Why Do You Need To Open a Business Checking Account?
- Legal Protection: When you set up an LLC or a corporation, you have legal liability protection as the business is considered to be a separate entity from you, the owner. If the business gets sued, the party suing cannot sue you as an individual or your personal assets. But, if you co-mingled your business transactions in personal bank accounts, your personal assets could be at risk. Bottom line: keep your personal bank accounts separate from your business bank accounts.
- Tax & Bookkeeping: Using a separate business bank account makes it easier to file your taxes because your business income and expenses will be in one place. Don’t just throw your receipts into a box and try to figure it out a year later!
- Credibility: Having a business bank account also adds a note of professionalism to your company. When you make a business payment, you don’t want to use a personal check. Likewise, clients write checks to your personal name may not take you as seriously as you want. Business checking accounts convey professionalism, credibility, and confidence.
Every decision you make impacts your bottom line and it’s not easy to find a free business checking account. All of the big banks charge high fees and require a minimum balance. Here a few tips to help you find a free business bank account.
How to Find a Free Business Checking Account
- First, find a bank that offers FREE business checking with no minimum balance and no fee:
Bank of Internet
First Citizens Bank
Popular Community Bank
Ally – no business accounts
Capital One Spark – minimum balances & fees
Chase, Citi, Bank of America, Wells Fargo – minimum balances & fees
USAA – no business accounts
2. Next, look at the banks’ mobile app ratings and reviews:
Bank of Internet– 4.5/5 stars, 688 reviews
BBVA Compass– 4.3, 4,973 reviews
Citizens Bank– 4.1 stars, 14,617 reviews, recent reviews say that app updates have caused functionality problems
First Citizens Bank– 2.8 stars, 2,358 reviews,
Iberia Bank– 3.6 stars, 455 reviews, check deposit & log in issues
Popular Community Bank- 3.3 stars, 905 reviews, recent reviews claiming this is the worst app and bank
3. Finally, are they connected to your bookkeeping software? I opened a business bank account at a credit union that I found out later does not connect to any software, so I had to find a new business bank account. Finding a bank that will allow transactions to be automatically imported will save you hours of time each month.
If you need special services like merchant services, cash processing, or have a high number of transactions, see if your bank of choice provides them at competitive rates.
I am choosing Bank of Internet for my business bank account. Their business savings account interest rate is quite high:
$0-$25,000 .80% APY
That is such a great interest rate for a no minimum business account! I am willing to try an internet-only bank account for the no fee, no minimum, great interest rate accounts.