what is a small business checking account

Looking for a small business checking account? Learn about the different accounts we have to offer, and find the right one for your business today. Small business banking refers to banking services and products designed for small and medium-sized businesses. Banks and credit unions often have special. Account Features · Free Online Banking · Avoid a $10 monthly maintenance fee by maintaining a minimum balance of $3,500, or a deposit relationship balance of.

What is a small business checking account -

Who Needs A Business Checking Account?

No traditional small business owner would dream of operating without a business checking account. Not only does having a dedicated account for business transactions make small business accounting much easier, but also a business checking account is required for any business operated as a separate legal entity from the owner.

But in the modern world where side hustles, gigs and multiple income streams are the norm, and where the internet has made it possible to launch a small business from the comfort of your living room, the question of who needs a business checking account is a lot less clear. If you’re not launching a traditional small business, do you need a business checking account?

Here’s what you need to know about business checking accounts so you can decide if you need one for your entrepreneurial venture.

Business Checking Accounts vs. Personal Checking Accounts

At first glance, a business checking account doesn’t seem that different from a personal checking account. Both allow you to make deposits and withdrawals, draft checks or make ACH payments, and make purchases and cash withdrawals with a debit card. And both can potentially save your bacon via overdraft protection.

In terms of how checking accounts work, the main difference between a personal and a business checking account is the cost. The majority of personal checking accounts are either free or have easily waivable fees. Business checking accounts, on the other hand, will almost always have associated fees, and it is nearly impossible to find a truly fee-free business checking account.

While many banks waive their business checking account fees if you maintain a minimum daily balance, have a minimum number of direct deposits per month or spend a minimum amount with your associated debit card each month, these minimum requirements tend to be higher than similar waivers offered for personal checking accounts.

What You Need to Open a Business Checking Account

While nearly anyone can open a personal checking account with nothing more than an ID and Social Security number, the requirements for a business checking account can be a little more onerous. To open a business checking account, you may have to provide the following documentation:

  • Social Security number if you are a sole proprietor or Employee Identification Number (EIN) if your business is a corporation, partnership or limited liability company (LLC)
  • Government-issued ID, such as a driver’s license or passport
  • Business license and Articles of Organization (for LLCs) or Articles of Incorporation (for corporations)
  • Organizing documents filed with the state
  • Partnership agreement with the name of the business and its partners (for a business with multiple owners)
  • Certificate of assumed name/Doing Business As (DBA) name (if you are operating your business under a name different from your legal name, e.g., legal name Li Wei Zhang/DBA Zhang Consulting)

Why Get a Business Checking Account?

Between the harder-to-avoid fees and the more stringent paperwork requirements to open a business checking account, it’s understandable why side hustlers might avoid getting one.

But there are a number of excellent reasons why any small business owner can benefit from a business checking account.

1. Tax Simplification

The IRS recommends that all small business owners have separate bank accounts. While a sole proprietor—an individual who owns a business and is personally responsible for the business’s debts—is not legally required to use a business checking account, it’s still a good idea from a tax perspective.

In particular, a business checking account simplifies the process of paying quarterly estimated taxes. Since your small business income is not subject to withholding, you are on the hook to pay estimated taxes on a quarterly basis. Calculating your business income and expenses will be a quarterly headache if you run your business through your personal checking account.

What’s more, the IRS requires sole proprietors to identify their business and personal transactions within their personal checking accounts so they can accurately file their taxes. And don’t forget: An audit of your business could expose your personal transactions to scrutiny if you mingle personal and business transactions within your consumer checking account.

2. Professionalism and Credibility

Many small side businesses start off as a lucrative hobby. If you started an Etsy shop to sell your unicorn embroidery on a lark, you may still be thinking of your business as a fun hobby, even as you are earning more and more sales from your magical tea towels.

But having a business checking account adds professionalism and credibility to your small business, even if it started off as a hobby. Your clients and customers will be more inclined to trust your business is legitimate when payments and transactions are undertaken from an account that uses your business’s name.

In addition, having a business checking account allows you to accept credit card payments from clients and customers, since you cannot accept such payments through your personal account without using a payment service provider (and paying stiff fees). Being able to accept all payment types makes you look more professional to your clients, while also increasing your ability to earn money from your business.

Finally, the issue of professionalism and credibility could affect your taxes in an audit. If you show no profits for three years out of five, the IRS will classify your business as a hobby, and you will not be allowed to deduct any expenses or take any loss for it on your tax return. While maintaining a separate business account for your business does not automatically confer “business” status on a venture, having a business checking account and keeping detailed records of your business transactions can help to show the IRS that you have a legitimate business.

