How to choose the right business checking account
When opening your business’s first checking account, there are several key features to consider that can make business banking easy, convenient and transparent.
A checking account is typically the first type of account a new business owner will open. A checking account allows you to make payments and receive money. It also organizes payment information for you. Having all of your transactions in one place saves time and confusion, which ultimately allows you to focus on building your business instead of organizing your bank statements.
Here’s what to look for when choosing a checking account that works for your business.
1. Online features
Online and mobile banking make managing your business’s finances especially easy.
Look for a bank with a mobile-friendly website or app that allows you to view your statements, make mobile check deposits and pay bills virtually. Mobile banking is also an easier option than visiting a physical bank due to adjusted COVID-19 hours. “Our mobile check deposit rates have gone through the roof since March,” says Peter Fitzke, a Sr. Product Manager in Business Banking at U.S. Bank.
2. A debit card and checks
Make sure any checking account you open comes with a debit card that allows you to withdraw and deposit money from the bank’s ATMs for no fee. Your checking account should also come with checks that you can deposit in-person or via mobile app. “More than 50 percent of our business customers utilize checks as their primary method to both pay and receive payments from their customers,” Fitzke says.
3. Electronic bill pay
Another fundamental feature is electronic bill pay, which allows you to make single or recurring electronic payments either online or by check. This is handy if you’re running a business that keeps you on the go, or if paying bills through the bank or mail isn’t convenient.
4. Free transactions
Most checking accounts come with transaction limits, which means after a certain number of transactions made, you’ll be charged a fee. If possible, estimate how often you’ll be depositing and spending money with your debit card or checks, so you can find an account with a transaction limit that fits your business.
U.S. Bank offers three options: Silver Business Checking, which has a 125 monthly transaction limit and no maintenance fee; Gold Business Checking, which has a 300 monthly transaction limit and a $20 maintenance fee; and Platinum Business Checking, which has a 500 monthly transaction limit and a $30 maintenance fee.
You should have an estimate of much money you plan on keeping in the account. Sometimes maintenance fees associated with the account are waived when you keep a minimum balance. “Transactions and the cash deposits are numbers people hone into, but balances enable you to do more with less, in terms of fees and expenses,” Fitzke says.
5. Overdraft protection
Many checking accounts can add overdraft protection, which can save you from fees. Customers can apply for a reserve line or a credit card to back up funds if your checking account can’t cover an expense. The U.S. Bank Reserve Line offers lots of flexibility for businesses that are on a budget or closely monitoring their cash flow.
If you’re starting a business, choosing the right checking account doesn’t have to be complicated. Being informed about the state of your business’s finances and being aware of the account features is key.