Managing your expenses is a critical part of running a successful business. Oftentimes, business owners focus on the large expenses and aim to keep those under control. But small expenses can accumulate into a large chunk of profit each month if not properly managed or reviewed.
A business checking account is one of those cuts that people don’t often think about, but can unnecessarily erode profitability each month.
How Do Free Business Checking Accounts Work?
Free business checking accounts work like a regular checking account, except the bank doesn’t charge monthly fees to keep your account open. A business owner will be able to deposit money, write checks, use a debit card, and electronically pay bills if they have a business checking account. Without question, a business checking account is essential to any business.
What Makes a Good Free Business Checking Account?
When thinking about what factors are important for a free business checking account, the following factors were sure to make the list:
A business owner will need a checking account at a bank that’s convenient for them. Convenience looks different for everyone. Some people need to access the bank a few times a week to deposit cash, whereas others prefer a robust online experience, or strong mobile app.
Paying attention to the fees is another important component. Understandably, no one wants to pay a maintenance fee. But other fees can add up quickly. Fees such as; wire transfers, overdraft, and minimum account balance can easily add up to $100+ per month. Be sure to find a bank that has no, or minimal, fees for the above.
At some point or another, all business owners will need to use the customer service support at their bank. Perhaps there’s a wrong charge, or a missing check. Find a bank that offers great customer service hours. If you typically do your banking in the evening or on the weekend, make sure your checking account is at a bank that offers evening and weekend customer service support.
Best Free Business Checking Accounts
If you’re interested in opening a free business checking account, we’ve taken some of the hard work out of that equation for you. We’ve got you covered and populated a list of 5 of the most common business checking accounts:
Bank Novo is a technology company that was founded in 2016. Its headquarters is in New York City, but it’s an online only bank. You can apply for an account with minutes.
Bank Nova caters to the small business owner or freelancer.
There are numerous benefits to Bank Nova:
- Free ACH transfers, incoming wire transfers, and mailed checks
- The bank is FDIC insured
- There are no hidden fees. All in all, customers pay $27 for insufficient funds, and $27 for uncollected funds returned fees.
Despite the growing trend and popularity of online only banks, some businesses still rely on the teller service. Depositing or withdrawing cash requires one extra step, which can be inconvenient depending on how often you have to do it.
Pricing or Fees
The good news is, there are no monthly service charges! Other common services or fees that are present at some large brick and mortar banks simply do not exist with Bank Nova. Customers will pay $27 for insufficient funds and for uncollected funds returned fee.
All in all, Bank Nova is a strong option. It’s fee structure is minimal and it’s online banking service is top-notch. With that said, not having a retail location to visit can be a huge detractor for some freelancers or small business owners. Ultimately, the lack of retail location leads us to a 4 star rating.
BlueVine is another online-only bank initially founded in 2013. This bank started as a way to provide small businesses with capital, but has since added a full business checking account option to their offering.
BlueVine is for small business banking. They currently service over 20,000 small businesses throughout the United States.
BlueVine is well known for:
- No fees, including a minimum opening deposit or minimum balance requirement
- Account owners will earn 1% interest on their account up to $100,000
- Access to a wide range of fee-free ATMs
Although the benefits are attractive, there are some downsides as well:
- There is no branch access
- You’ll have to pay $4.95 per cash deposit. If you deposit cash daily, you can quickly see how this ads up.
Pricing or Fees
Generally speaking, the fees through BlueVine are flexible. There is no monthly fee or account minimum requirement. Customers will pay for transfers, but the fee isn’t unreasonable. The cash deposit fee is the fee that you have to be most careful of. If you don’t interact with cash, or have few cash deposits per month, you may be able to overlook this fee.
All in all, BlueVine gets a 3.5 star rating. Although it’s not uncommon, a cash deposit fee of $4.95 is a lot of money.
Although NBKC has 4 locations, it’s more well known for its online banking. Initially, this bank started in 1999 and today is known for being an “online bank with a personal touch!”