3. Liability Protection

One of the benefits of registering your business as an LLC or corporation is the separation it offers between you and your business. This can protect you from personal liability in case something goes wrong at your business or someone tries to sue your business.

However, just registering as an LLC or other business entity is not enough to provide you with liability protection if you mingle your personal and business funds in a personal checking account. Unless you keep your personal assets and business assets separate, you could make your personal finances vulnerable, since the mingling of assets makes it appear as though the business is not a separate entity.

4. Preparing You for Future Growth

Whether or not you intend for your small business to grow, having a business checking account gives you more options for future growth. For starters, having a business checking account legitimizes your business if you ever decide to apply for a business credit card or a business loan in the future.

Additionally, you will need to have a business checking account in the future if your business grows, and you will have a much easier time handling your financial accounting—including any future employee payroll responsibilities—if you start off with that separate account. Opening a business checking account early on can be a savvy way of planning ahead for potential growth.

Choosing the Right Business Checking Account

Many banks have business checking account limitations and benefits that can affect your business’s financial health. It’s important to understand these variables when choosing the right checking account for your business:

  • Cash deposit limits. Your bank may limit the amount of cash you can deposit into your business checking account for free each billing cycle. After you have reached the limit, you will have to pay a cash-handling fee for any further cash deposits during that billing cycle. If your business primarily deals in cash, you will need to find a business checking account with a sufficiently high cash deposit limit.
  • Transaction limits. Banks also may limit the number of transactions you can process each billing cycle for free, after which point you may have to pay a fee per transaction. The monthly transactions may include teller deposits, ATM deposits, checks and electronic debits/credits, and you will typically find transactions limited to around 200 per month.
  • Fees. As mentioned above, business checking accounts are more likely to have monthly maintenance fees compared to personal checking accounts, and the requirements for waiving these fees tend to be higher. It’s important to know the specific minimum balance and transaction requirements to avoid your account’s fees.
  • Bundled services. Some banks offer business checking account fee waivers if you also sign up for their merchant services or business credit cards.
  • Interest. Some business checking accounts pay interest on your balance, although it’s important to crunch the numbers to see if the interest rate is worth any fees you may have to pay.

Do You Need a Business Checking Account?

Opening a business checking account is an easy decision for any budding entrepreneur who intends to launch a traditional business, or who hopes to make their nontraditional business a major source of income. If you have a traditional business plan or you intend to see your side business grow and thrive, a business checking account is a clear need for your venture.

The decision is a little less obvious when your business is a side hustle, gig or way to make ends meet. However, unless you are willing to keep meticulous records of your business transactions within your personal checking account, even an occasional side hustler may find that a business checking account is a worthwhile addition to their financial plan.

Choosing a business checking account that fits your business’s needs can help ensure that you protect yourself, your assets, your sanity (during tax time) and your business.

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Источник: https://www.forbes.com/advisor/banking/who-needs-a-business-checking-account/
Not FDIC Insured

Small Business Checking Account Options

Investments and Insurance Products: Not a Deposit

1 If the average account balance falls below $2,500 for the month, a $10 maintenance fee is charged on the last business day of the statement cycle. Other service fees may apply. 

2 If you maintain $10,000 average monthly balance in the Executive Business Checking or if you maintain $25,000 in combined daily balances in the Executive Business Checking and in any related personal accounts in which you are a primary or secondary account owner (Checking, Money Market Deposit, Savings, Certificate of Deposit, Retirement) for each day of the monthly statement cycle, the minimum balance fee is waived. If the average account balance falls below the minimum required balance, a $25 maintenance fee is charged on the last business day of the statement cycle. Other service fees may apply. 

3 If the average account balance falls below $1,000 for the month, a $5 maintenance fee is charged on the last business day of the statement cycle. Other service fees may apply. 

4 You must be enrolled in CIBC NetBanking and have a supported Mobile Banking device to use Mobile Banking and the Mobile Banking remote deposit feature. For further information, refer to Mobile Banking terms and conditions Opens in a new window.. Message and data rates may apply. Contact your wireless carrier for details.

5 500 transactions per month includes bill payments, checks paid, deposits and other credits and debits. There is a $0.50 per transaction fee for each additional transaction over 500.

