Checklist for Choosing a Business Bank

When selecting a bank for your business, focus on these key factors to ensure the best fit for your needs:

• Understand Your Banking Needs: Identify the transactions you’ll handle, like payroll, vendor payments, and tax management. Consider growth potential and whether online, branch, or hybrid banking suits you.
• Prepare Documents: Gather essential paperwork, including business formation documents, IDs, and state-specific licenses.
• Compare Fees and Features: Evaluate monthly fees, transaction rules, and interest rates. Look for accounts that match your transaction volume and financial goals.
• Assess Digital Tools and Support: Prioritize banks offering robust online banking, security features, and responsive customer service.
• Explore Business Support Services: Look for compliance tools, document management, and legal support to streamline operations.

Quick Comparison: Online vs. Traditional Banking

The right banking partner can simplify operations, save costs, and grow with your business. Start by outlining your needs, comparing options, and ensuring the bank aligns with your goals.

1. Know Your Banking Requirements

Start by identifying what you need from a bank. Did you know that 75% of small business lending happens within 25 miles of the borrower?. This highlights the importance of choosing a banking partner that aligns with your business operations.

Outline Your Transaction Types

Think about the transactions your business handles daily. Your bank should offer services that seamlessly support these activities. Here are some key transaction types to consider:

Everyday Business Transactions

• Direct deposit for payroll and employee payments
• Payments to vendors and suppliers
• Processing customer payments
• Handling tax payments and refunds
• Contributions to investment accounts
• Covering marketing and advertising expenses

For recurring monthly expenses, ACH transfers are a reliable option. For larger, time-sensitive payments, wire transfers are often the better choice.

Anticipate Business Growth

If your business earns between $1 million and $10 million annually, you’re part of a group that contributes to a $55 billion banking revenue opportunity. With growth in mind, here are some factors to evaluate:

• Account Options: Look for tiered checking and savings accounts that can handle increasing transaction volumes.
• Future Financing: Choose a bank that provides a range of loan options, including SBA loans.
• System Integration: Prioritize banks that integrate with accounting and payroll tools to simplify operations.

"A mismatched business account can hurt profits with excessive fees, restrictive limits, and inadequate products. These are clear signals to reconsider your banking choice." – NerdWallet

Once you’ve outlined your growth needs, decide whether online banking, branch banking, or a mix of both works best for your business.

Weigh Online vs. Branch Banking

Here’s a quick comparison to help you decide:

For flexibility, consider a hybrid approach. Use an online bank for everyday transactions, while keeping a relationship with a traditional bank for more complex services or emergencies.

Once you’ve made your choice, the next step is to organize your documents to simplify the account setup process.

2. Prepare Required Documents

Getting your documents in order can make opening a business bank account much smoother. Once you’ve identified your banking needs, gather the following key paperwork to keep the process on track.

Business Formation Papers

The documents you’ll need depend on your business structure. Here’s a quick breakdown:

No matter your business type, you’ll need an Employer Identification Number (EIN) from the IRS. Wells Fargo also highlights that if your business isn’t formally registered, additional documentation tailored to your legal structure may be necessary.

Owner Information and IDs

Banks are required to confirm the identities of all business owners and key decision-makers. Make sure you have:

• A government-issued photo ID (such as a driver’s license, passport, or state ID)
• A secondary form of ID (like a credit card or utility bill)
• Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
• Your current home address
• A mobile phone number
• An email address

If your business has multiple owners, any individual with at least 25% ownership must be present when opening the account. For owners who can’t attend, notarized forms might be required. After verifying identities, check for any additional state-specific documentation that may apply.

State-Specific Documents

Some states have unique requirements for businesses, so be prepared to provide:

• Business licenses
• State tax registration certificates
• Fictitious Name Certificates
• Industry-specific permits
• Local business permits

For example, Bank of America notes that businesses operating under a name different from their legal name must supply a Fictitious Name Certificate. To avoid delays, it’s a good idea to contact your bank ahead of time and confirm the exact documentation needed for your state and business type.

3. Compare Fees and Features

Monthly Costs and Balance Rules

Business accounts come with monthly maintenance fees ranging from $10 to $95. However, many banks offer ways to avoid these fees if you meet specific balance or account requirements.

"A lot of business savings accounts have a tiered structure, so it’s important to compare rates based on how much money you plan to keep in the account. Fees are also more common with business accounts than personal ones, so make sure you’re looking at what you’ll actually earn after fees. If the fees are high, they can eat into your balance fast, especially if you’re not keeping a lot of money in the account." – R.J. Weiss, CFP®, CEO of The Ways to Wealth

By understanding these fee structures, you can better determine which account aligns with your financial habits and goals.