NBKC offers a wide range of banking options. Business banking is one of them, and they do an exceptional job at it.
There are various reasons why one would appreciate the business banking option through NBKC.
- NBKC and autobooks joined together and made accounting simple
- It takes just 5 minutes to apply for an account
- There are minimal fees associated with the account
- They offer low interest rates on business lending
Despite having 4 locations, for all intents and purposes, NBKC is an online only bank unless you live in the Kansas City area. Depositing or withdrawing cash can be a downside, as it is with any online only bank.
Pricing or Fees
The fee structure through NBKC is minimal. There are no minimum account balance requirements, overdraft fees, depositing check fees, or stop payment fees. You will pay $5 to send a domestic wire transfer, and $45 to send or receive an international wire transfer.
All in all, NBKC is one of the most affordable options in the market. It gets a 4 out of 5 star rating.
AXOS Business Checking
Founded in 2000, AXOS Bank offers a very competitive and attractive business checking account option.
Without question, AXOS’s Bank business banking account is centered on small business banking.
The benefits of banking with AXOS include:
- Zero monthly maintenance fees
- Zero minimum balance requirements
- Up to 50 free checks
- Unlimited fee reimbursements for using domestic ATMs
- Outstanding customer service
In addition to being online only, AXOS Bank requires a $1,000 minimum opening deposit. For a business just starting out, that could be hard to do.
Pricing or Fees
If you can overcome that $1,000 opening account balance requirement, their overall fee structure is desirable. Many common fees are waived completely. Paying a small fee for wire transfers or for overdrafting your account can be expected.
All in all, AXOS Bank gets a 4 star rating for their business checking account option.
Bank of America
Bank of America is a well known and respected nationwide bank. Despite the thousands of retail locations they have, Bank of America has an excellent online banking option. Their business account is their Advantage Fundamentals Banking – and it is worth a look.
The Advantage Fundamentals Banking account is a great option for freelancers, or small to midsize businesses. Although the account isn’t technically free, if you keep – on average – over $5,000 in the account, the monthly fee is 100% waived!
There are many benefits to banking with Bank of America. The most common are:
- Excellent customer service hours. Bank of America offers customer service to 11pm EST during the week, and Saturday/Sunday hours.
- You can bank in person, or online. It’s entirely up to you! There are over 4,000 retail locations if you wanted that in person experience
- Withdrawing or depositing cash is easy
- Bank of America offers a cash flow monitoring system that can help you get a better understanding of where your business is spending money
- Bank of America is a full service bank. You can do all your business and personal banking under one roof
Despite the long list of benefits, there are certainly downsides.
- If you don’t keep more than $5,000 in your bank account, or spend $250 in new net qualified purchase on a business debit card, you’ll pay $16 a month in a maintenance fee
- Bank of America charges for services that are either free, or cheaper, at other banks.
Pricing or Fees
As mentioned above, Bank of America charges for services that are either free or cheaper at other banks. These services include:
- Wire transfers (the fee varies)
- Overdraft fees ($35 per overdraft)
- And stop payments ($30 per request)
Considering how convenient Bank of America is, and the easy access to deposit or withdraw cash, Bank of America is well respected in our eyes. All in all, the Advantage Fundamentals Banking receives a 4.5 star rating. Although it’s not free if you have less than an average of $5,000 in the account, that fee is waived!
It Pays to Have Free Options
Small businesses need to focus on providing an excellent customer experience, growing sales, and protecting profit. Without question, a business checking account is a requirement for any business, but some of the fees associated with business checking accounts are simply unnecessary. Be sure to partner with a bank that’s convenient, has a minimal fee structure, and offers outstanding customer service.
If you’re uncertain about which direction to go, consider working with a financial advisor. A professional financial advisor can help you manage your expenses and investments in greater detail. Owning a business is great, but you’ll want to be sure you are also diversifying your investments where possible!