6 Please review the account agreement for specific fee schedule details (PDF, 205 KB) Opens in a new window..

7 We charge a $1 foreign ATM fee for transactions at ATMs not owned or operated by CIBC (non-proprietary ATMs). This fee is waived for certain account types. The owner or operator of a non-proprietary ATM may charge a surcharge for using that ATM.

QuickBooks is a registered trademark of Intuit Inc.

Источник: https://us.cibc.com/en/small-business/small-business-checking.html

Please read our Small Business Agreements and Disclosures. If you opened your deposit account online within the past 90 days, you may also review the original agreements and disclosures provided to you.

Minimum opening deposit of $25 is required. Accounts closed within 180 days charged $25. Other charges may apply.

Transactions processed through Treasury Services will be charged in accordance with the agreed upon fee schedule.

The monthly Maintenance Service Charges for the KeyBank Basic Business Checking, KeyBank Business Interest Checking, and Key Business Reward Checking accounts can be avoided if any of the following balance requirements are met during the monthly statement period as follows:

  1. The Average Ledger Balance in your KeyBank Basic Business Checking account was $1,000.00 or more 
  2. The Daily Ledger Balance in your KeyBank Business Interest Checking account was $5,000.00 or more,
  3. The Average Ledger Balance in your Key Business Reward Checking account was $7,500.00 or more;

Or:

The Combined cycle-to-date Average Ledger Balance in all your accounts listed below during the monthly statement period were as follows:

The Combined cycle-to-date Average Ledger Balance in your KeyBank Basic Business Checking account was $10,000.00 or more

The Combined cycle-to-date Average Ledger Balance in your KeyBank Business Interest Checking account was $15,000.00 or more

The Combined cycle-to-date Average Ledger Balance in your Key Business Reward Checking account was $20,000.00 or more;

Accounts included to determine the combined cycle-to-date Average Ledger Balance include 1) any combination of business checking (excluding certain business accounts opened for the benefit of others), business savings and business certificates of deposit accounts within two business days prior to your primary business checking account statement cycle date; and/or 2) the outstanding balance of all commercial loans and lines of credit including your Business Cash Reserve credit account(s) (excluding balances past due 60 days or more) as of no more than five business days prior to your primary business checking account statement cycle date.

Additionally, if you are the sole owner* of your business, the list of account balances that may be combined to avoid the monthly Maintenance Service Charge on your primary business checking account includes all of the above business accounts and certain of your personal accounts as outlined below. You may avoid the monthly Maintenance Service Charge on your primary business checking account if the above mentioned combined cycle-to-date balance requirements are met for the respective business checking account.

Accounts included to determine the combined cycle-to-date Average Ledger Balance for sole proprietors include: 1) the combined cycle-to-date Average Ledger Balance in any combination of personal and business checking, personal and business savings and personal and business certificates of deposit accounts within two business days prior to your Key Business Reward Checking account statement cycle date; and/or 2) the outstanding balances of your standard consumer loan/line** of credit balances (excluding balances past due 60 days or more) as of no more than five business days prior to your Key Business Reward Checking account statement cycle date.

* As used herein, "sole owner" means a natural person doing business as a sole proprietor and excludes separate legal entities such as corporations, partnerships, limited liability companies and not-for-profit enterprises.

(**Standard consumer loan and line products include auto loans, RV Loans, marine loans, home equity loans, home equity lines of credit, home improvement loans, Key equity options, preferred (unsecured) credit lines, cash reserve credit, personal loans, mobile home loans and airplane loans with KeyBank NA; and credit cards. Certain non-standard loans and lines of credit may not be included.)

For Key Business Rewards Checking account customers, there is no charge for domestic incoming wires, and up to three free domestic outgoing phone or branch initiated wires per monthly statement period. The charge for each domestic outgoing phone or branch wire in excess of three per statement cycle is $30.00.

Источник: https://www.key.com/small-business/banking/checking/account-comparison.jsp
Not Insured by Any Federal Government Agency

Business Checking

Looking for a flexible, convenient way to manage your daily needs? Learn more about our business checking accounts and find the right one for your business today.

Schedule An Appointment

KEEP YOUR BUSINESS RUNNING STRONG

We offer a variety of checking accounts to help you meet your daily business needs. With our convenient and flexible business solutions, we offer the right checking account for almost all business owners.

AccountsDescriptionSpecial FeaturesMonthly Fees

Designed for businesses with moderate transaction volume; rewards you based on your entire banking relationship.

