Choosing a bank for your business is a must for any business owner. The bank you choose is more than just a place to hold your business’s funds; it serves as a crucial partner in your future financial journey. Picking the right bank lets you establish a relationship with a financial institution that understands your business’s needs and helps provide you with the tools you need to grow and expand your business.
In 2024, businesses have more options than ever. Banks now offer a wide range of features tailored to suit the unique needs of business owners. From traditional brick-and-mortar banks to fully digital institutions, there’s a lot to consider. Keep reading for a comprehensive guide on how to choose the right bank for your business in 2024.
What to Consider When Choosing a Bank for Your Business
1. Understand Your Business Needs
Before you start comparing banks, I would recommend you first take some time to think about your business’s specific needs. Will you need access to multiple lines of credit, or are you simply looking for a place to deposit and withdraw funds? Do you expect to do most of your banking online, or do you prefer the in-person experience of a brick-and-mortar bank? Thinking of these questions will help get you into the right frame of mind for selecting the bank that works best for your business.
When I was opening my first business bank account, I realized how different business banking is from personal banking. My priority was finding a bank that offered robust online tools since I was always on the move and didn’t have time to visit a physical branch all the time. Your priorities may be different. Perhaps your business would benefit more from a bank that offers better cash-handling services. Maybe you want a bank with strong QuickBooks and accounting software integration. Identifying your needs up front will help you narrow down your options.
2. Look for Business-Specific Features
Although many banks now offer business accounts, not all are created equal. It’s best to look for a bank that offers features specifically designed for today’s businesses, such as:
- Business checking accounts with little or no additional account fees.
- Merchant services for simplified payment processing.
- Lines of credit for business loans and easy access to credit.
- Payroll services for business management.
- Accounting integrations with software options like QuickBooks or Xero.
For example, Bluevine would be an option I would recommend for businesses that operate primarily online. Bluevine offers a high-interest rate business checking account with no monthly fees, and their online banking tools are easy to understand. On the other hand, another great option is Chase, which offers more traditional banking services but with equally excellent mobile app capabilities. Chase would be more ideal for a business owner that wants the robust security of a big bank with the convenience of an easy-to-understand online banking platform.
| Bluevine Business Checking | ||||
| Chase Business Complete Banking |
3. Consider Fees and Costs
Bank fees and extra costs can add up quickly, especially for small businesses. Make sure you read the fine print and understand the fees you could be charged when signing up for a bank service. I recommend you particularly watch out for:
- Monthly maintenance fees which are related to maintaining an account at the bank.
- Transaction fees which can rack up if your business has regular recurring transactions.
- ATM fees which matter if your business handles frequent cash deposits / withdrawals.
- Transfer fees which depend on if your business processes frequent wire transfers.
Many banks offer fee waivers if you maintain a minimum balance or if you meet other financial conditions. When I was shopping around for my business account, I chose a bank that waived its monthly maintenance fee as long as I kept a certain minimum dollar amount in the account. This helped my business save a little bit more money each month, which is especially helpful in the early stages of a business when every dollar counts.
4. Check for Online and Mobile Banking Capabilities
Whether you’re paying bills, transferring funds, or checking your account balance, you will likely want to be able to do it quickly and easily from your phone or computer. Plenty of banks now provide digital and online services that offer a user-friendly mobile app and an online banking platform for business needs.
When I started my business, I didn’t realize how much time I would be spending managing my finances online. I wanted a bank with an app that allowed me to deposit checks, transfer funds, and view my transaction history in real time. Make sure the bank you choose offers the level of convenience you’re looking for if you are interested in mobile banking options.
5. Assess Your Customer Service Options
While online banking tools are indeed nice to have, there are times when you will benefit from the chance to speak with a person face-to-face. Whether you need help with a loan application or have questions about your bank account, it’s helpful to have access to tailored customer service options. Before choosing a bank, take a moment to consider the bank’s customer service reputation and services. Do they offer 24/7 support? Is it easy to reach a physical representative? These are questions worth asking when it comes to the level of service you expect to receive.
6. Explore Your Lending and Credit Options
You never know when you might need a line of credit or a loan to expand your business. Even if you’re not anticipating taking out credit for your business, it’s worth looking into the lending options that different banks offer to the customers that hold accounts with them. Some banks specialize in small business lending, while others may offer more flexible terms or lower interest rates for larger companies needing access to medium-term capital and financing.
When I reached a moment in my business journey where I was considering expanding, my bank offered a competitive line of credit that was easy for me to apply to and get approved for. Having a bank that could provide financing when I needed it helped ensure my business operations remained smooth.
7. Review Security and Fraud Protection
In today’s digital world, cybersecurity is more important than ever. You need a bank that prioritizes the security of your funds and data. Keep an eye out for features like:
- FDIC insurance: This ensures that the funds in your account are protected up to $250,000.
- Fraud monitoring: Nowadays, banks monitor accounts regularly for unusual activity.
- Data encryption: Strong data encryption can help protect your account information.
When choosing a bank, I made sure to pick one with robust security measures, including secure login features and real-time alerts for suspicious activity. You can also learn more about secure banking and reconciliation practices here and further explore the best bank reconciliation software for businesses here.
What’s Needed to Open a Business Bank Account?
Opening a business bank account isn’t as simple as opening a personal account. You’ll need to gather several documents before you can get started. Here’s what most banks will require:
- Employer Identification Number (EIN) or a Social Security Number (SSN) for sole proprietorships.
- Business formation documents, such as articles of incorporation or partnership agreements.
- Ownership agreements.
- Business license.
- Personal identification, like a driver’s license or passport / government ID.
Final Thoughts: Choosing the Right Bank for Your Business in 2024
Choosing the right bank for your business can feel overwhelming, but by focusing on your business’s specific needs and comparing the features, fees, and level of services that different banks offer, you will no doubt find the one that’s best for you.
Whether you prefer the flexibility of a digital bank like Bluevine or the security of a traditional bank like Bank of America, the right bank will help you manage your finances with confidence as your business continues to grow.
Frequently Asked Questions
Is it better to open a business bank account online or in-person?
Choosing whether to open your bank account online or in-person is ultimately dependent on your needs. An online bank might offer convenience, faster document and identity processing, and be more cost-effective. However, an in-person account opening might offer more personalized assistance, face-to-face customer service, and better cash handling measures.
What are the disadvantages of a business bank account?
Although opening a business bank account can be a great choice for your business, there are a few potential drawbacks worth considering. For example, you might need to maintain additional paperwork if you opt for an in-person banking experience. Additionally, sometimes you may need to pay hidden fees related to overdrafts and penalties on balance requirements that can be hefty.