Transaction Rules and Costs

Each bank sets its own rules for transactions, and these can significantly impact your costs depending on your business activity:

• U.S. Bank Business Essentials: Includes 25 free teller or paper transactions per statement cycle, with unlimited digital transactions. Additional transactions cost $0.50 each.
• Citizens Business Advisor: Offers 500 free check transactions each month, with a $0.30 fee for every additional check.
• Truist Dynamic Business: Provides 500 free combined transactions per month, with a $0.50 fee for each extra transaction.

If your business processes a high volume of transactions, look for accounts that offer generous free transaction limits and lower fees for any overages.

Interest Rates and Benefits

Most large national banks provide minimal returns on business accounts, typically below 0.05% APY. However, online-first banks tend to offer much more competitive rates:

• Capital One Business Savings: 3.70% APY for balances between $10,000 and $10 million.
• Axos Business Premium Savings: 3.80% APY.
• U.S. Bank Platinum Business Money Market: 3.56% APY, but requires a $50,000 minimum balance.

If earning interest is a priority, consider business money market accounts or certificates of deposit (CDs) for higher returns. Keep in mind that interest rates can fluctuate based on Federal Reserve decisions.

Some accounts also come with additional perks, such as:

• Free ACH transfers
• Merchant services integration
• Advanced online banking tools
• Fee waivers for linked accounts

As you compare accounts, make sure to weigh these features against the needs of your business. Up next, we’ll explore how digital tools and customer support can further enhance your banking experience.

sbb-itb-ba0a4be

4. Check Online Tools and Support

Digital Banking Features

Managing business finances today relies heavily on a bank’s digital tools. According to recent data, 84% of users rely on online banking, while 72% use mobile apps for their financial needs. When assessing a bank’s digital offerings, prioritize the following key features:

Many banks now provide all-in-one digital platforms to streamline financial management. For example, WSFS Bank’s Business Online and Mobile Banking platform offers tools to "access daily financial information critical to making effective treasury management decisions". Features often include secure check scanning, streamlined fund transfers, and customizable activity alerts.

While digital tools are essential, having accessible and responsive customer support can make a significant difference in your banking experience.

Support Hours and Access

After verifying a bank’s digital features, take a closer look at their customer support options. Studies reveal that 90% of customers expect an "immediate" response for inquiries, with 60% defining "immediate" as within 10 minutes.

Here’s what to consider when evaluating a bank’s support:

• Availability of customer service during business hours and beyond
• Multiple communication channels (phone, chat, email)
• Access to dedicated business banking representatives
• Efficient issue resolution – 66% of customers report resolving problems within a day

"Upgrade your financial management with our Online & Mobile Banking for Business. Easily track expenses, transfer funds, and manage payroll all in one place."
– First National Bank

Security and Fraud Protection

Responsive support is vital, but robust security is just as important. With 73% of small U.S. businesses experiencing cyberattacks, prioritizing security features is non-negotiable. Modern banks employ a variety of measures to protect their clients, including:

• Multi-factor authentication: Options such as biometrics or password-free login methods
• Real-time AI monitoring: Detects unusual activity as it happens
• Encryption: Secures data during transmission and storage
• Fraud prevention tools: Features like Positive Pay to verify transactions

Banking scams have become increasingly costly, with average losses reaching $1,600 per victim in 2024. To safeguard your business, look for banks that offer:

• Real-time fraud alerts
• Card controls to set transaction limits
• Regular security updates
• Employee access controls
• Behavioral analytics to detect suspicious activity

Many institutions are now adopting advanced technologies like AI-powered monitoring and machine learning to enhance fraud detection without compromising user convenience.

Make sure the security options align with your business needs to finalize your checklist.

5. Look for Business Support Services

When choosing a bank, it’s not just about digital tools and customer support. Many banks now offer additional business services that can simplify your operations and add value to your day-to-day processes.

Business Setup and Compliance

Compliance is a big deal for businesses, helping to prevent issues like tax evasion and money laundering. Choosing a bank with strong compliance tools can make managing this easier. Here’s what to look for:

For example, Business Anywhere integrates compliance management directly into its platform, making it easier to stay on top of regulations while managing your business.

Mail and Document Services

Managing documents efficiently can save time and reduce errors. North State Bank, for instance, saw a dramatic improvement in loan processing, cutting document exceptions from 11% to under 4% in just two months by using Document Manager.

