The best Business Banks of 2024

What is a business bank?

Definition

Business banking refers to banking transactions that are specific to business clients. These bank accounts help entrepreneurs and companies to stay legally compliant and protected, whilst providing loans, credit and bank accounts solely to business clients.

An update on the business banking market

For years, entrepreneurs and professionals had little choice. Indeed, the professional offer was offered only by traditional banks, often at very high prices. 

In recent years, things have changed, and new online professional banks and professional bank accounts have appeared on the U.S. market with offers specifically designed  for the needs of entrepreneurs.

Among the best known are Bluevine, Chase, Novo, Relay, Capital One, Brex and Bank of America. 

The advantage for entrepreneurs is that their rates are now much more affordable with tailor-made services per the needs of your business. 

Who are business banks for?

Business banks are aimed at companies, entrepreneurs, freelancers and professionals who have a need for banking services. This can include small and large business owners with banks offering different competing products and services that may be of most relevance to your business. 

Is it mandatory to have a business bank account?

Obligations can differ according to the company statutes

Having a business bank is not mandatory. However, it is important to remember that your obligations in terms of a business bank account may depend on your company status. 

The IRS recommends that all small business owners have separate bank accounts. Whilst a sole proprietor i.e. an individual who owns a business and is personally responsible for its debts is not legally required to use a business checking account, it’s still a good idea from a tax perspective.

Advantages of business accounts

Business banks mean customers benefit from:

• Protection: Company banking provides some measure of personal indemnification by separating your personal and business cash. This helps to reduce the damage that may be caused by personal responsibility claims.
• As a sign of your professionalism, you will accept credit card payments from customers and ask that they make checks payable to your company rather than directly to you. The owners of businesses have the ability to delegate staff to take care of day-to-day banking responsibilities on the company’s behalf.
• In the event that your firm need a credit line in the case of an emergency, the options for obtaining one are available to you.
• Buying power: Credit card profiles may assist your company in making substantial first purchases and assist in the establishment of a credit record for your company.

What services do business banks offer professionals?

Basic services

• You may make withdrawals and deposits.
• Write a check
• Handle payments sent via the automated clearing house (ACH).
• For financial operations pertaining to your company, you may use a debit card or an ATM card to make purchases and withdrawals of cash.

Additional services

This is where business banks differ from traditional bank accounts for individuals with various services including:

• Corporate cards: Take advantage of high-end business cards with high withdrawals and payments
• Virtual cards: Manage the limits and lifespan of these cards to pay securely on the internet. Facilitate the management of expense reports.
• Credit Card Readers: Get paid from your customers in-store or on the move, receiving the money directly to your account.
• Authorized overdraft facilities: This is crucial for some businesses with the overdraft working like short-term financing.
• Savings solutions: Make your cash flow grow with savings solutions dedicated to businesses.
• Financing solutions: Finance your activity in the short and long term thanks to different credit products and services.
• Online collection: Collect fees and dues from your customers directly online through the integration of payment links or electronic payment solutions.
• Invoicing software: Issue quotes and invoices directly from your professional bank account.
• Accounting access: Make accounting easier thanks to dedicated access to your accountant with formatted exports. 
• Expense report software: Easily manage expense reports by allowing your employees to send receipts directly.
• International transfers: Pay and get paid abroad if your business activities require it.

What exactly is the distinction between business banking & commercial banking?

The majority of financial institutions are organized into commercial and corporate departments. The majority of clients of a commercial bank are people and proprietors of small businesses, as opposed to huge organizations, which is one of the key differences between commercial and corporate banking.

Merchant services, business loans, international trade services, and treasury services are examples of the types of services that are offered by commercial banks. They provide checking and savings accounts, much like traditional retail banks.

Corporate banking is indeed a specialist sector of a business bank that provides big, small, and medium-sized firms with loans, cash, and asset management, as well as business insurance.

Banking on corporations often results in greater earnings for the financial institution because of the significant amounts of funds and interest that are associated with corporate loans.

Although the two divisions’ services may sometimes overlap in certain respects, the primary distinction between them lies in the types of customers served by each and the revenues they generate.

