transactions per month
    • Unlimited refunds on domestic out-of-network ATM fees
    • You may qualify for a $100 bonus
    • Compatible with QuickBooks
    • Free incoming and outgoing domestic wire transfers
    Cons
    • No physical branches
    • $1,000 minimum opening deposit
    • $0.30 fee for each transaction after the first 200 per month
    • $7 to $15 fee for outgoing domestic wire transfers
    • $50 international outgoing wire transfer fee
    • No way to deposit cash
    • Make 200 transactions (credits, debits, or deposits) per month, then pay $0.30 per transaction
    • Receive a $100 sign-up bonus if you incorporated after June 1, 2020, and use the code NEWBIZ100 when you apply
    • FDIC insured

    Why it stands out: You can make up to 200 transactions per month before incurring a $0.30 fee per transaction. Axos has a large ATM network, but if you use an out-of-network machine, Axos refunds all fees charged by an ATM provider.

    You’ll receive a $100 sign-up bonus if you started your business after June 1, 2020.

    What to look out for: Minimum opening deposit. You must have at least $1,000 to get started.

    Annual Percentage Yield (APY)

    None

  • Pros & Cons
  • Details

  • Pros
    • $100 minimum opening deposit
    • No monthly service fees
    • 250 transactions per month
    Cons
    • Limited branch locations
    • $0.50 fee per transaction after 250 monthly limit
    • $1 out-of-network ATM fee
    • $10 to $15 outgoing domestic wire transfer fee
    • $5 incoming domestic wire transfer fee
    • $35 international wire transfer fee
    • Around 240 locations in 8 US states: AL, AR, FL, GA, NY, NC, SC, and TX
    • 250 transactions per month, then $0.50 per transaction
    • FDIC insured

    Why it stands out: You can make up to 250 transactions per month with Bank OZK, and its minimum opening deposit of $100 is relatively low. It does charge a fee if you use an out-of-network ATM — but it’s only $1, which is less than what many banks charge.

    What to look out for: Branch locations. Bank OZK (previously Bank of the Ozarks) is a good option if you live near a branch and want a brick-and-mortar experience, but it only has locations in eight US states.

    Annual Percentage Yield (APY)

    1% APY

  • Pros & Cons
  • Details

  • Pros
    • No minimum opening balance
    • No monthly service fees
    • Unlimited monthly transactions
    • Earn competitive interest rate on balances up to $100,000
    • No non-sufficient funds fees
    • No out-of-network ATM fees
    • No incoming wire transfer fees
    • Ability to deposit cash
    Cons
    • No physical branches
    • No interest earned on balances over $100,000
    • Doesn’t reimburse any fees charged by out-of-network ATMs
    • $4.95 fee for cash deposits at Green Dot locations
    • $15 outgoing wire transfer fee
    • Earn interest on balances up to $100,000
    • Unlimited monthly withdrawals and deposits
    • FDIC Insured by partner bank, The Bancorp Bank

    Why it stands out: BlueVine doesn’t require an opening deposit, and it doesn’t restrict how many transactions you can make each month. You’ll earn 1% APY on balances up to $100,000. This sets the account apart from the others on our list, which don’t pay interest at all. It is also one of the few online business checking accounts that gives you a way to deposit cash.

    What to look out for: Interest. You won’t earn any interest on balances over $100,000.

    Annual Percentage Yield (APY)

    None

  • Pros & Cons
  • Details

  • Pros
    • No minimum opening deposit
    • No monthly service fees
    • Unlimited monthly transactions
    • Money management tools
    • Earn credit card rewards and exchange them for gift cards, cash back, travel, or switch points to miles
    • Receive discounts with partner businesses
    • No foreign transaction fees
    • No incoming, outgoing, domestic, or international wire transfer fees
    Cons
    • No physical branches
    • No debit card, only credit card
    • No way to deposit cash
    • 50,000 signup bonus points after spending $9,000+ in the first 30 days
    • Brex’s business account is called Brex Cash. It’s a cash management account that works much like a business bank account for secure deposits, payments, tracking, and built-in expense management to understand your spending. It also comes with a credit card that’s automatically paid daily, like a debit card, except that it builds your business credit and gives you reward points on every purchase: 8x on rideshare, 5x on Brex Travel, 4x on restaurants/food delivery, 3x on Apple products, 3x on recurring software, and 1x on everything else
    • No fees to send unlimited ACH, wires, and checks-even internationally
    • The Brex Cash account and card are for all business types
    • Brex Mastercard® issued by Emigrant Bank, Member FDIC. Brex Cash provided by Brex Treasury LLC, member FINRA and SIPC. Brex Treasury is not a bank; Brex Cash is not a bank account. Testimonials may not represent experiences of all clients. Terms apply, visit brex.com.

    Why it stands out: You don’t need a minimum deposit to open this account, and you can make unlimited monthly transactions. Your Brex credit card earns cash back on everything, and up to 8x cash back on purchases like ridesharing. You’ll also receive discounts at various companies. Brex doesn’t charge any wire transfer fees, regardless of whether it’s for an incoming, outgoing, domestic, or international transfer.

    What to look out for: No debit card. Brex is a great option if you want a rewards credit card. But if you want a debit card, you’ll want to look at some of our other top picks.

