Choosing a bank for your business is a necessity for any business owner. The bank you choose is more than just a place to store your business funds; It serves as a crucial partner in your future financial journey. Choosing the right bank allows you to establish a relationship with a financial institution that understands your business needs and helps provide you with the tools you need to grow and expand your business.
In 2024, businesses will have more options than ever. Banks now offer a wide range of features designed to meet the unique needs of business owners. From traditional banks to fully digital institutions, there is a lot to consider. Read on for a complete 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 that you take some time to think about the specific needs of your business. 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 traditional bank? Thinking about these questions will help you get into the right mindset for selecting the bank that best suits your business.
When I opened my first business bank account, I realized how different business banking is from personal banking. My priority was to find a bank that offered solid online tools, since I was always on the go 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 management services. Maybe you want a bank with strong QuickBooks integration and accounting software. Identifying your needs early on will help you narrow down your options.
2. Look for specific features for your business
Although many banks now offer business accounts, they are not all created equal. It's best to look for a bank that offers features designed specifically for today's businesses, such as:
- commercial checking accounts with little to no additional account fees.
- Commercial 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 such as QuickBooks or Xero.
For example, Bluevine would be an option I would recommend for businesses that operate primarily online. Bluevine offers a high-interest business checking account with no monthly fees and its 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 most ideal for the business owner who wants the solid security of a big bank with the convenience of an easy-to-understand online banking platform.
| Bluevine Business Checking Account | ||||
| Chase Business Complete Banking |
3. Consider fees and costs
Bank fees and additional costs can add up quickly, especially for small businesses. Be sure to read the fine print and understand the fees you may be charged when signing up for a banking service. I recommend that you be especially careful with:
- Monthly maintenance fees which are related to maintaining an account in the bank.
- Transaction fees which can accumulate if your company makes recurring transactions regularly.
- ATM Fees Which matters if your business handles frequent cash deposits/withdrawals.
- Transfer fees which depend on whether your company processes frequent bank transfers.
Many banks offer fee waivers if you maintain a minimum balance or meet other financial conditions. When I was looking for my business account, I chose a bank that waived their monthly maintenance fee as long as I kept a certain minimum dollar amount in the account. This helped my company save a little more money each month, which is especially helpful in the early stages of a business when every dollar counts.
4. Check online and mobile banking capabilities
Whether you're paying bills, transferring funds, or checking your account balance, you'll probably want to be able to do it quickly and easily from your phone or computer. Many banks now provide digital and online services offering a user-friendly mobile app and online banking platform for business needs.
When I started my business, I didn't realize how much time I would spend managing my finances online. I wanted a bank with an app that would allow 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 are looking for if you are interested in mobile banking options.
5. Evaluate your customer service options
While it's nice to have online banking tools, there are times when you will benefit from the opportunity to talk to 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 personalized customer service options. Before choosing a bank, take a moment to consider the bank's reputation and customer services. Do you 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 loan and credit options
You never know when you might need a line of credit or loan to expand your business. Even if you don't plan to get credit for your business, it's worth looking into the loan options that different banks offer to customers who have accounts with them. Some banks specialize in small business loans, while others may offer more flexible terms or lower interest rates for larger businesses that need access to capital and medium-term financing.
When I reached a point in my business journey where I was considering expanding, my bank offered me a competitive line of credit that was easy for me to apply for and get approved for. Having a bank that could provide me with 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. Look out for features like:
- FDIC Insurance: This ensures that your account funds are protected up to $250,000.
- Fraud monitoring: Today, 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 choose one with strong security measures, including secure login features and real-time alerts about suspicious activity. You can also learn more about safe banking and reconciliation practices here and further explore the best bank reconciliation software for businesses here.
What is needed to open a business bank account?
Opening a business bank account is not as simple as opening a personal account. You will need to gather several documents before you can begin. Here is what most banks will require:
- Employer Identification Number (EIN) or Social Security Number (SSN) for sole proprietorships.
- Business formation documents, such as articles of incorporation or partnership agreements.
- Property agreements.
- Commercial license.
- Personal identification, such as 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 be overwhelming, but by focusing on the specific needs of your business and comparing the features, fees and level of services offered by different banks, you will undoubtedly find the one that is 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 to open your bank account online or in person ultimately depends on your needs. An online bank could offer convenience, faster document and identity processing, and be more cost-effective. However, opening an account in person could offer more personalized assistance, face-to-face customer service, and better cash management measures.
What are the disadvantages of a business bank account?
Although opening a business bank account can be a great option for your business, there are some potential drawbacks worth considering. For example, you may need to complete additional paperwork if you opt for an in-person banking experience. Additionally, you may sometimes have to pay hidden fees related to overdrafts and balance requirement penalties that can be substantial.