How much does a business bank account cost?

Do free business bank accounts exist?

Some professional bank accounts are still advertised as “free”. In reality, some costs are effectively free, but others are chargeable, and/or limited. 

Business banks are never 100% free as banks have to make money in some way to cover their costs. However, many business bank accounts do not charge an annual or monthly fee. 

They may charge fees for some services including wire transfers, or in certain events, such as overdrafting or if transaction limits are reached. 

Here is the list of fees offered most of the time in a “free” business bank account:

• Opening fees
• Management fees (no monthly subscription)
• Bank card (most of the time)
• Access to online banking and/or mobile banking
• Transfers sent to certain destinations
• Permanent transfers

Depending on the bank, some free services are also limited on a monthly basis (withdrawals for example). Other costs still need to be paid including:

• Foreign transaction costs (withdrawals, exchange rate)
• Ooverdraft (when authorized)
• Withdrawals (beyond a certain number)
• Penalty costs (checks that bounce)

Average rates for a business bank account

The price of your business bank account can depend on your company and size (i.e. a bank account for small business owners is more affordable than accounts dedicated to large corporates with wider banking service requirements). 

The price also depends on the services chosen, and the financial institution in which you open your account. 

Traditional banks have higher average rates (particularly because of transaction fees), but a more complete service offer (savings, authorized overdraft, payment terminals, etc.) than smaller banks. 

The following is a summary of the prices observed for some of the U.S. business bank offers:

Business bank	Monthly rate (average)
Bluevine	None
Chase	$15; waivable if conditions are met
First Internet Bank	None
Mercury	None
Bank of America	$16; waivable if conditions are met
Capital One	$15; waivable if conditions are met
Novo	None
U.S. Bank	None

How to choose a pro bank in 2024?

Selection criteria

There is no best business bank for everyone. Business owners need to ask the right questions and analyze various criteria to choose the best offer for their activity. 

It is useful to firstly clearly define your banking requirements based on these criteria: 

• Means of payment (business cards, check, bank transfer)
• Means of collection (transfer, check, cash, electronic payment terminal, online collection)
• Personal adviser required (or not)
• Insurance and/or savings product requirements
• Professional credit requirements (short term, medium term or long term);
• Accounting features needed
• Specific needs (payments abroad, transfers from abroad, currency exchange)
• Capital deposit (in case of business creation)
• Authorized overdrafts requirements (may only be available in some banks) 

Once these requirements have been defined, you can choose your business needs and review further based upon the monthly/annual pricing of each business bank. 

Thanks to our price comparison table above, you’ll quickly realize that business banks charge some services for free whilst other charge a monthly fee if certain conditions are not met each month. 

We recommend customers always read the fee terms and conditions in detail to understand the standard fees, but also and especially any additional fees, which may depend on your use of the account. 

Choosing a bank: Traditional bank or online bank for professionals?

Whilst most entrepreneurs may have previously appreciated the presence and advice of a physical bank advisor, more and more professionals and companies are turning to an online business bank account. 

Why? Simply because the costs of traditional banks are very high compared to online banks or payment institutions. 

We thus go from an entrepreneur with simple needs who can pay very little per month to bigger companies with high fees using a high street bank.

Therefore one of the main reasons that still pushes entrepreneurs to keep their business bank account with a traditional high street bank often remains credit, which may be unavailable with some FinTech players. 

How to open an account in a business bank? 

When you’ve decided on a bank to work with, opening a bank account for your company is a breeze. You may start the procedure by going online or visiting a branch in your area.

When opening a bank account for a company, the following papers are among the most often requested by financial institutions. Certain banks might ask for extra.

• Employer ID No. (EIN) or, if you operate as a solo business, a Social Security Number
• Personal identification
• The documentation need to establish your company.
• Agreements about ownership
• Business license
• Documentation documenting the use of a different name

How to close your account when changing business banks?

If our comparison has convinced you to change your business bank, then you will have to close your current bank account. It’s quite simple and typically involves contacting your bank either at the bank branch, online, sending a letter or calling your bank’s customer care line.