Guide to Small Business Checking Accounts

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Small business owners have unique needs when it comes to their checking accounts. Here is a simple guide to understanding what features you need when it comes to small business checking accounts and exactly what you don't.

Getting started

The first step is to think about what you will need the account for. Paying lots of vendors by check daily? Make sure you don't get locked into an account with per-check fees. Unsure if you even want one? It's tempting as a sole proprietor to keep it simple, but most experts advise that even the smallest business keep lanes between personal and business money. Separate accounts is the first step toward doing that. It also makes paying your taxes a lot easier.

Here's what you should expect as a minimum level of service from a bank that wants your (small) business:

  • No monthly minimum balances. Running a small business can sometimes mean managing tight cash-flow margins. Getting dinged with a fee every time a balance falls short can really add up.
  • Swift availability of deposits. Small business owners typically get paid from multiple sources and in many different forms. You'll want a bank that will make deposits available to you in as short a time as possible.

Related >> Finding the Right Bank Account For You

Small business checking account promotions

Banks and credit unions will definitely compete for your business so it pays to shop around. Compare promotions among major national banks and local establishments — you might be surprised at what a local bank can offer in terms of other banking needs, such as loans and longer-term deposit accounts. Look also at some new entrants into the market as they may offer some unexpected extras, such as:

  • Interest. Rates are low, but if you typically carry a large checking balance, getting at least some interest is a must.
  • Free online invoicing and bill pay
  • Fee-free ATMs
  • Integration with software like Quicken
  • A small business customer team (if you feel like you'll need it)
  • Mobile banking
  • Fee waivers when used with your small business credit card

Related >> Small Business Administration's advice on business checking

Special considerations

Most small business owners are busy, so being able to open an account online is a major bonus. Unfortunately, not all businesses qualify for this convenience. According to the SBA, small businesses that deal with a lot of money transactions, such as checking cashing, must open an account in person.

DBA businesses, which stands for (doing business as). This means you might go by a trade name or a so-called fictitious name. In this case you might need a DBA certificate or some other documentation. Make sure you check with your bank.

Other factors

Don't forget to gather up the rest of the documents you need to open an account. These requirements will vary by state and possibly bank-to-bank. According to one national bank, the list includes:

  • Legal name
  • Address
  • Tax identification number

The bank or credit union may also ask for a copy of a business licenses or something similar. If you are a sole proprietor — such as a freelancer — they may also need your date of birth and photo ID.


More about...Banking

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