The right bank depends on your business size, transaction volume, and whether you need in-person service
No single bank is "best" for every business. A sole proprietor who deposits checks twice a month has different needs than a retail store that processes hundreds of card transactions daily, or a consulting firm that rarely handles cash. The choice comes down to what you actually do with your money, how often you do it, and what you're willing to pay for convenience.
Start by listing what matters to you: monthly fees, per-transaction costs, minimum balance requirements, access to branches, online tools, payment processing, or the ability to deposit checks by phone. Then compare banks against that list rather than against each other. A bank that's expensive for one business can be cheap for another.
Key Takeaways
- Monthly fees, per-check charges, and minimum balance requirements vary widely — a $0-fee account at one bank might cost $15 to $25 per month at another.
- If you need to deposit cash or checks in person, you need a bank with branches in your area; online-only banks save money but offer no physical locations.
- Businesses that process card payments should compare merchant services fees separately from account fees, because they're often cheaper through a third-party processor than through the bank.
- Most banks require an Employer Identification Number (EIN) or Social Security Number, a business license or formation documents, and an initial deposit to open an account.
- Switching banks is possible but takes time — plan for at least two weeks to move direct deposits and automatic payments to a new account.
What to compare across banks
Monthly maintenance fees are the first number to check. Many banks charge $0 if you maintain a minimum balance (often $500 to $2,500) or meet a monthly deposit threshold. Others charge a flat fee regardless. For a business that keeps $10,000 in the account, a $0-fee account with a $1,000 minimum is better than a $20-per-month account. For a business that keeps $200, the flat-fee account might be cheaper.
Per-transaction costs matter if you deposit checks frequently or make many transfers. Some banks charge $0.25 to $0.50 per deposited check; others charge nothing. If you deposit 50 checks a month, that's $12.50 to $25 in fees you might avoid elsewhere. Wire transfer fees typically run $15 to $30 per outgoing wire; incoming wires are often free.
Overdraft fees are usually $25 to $35 per incident. Some banks let you link a savings account or credit line to cover overdrafts automatically; others charge the fee and then charge interest on the overdrawn amount. Ask whether overdraft protection is free or costs extra.
Merchant services — the ability to accept credit and debit cards — is sometimes bundled with the account and sometimes sold separately. Bank rates typically run 2.5% to 3.5% per transaction plus a monthly fee. Third-party processors like Square, Stripe, or PayPal often charge 2.2% to 2.9% and no monthly fee. Compare both before deciding the bank's rate is good.
Online-only banks versus banks with branches
Online-only banks (Brex, Mercury, Wise, and others) typically charge no monthly fees, have no minimum balance, and offer free transfers and check deposits by phone. They're built for businesses that don't need to walk into a building. The trade-off: you cannot deposit cash in person, and customer service is by phone or chat only.
Banks with physical branches (Chase, Bank of America, Wells Fargo, regional banks) charge higher monthly fees but let you deposit cash and speak to someone face-to-face. If your business handles cash regularly — a retail store, restaurant, or service business that collects payments in person — a branch is usually worth the cost. If you're entirely digital or use a payment processor that handles cash deposits for you, an online bank can save you $200 to $300 per year.
Many businesses use both: an online bank for day-to-day operations and a local bank or credit union for cash deposits and in-person needs. There's no rule against holding multiple business accounts.
What documents and information you'll need
Most banks require the same basic set of documents to open a business account. Have these ready before you visit or apply online:
- Your Employer Identification Number (EIN) or Social Security Number — sole proprietors often use their SSN, but an EIN is better for privacy and separating personal and business finances.
- Business formation documents — a Certificate of Formation for an LLC, Articles of Incorporation for a corporation, or a business license for a sole proprietorship.
- A government-issued ID (driver's license or passport) for the person opening the account.
- An initial deposit, usually $25 to $100, though some banks waive this if you set up direct deposit.
- Your business address and phone number.
Some banks also ask for a business plan or tax returns if you're new. Online banks usually move faster — you can open an account in 10 to 20 minutes. Banks with branches may take a few days because they verify information by mail or phone.
Comparing costs for your specific situation
The best way to choose is to write down your monthly activity: how many checks you deposit, how many transfers you make, whether you handle cash, and what your typical balance is. Then call or visit three banks and ask what the total monthly cost would be.
| Type of Business | What Matters Most | Bank Type to Consider |
|---|---|---|
| Freelancer or consultant (few transactions, no cash) | Low or no monthly fee, free transfers | Online-only bank |
| Retail store or restaurant (daily cash deposits) | Nearby branches, cash deposit service, merchant processing | Regional bank or credit union with branches |
| E-commerce or SaaS (high transaction volume, no cash) | Low per-transaction fees, robust reporting, API access | Online-only bank or fintech bank |
| Professional services (moderate activity, some clients pay by check) | Reasonable monthly fee, free check deposits, good customer service | Regional bank or online bank with check deposit by phone |
Don't assume the biggest bank is the cheapest. Large national banks often have higher fees than regional banks or credit unions. A local credit union might offer lower fees and better customer service for a small business, even if it has fewer branches.
Red flags and what to avoid
Avoid banks that charge fees for things that should be free: incoming wire transfers, balance inquiries, or account statements. Avoid banks that require a high minimum balance ($10,000 or more) unless you're certain you'll maintain it — the fee for falling below it often exceeds what you'd pay elsewhere.
Be cautious of banks that bundle merchant services at a high rate and make it hard to use a third-party processor instead. Some banks charge a fee if you process cards through Square or Stripe rather than through them. That's a sign they're prioritizing their revenue over your savings.
Read the fine print on overdraft policies. Some banks automatically enroll you in overdraft protection (which costs money); others let you opt out. Know which one you're getting before you sign.
Switching banks if you need to
If you open an account and later realize it's not the right fit, you can move to a different bank. The process takes time but is straightforward. Most banks offer a service called ACH transfer that moves money between accounts automatically. You'll need to update direct deposits (payroll, vendor payments) and automatic payments (utilities, loan payments) at the new bank, which usually takes one to two weeks to take effect.
Don't close the old account immediately. Keep it open for 30 days after the last transaction clears, in case a payment bounces back or a deposit is delayed. Then close it in writing or by phone — never just stop using it, because some banks charge fees on inactive accounts.
Frequently Asked Questions
Do I need an EIN or can I use my Social Security Number?
You can use your SSN as a sole proprietor, but an EIN is better. It separates your personal and business finances, protects your SSN from being shared with vendors, and looks more professional to clients and banks. You can get an EIN free from the IRS website in about 10 minutes.
Can I open a business account online, or do I have to go to a branch?
Most banks let you open online, but some require an in-person visit. Online-only banks are entirely online. Banks with branches usually offer both options. Check the bank's website or call to confirm before you start the process.
What if my business is brand new and I don't have tax returns yet?
New businesses open accounts all the time. Bring your formation documents (LLC articles, business license, or DBA filing), your EIN, and a government ID. Some banks ask for a business plan or a letter explaining your business; most don't. If one bank says no, try another — policies vary.
Can I use a personal account for my business?
Legally, you can, but it's a bad idea. Mixing personal and business money makes taxes harder, looks unprofessional to clients, and can create liability issues if your business is sued. A business account costs little and protects you. Open one before you start.
How long does it take to switch banks?
Opening a new account takes one to five business days. Moving direct deposits and automatic payments takes one to two weeks. Plan for at least two weeks total, and don't close the old account until you're certain everything has moved over.