  • Free Business Debit Card
  • 25 Free Bill Pay Transactions
  • Mobile Banking w/ Mobile Deposit
  • Overdraft Protection
  • First Check Order Discount

$20 Monthly Service Fee
(Can Be Waived)

Monthly fee can be waived with:

  • $10,000 average monthly balance or
  • $25,000 combined deposit balances or
  • $50,000 combined loan balances

(Including Personal & Business Accounts)


Transaction Fees:

First 400 transactions are free; $0.40 per transaction thereafter.
Business Debit Card transactions do not count toward transaction limit.

Cover your basic business needs while earning interest

  • Earns Interest
  • Free Business Debit Card
  • 15 Free Bill Pay Transactions
  • Mobile Banking w/ Mobile Deposit
  • Overdraft Protection

$15 Monthly Service Fee
(Can Be Waived)

Monthly fee can be waived with:

  • $10,000 average monthly balance

Transaction Fees:

First 200 transactions are free; $0.50 per transaction thereafter.
Business Debit Card transactions do not count toward transaction limit.

Designed for your basic business needs

  • No Monthly Service Fee
  • Free Business Debit Card
  • 15 Free Bill Pay Transactions
  • Mobile Banking w/ Mobile Deposit
  • Overdraft Protection

No Monthly Service Fee
(Transaction Fees May Apply)

Transaction Fees:

First 200 transactions are free; $0.40 per transaction thereafter.
Business Debit Card transactions do not count toward transaction limit.

What Makes Our Business Checking Different?

Our experienced Business Bankers have the time to get to know the intricacies of your business, so we can offer checking solutions that work for you.

We offer different business checking accounts, so you can find the right one to help you do your job.

Manage your accounts no matter where your business takes you with free online banking.

We offer business debit cards, paper checks, and Online Bill Pay so you can pay anyone, any time.

Business Resources

Building and running a successful business isn't easy, but we're with you on every step of the journey. Here are some tips and ideas that might help you along the way.

Источник: https://www.bokfinancial.com/business/business-banking-and-loans/products-and-services/small-business-banking/business-checking

Checking designed with your success in mind

Startups and major companies. Professional practices and nonprofit groups. No matter how big your business is or what you do, we have a checking option that can help get the job done.

Open an Account: Basic Business Checking AccountLearn More: Basic Business Checking AccountOpen an Account: Basic Business Checking AccountLearn More: Commercial Checking AccountOpen an Account: Basic Business Checking AccountLearn More: Dividend Checking AccountOpen an Account: Basic Business Checking AccountLearn More: Gold Checking AccountsOpen an Account: Basic Business Checking AccountLearn More: Nonprofit Checking Accounts
Account DescriptionA basic checking account for small businesses with fewer monthly transactions and no minimum balance requirement.A step above the basic checking account, commercial checking is designed for small businesses with more monthly transactions.A dividend-earning checking account for small- to medium-sized businesses with a moderate number of monthly transactions.Gold checking offers dividends what is a small business checking account businesses with larger balances and higher monthly transaction levels.A special dividend-earning checking account for 501(c)(3) nonprofit organizations with higher monthly transaction levels and no minimum balance requirement.
Minimum Opening Balance$25$100$100$100$100
Monthly Maintenance Fee$5, waived w/ paperless what is a small business checking account, waived w/ paperless statements$5, waived w/ paperless statements$5, waived w/ paperless statements$5, waived w/ paperless statements
Minimum Average Daily Balance (ADB) Monthly FeeNone$10$10$10None
Minimum ADB Monthly Fee OffsetN/A$500$5,000$25,000N/A
Transaction Fees (check deposits and drafts cleared)50 Free/mo.
$0.15 ea. additional
150 Free/mo.
$0.15 ea. additional
300 Free/mo.
$0.15 ea. additional
500 Free/mo.
$0.15 ea. additional
500 Free/mo.
$0.15 ea. additional
Account TransfersFreeFreeFreeFreeFree
Cash ProcessingFreeFreeFreeFreeFree
Account Analysis (eligible for earnings credit to waive fees)NoNoYesYesYes
Dividends Earnings/RateNoNoYes, what is a small business checking account $25,000 ADB*Yes, after $100,000 ADB*Yes, after $5,000 ADB*
Digital BankingFreeFreeFreeFreeFree

Write a Review

An asterisk (*) indicates that the field is what is a small business checking account src="https://www.purduefed.com/getmedia/f85e0ad9-e3f7-4828-84cc-89b24b9ff896/Business-CC.jpg?width=636&height=465&ext=.jpg" alt="">
Subject to credit approval. Membership eligibility required.
Источник: https://www.purduefed.com/Business/Accounts/Business-Checking-Accounts
Not FDIC Insured Not Guaranteed by the Bank or its Affiliates

Small Business Checking Account Options

Investments and Insurance Products: Not a Deposit

1 If the average account balance falls below $2,500 for the month, a $10 maintenance fee is charged on the last business day of the statement cycle. Other service fees may apply. 

