Best Business Checking Accounts of 2025
Written by Ken Tumin
A business checking account is used for commercial transactions, while a personal checking account is for your private use. Keeping separate business and personal accounts helps make sure the money doesn’t get mixed up.
Business checking accounts may have higher fees than personal checking, but you may also find some business checking accounts with low or no fees. Others pay interest or offer special bonuses.
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- What is a business checking account?
- How much do banks charge for a business checking account?
- Pros and cons of business checking accounts
- How to choose a business checking account
- How to open a business checking account
- How to get a business checking account with bad credit
- Alternatives to business checking accounts
What is a business checking account?
A business checking account is a specialized bank account that allows you to manage your business finances separately from your personal funds. Even the simplest businesses, including sole proprietorships, can benefit from having a business checking account.
Keeping your business funds separate from your personal funds provides limited personal liability protection and simplifies your tax reporting.
Also, business checking accounts usually have features tailored to business needs, such as tools for tracking cash flow, managing expenses, and sending and receiving money between bank accounts.
How much do banks charge for a business checking account?
Bank fees for business checking accounts vary by institution. Common charges include monthly maintenance fees, transaction fees, cash deposit fees, ATM fees, overdraft fees and wire transfer fees.
You may also pay fees for check deposits, electronic withdrawals or other transactions once you exceed a set number of free transactions per month. For example, one major national bank charges 50 cents per transaction after 100 transactions per fee period.
The bank might also charge cash deposit fees if a deposit exceeds a certain limit, often $5,000 to $10,000 monthly. For instance, the bank mentioned above charges a fee of 30 cents per $100 deposited after you reach a $5,000 cap per statement cycle.
Other fees include ATM fees when you use machines outside of your bank’s network and overdraft fees if you don’t have enough money in your checking account to cover a transaction. You may also pay bank fees for sending or receiving wire transfers.
Pros and cons of business checking accounts
While business checking accounts provide important benefits, they can also come with higher costs and complex fee structures. Here are some pros and cons to keep in mind.
Pros
- You keep your personal finances separate from your business finances. This helps provide some legal protection and makes tax reporting easier.
- You enhance your business’s credibility with customers and vendors.
- You get access to business-specific banking services.
- Accounts can have multiple authorized users, which is essential for businesses with multiple partners or employees who handle finances.
Cons
- Business checking accounts usually have higher monthly maintenance fees and transaction costs than personal checking accounts.
- Fees can be complicated for transactions, cash deposits and additional services.
- Accounts often have higher minimum balance requirements.
- Limits on free transactions can result in additional costs.
How to choose a business checking account
Choosing the best free business checking account requires assessing your business’s specific needs. Here are key factors to consider:
- Review account fees and limits. You may still want an account with a monthly maintenance fee if other fees are lower or the fee can be easily waived. The account may have other worthwhile features that offset fees.
- Look for a large ATM network and reasonable ATM fees. Check for fee reimbursements for out-of-network ATM withdrawals.
- Assess online and mobile banking platforms. Robust digital tools can simplify account management. Security measures should include multifactor authentication — a multistep log-in process — to safeguard your business checking account against cyberthreats. Keep in mind that federal regulations provide fewer protections against cybercrime for business checking accounts than for consumer checking accounts.
- Evaluate customer service and business banking support. If you have a small business, research how the bank supports small-business accounts and handles customer service.
How to open a business checking account
Once you’ve chosen a business checking account, you can follow these steps to open it.
- Check what information and documents the bank requires. You’ll typically need your employer identification number (EIN) or Social Security number; an operating agreement or management structure outline; business formation documents, such as articles of incorporation, partnership agreement or business license; and personal ID, such as a driver’s license or passport.
- Apply online or in person at a branch. Once you have the required documents, provide your personal and business information on the application, along with any required documents and signatures.
- Make an initial deposit to fund the account. You can often do an Automated Clearing House (ACH) transfer from a bank account.
How to get a business checking account with bad credit
When you open a business bank account, the bank may ask for your authorization to run a credit check. If you have bad credit, however, your application may be rejected.
Research banks to see whether they require a credit check for business checking accounts. Search for local banks and credit unions that may be willing to work with you on a case-by-case basis. Offering a security deposit or collateral can sometimes offset credit history concerns.
Many banks run a ChexSystems report during the application process. If you’ve had problems with checking or savings accounts — such as bounced checks or unpaid fees — these may show up on your report. You are entitled to one free copy of your ChexSystems report each year.
Alternatives to business checking accounts
If you can’t get approved for a business checking account or decide it’s not the right choice for you, then you can explore a few alternatives.
- Open a business savings or business money market account. These accounts may not need a credit check. However, business savings or business money market accounts often have transaction limits and fees for exceeding those limits.
- Explore online payment services. Providers such as PayPal offer many of the features of a business checking account, including the ability to handle transactions and accept payments. They are especially useful for e-commerce companies and small businesses. But an important downside is the lack of federal deposit insurance.
- Consider a cash management account. This option blends the functions of a checking account and a savings account and is often ideal for small businesses. Brokerage firms commonly offer cash management accounts, which are usually federally insured.
- As a last resort, use a personal checking account. If you have a sole proprietorship with a limited number of monthly transactions, you may be able to use a personal checking account instead.