Can You Get a Free Business Checking Account?

If your business involves a lot of cash sales, you’ll probably need a brick-and-mortar bank to make deposits. Photo: nichole.c

If your small business is closely watching a tight bottom line, you’ll be happy to know that free business checking accounts are out there, whether you’d prefer to bank online or at a real brick-and-mortar branch in your area.

However, to find them, you may need to do some digging — free business checking is far more common at smaller banks and credit unions than at any of the nation’s biggest banks. There are also a few free small-business checking options with online-only banks. And even if you don’t find a truly free business checking option, your bank may waive the monthly fee if you maintain a certain balance in the account or meet other criteria.

Free business checking at big banks

Big banks such as Chase and Wells Fargo, with their massive networks of branches and ATMs, are seductively convenient. They offer a full range of services, meaning even larger companies can keep all of their business in one spot. Online banking tools and resources are typically polished, too.

As I mentioned above, however, free business checking isn’t an option at the nation’s biggest banks. You may also find it harder to build a meaningful banking relationship at a bigger bank — after all, behemoths don’t have to work quite as hard to keep your business.

Here is a comparison of the base-level Chase business checking account, Wells Fargo business checking account, and Bank of America business checking account. These accounts are designed for small businesses, but each bank has account options for bigger businesses with more transactions and cash deposits.

	Chase	Wells Fargo	Bank of America
Monthly account maintenance fee	$10-$12; waived with a daily average balance of at least $1,500	$14, waived with a monthly average balance of at least $7,500	$15, waived with a monthly average balance of at least $5,000
No-fee transaction limit	200	200	200
No-fee cash deposit limit	$7,500	$7,500	$10,000

 

As you can see, your options are fairly similar. Chase business checking has the lowest minimum balance for getting your monthly fee waived. Bank of America business checking allows a slightly more generous $10,000 in cash deposits, but the monthly fee is a bit higher if you don’t meet requirements to waive it.

Note that there are often ways to avoid paying the monthly fee other than maintaining a certain minimum balance. For instance, Wells Fargo business checking also waives the fee if you make more than 10 purchases with your business debit card each statement period or set up payroll transactions with the account.

Free business checking at local banks and credit unions

Smaller local banks and credit unions are more likely to have free business checking options than larger banks. You may also find lower (or no) account minimums and more flexible allowances for transactions and cash deposits.

Another potential benefit of keeping your business local is the ability to build more of a personal relationship with your bank. Facetime can humanize you and your business, reminding your bank that you are more than your account balance. This can come in particularly handy if you ever have any banking problems. It may also boost your chances of landing a much-needed loan to grow your business one day.

Of course, there are a few downsides to staying local. Some smaller banks don’t offer the range of products and services that their giant competitors have. You may also find less-polished (or nonexistent) online tools, and you won’t have the convenience of an ATM network with national reach.

Of course, offerings will vary depending on your location, but it wasn’t hard for me to find several free business checking options close to me in Knoxville, Tenn. One local bank, Clayton Bank and Trust, offers free small business checking with a low $100 minimum deposit and a 200-transaction monthly limit. Even better, SmartBank’s free business checking option allows 1,000 transactions and $10,000 in cash deposits before fees kick in.

A local credit union, Y-12, offers a basic business checking option for very small business with a lot of free features, including a check card, online banking, incoming wires, and bill pay. Transactions are capped at 50, but the fee for going over that number is reasonable, at 15 cents per item.

Free business checking online

Online banks are always open, and that’s a wonderful convenience for a small-business owner. Lack of overhead even means lower (or no) fees, and you might even be able to find a business checking account that earns interest.

The main downside with most online banks for businesses will be that you’re usually not allowed to deposit cash. If your small business conducts a lot of cash transactions, you’ll almost certainly need to use a traditional bank in your area. ATM access may also be an issue — be sure your online bank either waives ATM fees or allows fee-free access to a national network.

One of your best free business checking options online is No Bull Checking from SmallBusinessBank.com. SBB is an offshoot of Gardner Bank, based in Kansas City. Like most other banks that offer free business checking, SBB doesn’t charge monthly maintenance fees or require a minimum balance to avoid them.

You also get all of the following without shelling out a dime: unlimited transactions, checks, a business debit card, online bill pay, exports to Quicken and QuickBooks, and mobile deposit. The minimum deposit is a low $100.

If you have a little more cash on hand, EverBank also offers free small business checking. The account requires $1,500 to open, but you get a nice return on your money — anywhere from 0.85% to 1.01% APY, with a six-month introductory rate of 1.40%.

Two computer-scanner options allow business to deposit a high volume of checks right from the office, but there’s also free mobile and mail deposit. Everbank also offers a business money market account, a business CD, and a business credit card with a rewards program.

BofI Federal Bank also offers a free business checking account with no maintenance fee — and no account minimum needed to avoid one. You get 200 free transactions per month, a nationwide ATM network, and free bill pay, online banking, and image statements. There is a $1,000 minimum initial deposit, however. Also under BofI’s umbrella is Bank of Internet USA, a well-regarded online-only bank that focuses on personal banking.

What to look for in a business checking account

Remember to evaluate business checking accounts in the context of your particular business. If you’re a business of one who conducts business entirely online, your needs will be very different from those of a local mom-and-pop diner with a dozen employees and lots of cash deposits.

• Ability to waive fees: If your bank charges a monthly maintenance fee, they may waive it if you maintain a certain balance in your account. However, that balance may have to be fairly substantial, particularly at bigger banks.
• Access to ATMs: If easy access to ATMs is a big priority, you’ll want to focus on bigger banks with extensive ATM networks. Alternatively, some online banks will reimburse your ATM fees, but that might be an extra step you’d rather not take.
• Cash deposit limits: Many online banks don’t allow cash deposits at all, and other banks will limit such deposits. For instance, you may only be able to deposit up to $10,000 in cash per statement cycle without incurring fees. Credit unions have looser limits and may be a better bet for cash-heavy businesses.
• Transaction limits: Business checking accounts are typically subject to a cap on how many transactions you can conduct per month. Limits often range from 100 to 500 transactions. Exceed the limit and you’ll pay a fee on each additional transaction.
• Potential for a positive banking relationship: If you’re hoping to grow your small business, consider how your bank can help. Small business loans can be notoriously hard to land, and forming a relationship with a bank — so they see your business as more than a number — can ease the process. Such a relationship will probably require person-to-person facetime that you have a better chance of getting at a smaller community bank or credit union.
• Ability to bank online: Though it’s easy to assume you’ll be able to perform basic transactions online, smaller local banks and credit unions may not offer free online banking. Further, the usability of online tools can vary widely, with bigger banks and online banks typically offering better, more user-friendly tools.

Free business checking exists in many forms

While you’ll find most of your free business checking account options locally, a handful also exist online. You can even swing free business checking with the big banks as long as you meet their requirements for a fee waiver, often by maintaining a minimum balance.

If you’re a sole proprietor with a very small business, you may simply want to use a regular personal business checking account for business purposes. It’s much easier to avoid fees with personal accounts, and some banks offer sub accounts that make it easy to keep your business funds separate. Check out The Simple Dollar’s guide to the Best Free Checking Accounts for some great options.

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