2 If you maintain $10,000 average monthly balance in the Executive Business Checking or if you maintain $25,000 in combined daily balances in the Executive Business Checking and in any related personal accounts in which you are a primary or secondary account owner (Checking, Money Market Deposit, Savings, Fcbc church pastor of Deposit, Retirement) for each day of the monthly statement cycle, the minimum balance fee is waived. If the average account balance falls below the minimum required balance, a $25 maintenance fee is charged on the last business day of the statement cycle. Other service fees may apply. 

3 If the average account balance falls below $1,000 for the month, a $5 maintenance fee is charged on the last business day of the statement cycle. Other service fees may apply. 

4 You must be enrolled in CIBC NetBanking and have a supported Mobile Banking device to use Mobile Banking and the Mobile Banking remote deposit feature. For further information, refer to Mobile Banking terms and conditions Opens in a new window. Message and data rates may apply. Contact your wireless carrier for details.

5 500 transactions per month includes bill payments, checks paid, deposits and other credits and debits. There is a $0.50 per transaction fee for each additional transaction over 500.

6 Please review the account agreement for specific fee schedule details (PDF, 205 KB) Opens in a new window.

7 We charge a $1 foreign ATM fee for transactions at ATMs not owned or operated by CIBC (non-proprietary ATMs). This fee is waived for certain account types. The owner or operator of a non-proprietary ATM may charge a surcharge for using that ATM.

QuickBooks is a registered trademark of Intuit Inc.

Источник: https://us.cibc.com/en/small-business/small-business-checking.html

Business Checking

Looking for a flexible, convenient way to manage your daily needs? Learn more about our business checking accounts and find the right one for your business today.

Schedule An Appointment

KEEP YOUR BUSINESS RUNNING STRONG

We offer a variety of checking accounts to help you meet your daily business needs. With our convenient and flexible business solutions, we offer the right checking account for almost all business owners.

AccountsDescriptionSpecial FeaturesMonthly Fees

Designed for businesses with moderate transaction volume; rewards you based on your entire banking relationship.

  • Free Business Debit Card
  • 25 Free Bill Pay Transactions
  • Mobile Banking w/ Mobile Deposit
  • Overdraft Protection
  • First Check Order Discount

$20 Monthly Service Fee
(Can Be Waived)

Monthly fee can be waived with:

  • $10,000 average monthly balance or
  • $25,000 combined deposit balances or
  • $50,000 combined loan balances

(Including Personal & Business Accounts)


Transaction Fees:

First 400 transactions are free; $0.40 per transaction thereafter.
Business Debit Card transactions do not count toward transaction limit.

Cover your basic business needs while earning interest

  • Earns Interest
  • Free Business Debit Card
  • 15 Free Bill Pay Transactions
  • Mobile Banking w/ Mobile Deposit
  • Overdraft Protection

$15 Monthly Service Fee
(Can Be Waived)

Monthly fee can be waived with:

  • $10,000 average monthly balance

Transaction Fees:

First 200 transactions are free; $0.50 per transaction thereafter.
Business Debit Card transactions do not count toward transaction limit.

Designed for your basic business needs

No Monthly Service Fee
(Transaction Fees May Apply)

Transaction Fees:

First 200 transactions are free; $0.40 per transaction thereafter.
Business Debit Card transactions do not count toward transaction limit.

What Makes Our Business Checking Different?

Our experienced Business Bankers have the time to get to know the intricacies of your business, so we can offer checking solutions that work for you.

We offer different business checking accounts, so you can find the right one to help you what is a small business checking account your job.

Manage your accounts no matter where your business takes you with free online banking.

We offer business debit cards, paper checks, and Online Bill Pay what is a small business checking account you can pay anyone, any time.

Business Resources

Building and running a successful business isn't easy, but we're with you on every step of the journey. Here are some tips and ideas that might help you along the way.

Источник: https://www.bokfinancial.com/business/business-banking-and-loans/products-and-services/small-business-banking/business-checking
what is a small business checking account

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2 Replies to “What is a small business checking account”

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