Key document management features to look for include:

• Secure digital storage with unlimited cloud capacity.
• Mail scanning and forwarding to keep your correspondence organized.
• Automated document tracking for easier oversight.
• Seamless integration with tools you already use.

"DocMan has saved us so much time; now we can just drag and drop documents into the placeholders."

• Elizabeth Moore, Senior Loan Administrator, Texas Farm Credit

Legal Support Services

Navigating legal documentation can be a headache. Some banks offer legal support services to make this easier. Look for these features:

• Registered agent services to handle legal documents and help with compliance.
• Remote online notary options for added convenience.

For instance, Business Anywhere offers registered agent services for $147 per year. This includes compliance tracking and document management, all accessible through their user-friendly dashboard.

Conclusion: Select Your Business Bank

When it comes to choosing a bank for your business, it’s not just about ticking boxes – it’s about finding a partner that aligns with your current needs and can adapt as your business grows. With the U.S. banking system holding assets of $23.60 trillion as of 2022, understanding your options has never been more important.

Here are some key factors to keep in mind:

Smaller, regionally focused banks often bring a personal touch and local expertise that larger institutions might lack. This balance between personal service and digital innovation has been a recurring theme throughout this guide.

For businesses looking to streamline operations, platforms like Business Anywhere offer a solution by integrating services such as registered agent capabilities, virtual mailbox management, and compliance tracking into a single dashboard. This kind of tool can help reduce administrative headaches.

"Small businesses should select their banking institution not based on promotional or rate incentives, but on the bank’s ability to understand their business needs. The right provider delivers tailored advice – both human and digital."

• Jody Bhagat, Personetics

Take the time to meet with banking teams to ensure they can meet your specific needs. As Jeff Crook aptly puts it, "Look for a partner. A bank account is more than a commodity; look for a bank that will support you even through challenging times".

With 49% of Banking and Investment CIOs increasing their automation investments, it’s clear that digital efficiency is becoming a cornerstone of modern banking. Make sure the bank you choose is prepared to support your business in this increasingly tech-driven landscape.

FAQs

What are the pros and cons of using online banking instead of traditional banking for my business?

Choosing online banking for your business comes with its own set of pros and cons.

On the upside, online banks typically charge lower fees, offer better interest rates on savings, and cut down on maintenance costs – helping you save money. Plus, they provide round-the-clock access to your accounts, mobile deposits, and instant transfers, making it easier to manage your finances anytime, anywhere.

That said, there are some drawbacks. Online banks often lack the personalized customer service you’d get from traditional banks, which can be a challenge if your business requires immediate help or needs assistance with complex transactions. Some business owners also feel uneasy without the option to visit a physical branch for certain matters.

In the end, the decision boils down to what your business values most – cost savings and convenience or face-to-face support and added security.

What steps can I take to protect my business bank account from fraud and cyber threats?

To protect your business bank account from fraud and cyber threats, here are some practical steps you can take:

• Create strong, unique passwords and make it a habit to change them regularly.
• Enable multi-factor authentication for an added layer of security.
• Set up account alerts to keep track of transactions in real-time.
• Go through your account statements often to spot any suspicious activity.
• Train your employees to recognize phishing scams and practice safe online behavior.
• Keep all your software and antivirus programs updated to guard against vulnerabilities.
• Stick to secure internet connections and avoid using public Wi-Fi for banking tasks.

You can also work with your bank to take advantage of their fraud prevention tools and services for extra security.

What should I look for when comparing fees and transaction limits for business bank accounts?

When evaluating fees for business bank accounts, it’s important to pay attention to monthly maintenance fees, transaction fees, cash deposit fees, wire transfer charges, and ATM costs. Look for banks that are upfront about these charges so you can clearly see how they align with your budget. Don’t forget to check for any minimum balance requirements that could influence the fees you’ll pay.

Another key factor is transaction limits. Review how many transactions you’re allowed each month and any fees you might face if you go over those limits. Think about your business’s typical activity – deposits, withdrawals, or purchases – and ensure the bank’s limits suit your needs. Picking a bank that accommodates your transaction volume can save you from extra charges and keep your operations running smoothly.

Related posts

• Can You Use a Virtual Address to Open a Business Bank Account? Pros & Cons
• Checklist for Choosing a Secure Virtual Mailbox
• 5 Steps to Open a Business Bank Account Online
• Steps to Open a Corporate Bank Account