    Annual Percentage Yield (APY)

    None

  • Pros & Cons
  • Details

  • Pros
    • No minimum opening deposit
    • No monthly service fees
    • 200 transactions per month
    • Overdraft savings transfer and overdraft line of credit
    Cons
    • $0.50 fee per transaction after monthly 200 limit
    • $3 out-of-network ATM fee
    • No free incoming or outgoing wire transfer fees
    • Over 1,100 branches in 12 US states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, VT, and VA
    • Over 3,100 ATMs
    • 200 free monthly deposits and withdrawals; after that, $0.50 per transaction
    • FDIC insured

    Why it stands out: You don’t need any money to open this account, and you can make 200 free transactions each month. Citizens Bank gives you two overdraft protection options: Either transfer money from savings or tap into a line of credit.

    What to look out for: Out-of-network ATM fee. You’ll pay $3 each time you use a non-Citizens Bank ATM, plus any fee charged by the ATM provider. Citizens Bank only has branches in 12 states, so this could be a problem if you frequently travel to other parts of the US.

    Annual Percentage Yield (APY)

    None

  • Pros & Cons
  • Details

  • Pros
    • $100 minimum opening deposit
    • No monthly service fees
    • 175 transactions per month
    • $5,000 in money or coin deposits per month
    • No out-of-network ATM fees
    Cons
    • $0.50 fee for each monthly transaction exceeding the 175 limit
    • $0.20 fee per $100 cash deposited exceeding the monthly $5,000 limit
    • Doesn’t reimburse any fees charged by out-of-network ATM providers
    • No free incoming or outgoing wire transfer fees
    • Branches and ATMs in 19 US states: AZ, CA, CO, FL, GA, KS, MD, MO, NM, NC, OK, OR, SC, TN, TX, VA, WA, WI, WV
    • Make 175 free transactions per month, then pay $0.50 per transaction
    • Deposit $5,000 in cash per month, then pay $0.20 per $100
    • FDIC insured

    Why it stands out: The $100 minimum opening deposit is relatively low, and you can make up to 175 free transactions per month. First Citizens Bank has a large presence in the US with branches in 19 states.

    What to look out for: Transaction limit. Although 175 free monthly transactions is pretty good, the number isn’t quite as high as what our other top picks allow. Really consider how many transactions you’ll need to make each month before you choose a business checking account.

    Annual Percentage Yield (APY)

    None

  • Pros & Cons
  • Details

  • Pros
    • $100 minimum opening deposit
    • No monthly service fees
    • 500 free transactions per month
    • Deposit up to $10,000 in cash per month
    • No fees for exceeding limits
    • By opening this account, you qualify to waive monthly fees on 2 personal Iberia checking accounts
    Cons
    • If you exceed transaction or deposit limits 2 months in a row, your account is converted into a Business Checking Plus account
    • $2 out-of-network ATM fee
    • No free incoming our outgoing wire transfers
    • Branches and ATMs in 10 US states: AL, AR, FL, GA, LA, NY, NC, SC, TN, and TX
    • No fees if you exceed the monthly limits of 500 transactions and $10,000 in cash deposits
    • If you exceed limits 2 months in a row, your account will be converted to a Business Checking Plus account, which does charge fees when you exceed the limits
    • FDIC insured

    Why it stands out: You can make 500 transactions and deposit up to $10,000 in cash for free each month. There’s no fee for exceeding these limits. By opening this business checking account, you’re eligible to waive monthly service fees on two personal checking accounts with Iberia.

    What to look out for: Transaction and deposit limits. You’re permitted to 500 free transactions and $10,000 in cash deposits per statement cycle. But if you exceed either limit two months in a row, Iberia converts your account to a Business Checking Plus account. Once you’ve converted to this account, you’ll pay $0.50 per transaction that goes over the 500 limit and $2 per $1,000 that goes over the $10,000 limit.

    Annual Percentage Yield (APY)

    None

  • Pros & Cons
  • Details

  • Pros
    • No minimum opening deposit
    • No monthly service fees
    • Unlimited free monthly transactions
    • No overdraft or nonsufficient funds fees
    • No incoming domestic wire transfer fees
    • Refunds up to $12 per month in fees charged by out-of-network ATMs
    • Deposit cash at ATMs
    Cons
    • Only physical branch locations are in Kansas City, MO
    • $5 outgoing wire transfer fee
    • $45 incoming international wire transfer fee
    • Online bank with branches in Kansas City, MO
    • 34,000+ free ATMs in the MoneyPass network
    • No out-of-network ATM fees; if an ATM provider charges you, NBKC reimburses up to $12 per month
    • FDIC insured

    Why it stands out: This account gives you a lot of freedom. There’s no minimum opening deposit, transaction limits, monthly service fees, incoming wire transfer fees, or overdraft fees. If you use a non-MoneyPass ATM and the ATM provider charges a fee, NBKC reimburses you up to $12 per month.

    What to look out for: Branches. This is primarily an online account, but there are branches in Kansas City, Missouri. So if you want in-person banking, you’ll need to look elsewhere unless you live in Kansas City.

    Annual Percentage Yield (APY)

    None

  • Pros & Cons
  • Details

  • Pros
    • $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
    Cons
    • 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:

    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:

    Most of the companies on our list have received strong scores from the BBB. The exceptions are Bank OZK and Novo.

    The Bank OZK’s grade can be attributed to the fact that it hasn’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 customers 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?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:

    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.”

     Source link

    Back to top button