BEST FREE BUSINESS CHECKING ACCOUNTS OF APRIL 2024

10 Best Business Checking Accounts for Free

How Do Free Business Checking Accounts Work?

When you open a free business checking account, the bank might require a starting deposit of a minimum amount; for example, a minimum opening deposit of $50. You can find many business checking accounts for free like the ones previously mentioned on this list.

Once your account is open and initially funded, it lets you conveniently manage and track your cash flow—that is, your business’ incoming and outgoing transactions. Accessing cash from the account while you’re on the go is also easier as many institutions pair business checking accounts with a business debit card. This debit card lets you withdraw cash conveniently at an ATM even if you’re not near a branch. 

With a business checking account, you can also send and receive electronic transfers. This provides your customers with a convenient way to send you payments and also makes it easier for you to send payments to a third party, like a business vendor or your accountant.  

A business checking account also supports other critical banking functions. For example, it lets you send wire transactions, set up customizable spending accounts for your employees, distribute paper checks and more. If you want to set up merchant services so your business can accept card-based payments, having a business checking account is key. Depending on the financial institution you choose, some of these features and services might come with additional fees. 

In exchange for the deposits kept in the account, business checking accounts typically offer benefits that are useful to small business owners. Many free business checking accounts are protected for up to $250,000 in deposits per account, per institution, by either the National Credit Union Administration (NCUA) or the Federal Deposit Insurance Corporation (FDIC). In addition to this peace of mind, maintaining a business checking account performs the critical role of keeping your business and personal funds separate. This is particularly important if your business is classified as a Limited Liability Corporation (LLC), as it limits your personal liability if your business were to get sued.  

How To Choose the Best Free Checking Account for Your Business

Not all businesses operate the same way, so it’s not surprising that your banking needs are as nuanced as your small business. Pinpointing which free business checking account is right for you can be challenging, but by keeping a handful of factors in mind, you can better identify a checking account that best supports your business and its growth. 

Determine Your Operation Needs

As a small business, you might rely on certain day-to-day features, like access to a debit card to use toward online or in-person purchases or to pay one of your business vendors. Similarly, you might require a checking account that either includes or integrates with a business solution, like merchant cash services so you can accept debit and credit card sales from your customers. Some business owners might also want to see high-level insights and trends related to their cash flow. 

Before comparing free business checking accounts, decide what your strongest banking needs and objectives are.

Minimum Balance Requirements

Other important criteria when comparing checking accounts for your business is the bank’s minimum opening deposit and minimum balance requirements. When you’re first starting your business, you might not have much capital on hand to immediately deposit into your new checking account. Similarly, some banks offer business checking accounts for free with a catch—for example, it might require keeping a minimum balance in the account at any given point or risk a penalty or monthly service fee. 

If you can’t afford to keep your business’ cash tied up in a checking account, pay close attention to the fine print regarding minimum balance requirements.

Low Fees

Fees directly affect your business’s bottom line. Many types of fees can come with a business checking account, including (but not limited to): 

• Monthly maintenance fees
• Foreign transaction fees
• Overdraft fees
• Check deposit fees
• Stop payment fees
• Transaction fees
• Domestic and international wire transfers

As much as possible, find a checking account with low or no fees for checking services and features your business uses the most often. For example, if a majority of your business transactions are conducted overseas or are sent by a foreign bank, focus on a free business checking account that doesn’t charge foreign transaction fees and charges lower international wire fees.

Transaction Limits

Some financial institutions impose transaction limits on free business checking accounts. For example, it might set a limit of 100 electronic transactions per statement cycle. Any transaction that exceeds this limit is charged a nominal fee. As a small business, this small fee can quickly add up if your business undergoes frequent transactions on a monthly basis.

Always verify a checking account’s transaction restrictions and how much the bank charges each time you go over the limit.

Checking Account Perks

Ensuring your business’ essential banking needs are supported is a top priority. But once you’ve confirmed that a checking account can handle your fundamental needs, explore what else it can offer you. Look at whether it offers a high-yield APY on your account balance, offers cash back rewards or even a welcome bonus as an incentive for signing up for the account. 

These extra perks help you earn some returns on banking activity that your business already performs.  

Free Business Checking Accounts vs. Other Banking Options

Although having a business checking account can make your small business present itself as more professional, it’s not the only banking solution that’s available. Below is an overview of how free business checking accounts compare to alternative options.

Free Business Checking Accounts vs. Personal Checking Accounts

Some small businesses that are just starting out might prefer to use a personal checking account instead of a free business checking account. A personal checking account is designed for personal use by an individual; it’s associated with your Social Security number, not an Employer Identification Number (EIN). 

Personal checking accounts might be an option for sole proprietor freelancers who receive irregular income and might not otherwise meet the minimum requirements for a free business checking account, for example. However, using a standard checking account increases your personal liability if something goes awry with your business and puts your personal finances at risk. 

Free Business Checking Accounts vs. Business Money Market Accounts 

Like many free business checking accounts, a business money market account is a type of deposit account that’s typically federally insured for up to $250,000. Money Markets potentially have a higher minimum deposit amount and lower transaction limits for electronic and check transactions. However, you’ll earn a much higher APY than what a traditional business checking account typically offers.

Free Business Checking Accounts vs. Business Savings Accounts

A business savings account is another type of deposit banking account for small businesses. They are designed as an interest-bearing financial vehicle to help you earn returns on your business’ cash flow surplus. Keeping extra cash in a savings account can help your deposit grow while also setting aside funds for a rainy day, like for unexpected equipment repairs or other unplanned business expenses. The catch, however, is that business savings accounts typically have strict transaction limits and don’t have the same day-to-day cash flow benefits as a free business checking account.

The post Best Free Business Checking Accounts of April 2024 first appeared on Newsweek Vault.

2024-04-22T20:37:01Z dg43tfdfdgfd