Do you need a separate small business bank account?
That depends on the size of your business.
If you’re launching a formal company, with employees and an office or storefront: Yes, absolutely.
However, for independent contractors, freelancers, and other 1099 workers, a business checking account is usually more headache than it’s worth. You can honestly keep doing things through your personal account.
But what about tracking business expenses?
Many people will tell all self-employed people that they need a separate business account. They cite tracking business expenses as the main benefit.
This isn’t a bad idea. But there are easier ways for independent contractors to keep an eye on business purchases! Like Keeper Tax, which scans your transactions, marking the ones for your business and ignoring the rest.
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This lets freelancers (especially people with side hustles) style agile. They won't have to fuss with separating their personal and business finances.
Which bank is best for opening a small business account?
If you do need a separate business account, though, it’s important to know your options.
We combed through the terms of 14 top banks, assessing their usefulness to small businesses.
There is no one “best” bank for all businesses. It will always depend on your business's specific needs
For example, an already-established business might not need to worry as much about getting a business loan as one just starting out. On the other hand, it will need to keep a careful eye on how many free transactions it gets per month!
Use this handy table to find the right bank for your business. Check out the summaries below to learn more about each financial institution, including what additional features they offer for small businesses.
| Bank | At a Glance |
|---|---|
| Capital One 📅 Established 1994 🏦 755 branches, 2,000 ATMs | Maintenance fees: $3-15/month APY: 0.2% (first year only) Transactions per cycle: Unlimited Deposits per cycle: $5,000 Interest-earning checking account? No |
| Wells Fargo 📅 Established 1929 🏦 5,200 branches, 13,000 ATMs | Maintenance fees: $5-$75/month APY: 0.01% Transactions per cycle: 100-250 Deposits per cycle: $5,000 Interest-earning checking account? Yes |
| Chase 📅 Established 1799 🏦 5,100 branches, 16,000 ATMs | Maintenance fees: $15-$30/month APY: 0.01% -0.02% Transactions per cycle: Data Not Available Deposits per cycle: Data Not Available Interest-earning checking account? No |
| Citibank 📅 Established 1812 🏦 2,649 branches, 60,000 ATMs | Maintenance fees: $15-$22/month APY: Data Not Available Transactions per cycle: 200-500 Deposits per cycle: $10,000-$20,000 Interest-earning checking account? Yes |
| Axos Bank 📅 Established 1999 🏦 3 branches 💻 Online-first banking | Maintenance fees: $0-$10/month APY: 0.81% Transactions per cycle: 100-Unlimited Deposits per cycle: Data Not Available Interest-earning checking account? No |
| First Citizens Bank 📅 Established 1898 🏦 574 branches in 19 states | Maintenance fees: $0-$25/month APY: Data Not Available Transactions per cycle: 150-500 Deposits per cycle: $5,000 Interest-earning checking account? No |
| Bank of the West 📅 Established 1874 🏦 600+ branches | Maintenance fees: $10-$25/month APY: Data Not Available Transactions per cycle: 50-150 Deposits per cycle: $2,500-$5,000 Interest-earning checking account? No |
| Digital Federal Credit Union 📅 Established 1979 🏦 23 full-service branches, 3,000 Credit Union Centers | Maintenance fees: None APY: Up to 0.10% Transactions per cycle: Data Not Available Deposits per cycle: 20/day Interest-earning checking account? Yes |
| BlueVine 📅 Established 2013 💻 Online-only banking | Maintenance fees: None APY: 1.2% Transactions per cycle: Unlimited Deposits per cycle: Data Not Available Interest-earning checking account? Yes |
| First Home Bank 📅 Established 1999 🏦 7 branches, 55,000 ATMs | Maintenance fees: None APY: Data Not Available Transactions per cycle: 250 Deposits per cycle: $7,500 Interest-earning checking account? Yes |
| KeyBank 📅 Established 1825 🏦 1,197 branches, 1,572 ATMs | Maintenance fees: $5-$25/month APY: 0.01% Transactions per cycle: 100-500 Deposits per cycle: $25,000 Interest-earning checking account? Yes |
| US Bank 📅 Established 1863 🏦 3,067 branches, 4,771 ATMs | Maintenance fees: $0-$30/month APY: 0.01% Transactions per cycle: 150-500 Deposits per cycle: 25-200 deposits Interest-earning checking account? Yes |
| Silicon Valley Bank 📅 Established 1983 🏦 29 offices | Maintenance fees: None APY: Data Not Available Transactions per cycle: Unlimited Deposits per cycle: Data Not Available Interest-earning checking account? Yes |
| Square 📅 Established 2009 💻 Online-only banking | Maintenance fees: None APY: 0.50% Transactions per cycle: Data Not Available Deposits per cycle: Data Not Available Interest-earning checking account? No |
1. Capital One
🏆Best if: You plan to make a lot of business purchases
- 💵 Maintenance fees: $3-15/month
- 🧾 APY: 0.2% (first year only)
- 🛍️ Transactions per cycle: Unlimited
- 🏧 Deposits per cycle: $5,000
- 📈 Interest-earning checking account? ⛔ No
Capital One is famous for its 2% cash back Spark Visa credit card.
Between that and its unlimited free transactions per monthly cycle, Capital One is a solid choice for high-activity businesses looking to earn back some of their expenses.
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2. Wells Fargo
🏆Best if: If you do business all across the country
- 💵 Maintenance Fees: $5-$75/month
- 🧾 APY: 0.01%
- 🛍️ Transactions Per Cycle: 100-250
- 🏧 Deposits Per Cycle: $5,000
- 📈 Interest-earning checking account? ✅ Yes
One of the most popular banks for small business loans, Wells Fargo offers many different account types and lines of credit for businesses to choose from.
That, plus its extensive networks of branches and ATMs, makes it a top-notch choice for businesses of all sizes.
3. Chase
🏆Best if: You’re a retailer looking to scale up
- 💵 Maintenance fees: $15-$30/month
- 🧾 APY: 0.01% -0.02%
- 🛍️ Transactions per cycle: Data Not Available
- 🏧 Deposits per cycle: Data Not Available
- 📈 Interest-earning checking account? ⛔ No
Best known for their high-reward credit cards, Chase Bank offers a variety of banking solutions, such as small business lending, and merchant services.
Add in numerous branches and ATMs nationwide, and Chase becomes a go-to bank for businesses.
4. Citbank
🏆Best if: You need a big bank with solid mobile support
- 💵 Maintenance fees: $15-$22/month
- 🧾 APY: Data Not Available
- 🛍️ Transactions per cycle: 200-500
- 🏧 Deposits per cycle: $10,000-$20,000
- 📈 Interest-earning checking account? ✅ Yes
Citibank is another long-running traditional bank with many international locations. Citibank was named the best bank for mobile cash management by Global Finance Magazine, so it's a good option if you want access to cutting-edge digital tools.
They’re also recognized as the best bank for payments and collections.
5. Axos Bank
🏆Best if: You’re looking to grow your account through interest alone
- 💵 Maintenance fees: $0-$10/month
- 🧾 APY: 0.81%
- 🛍️ Transactions per cycle: 100-Unlimited
- 🏧 Deposits per cycle: Data Not Available
- 📈 Interest-earning checking account? ⛔ No
It’s famous for its 0.8% APY on their Business Interest Checking account. The low fees are a high-quality bonus too. Keep in mind: It's a fully online business, with zero brick and mortar locations for you to visit in person.
Unless you want local branches, Axos Bank is a solid choice for high yield account lovers
6. First Citizens Bank
🏆Best if: You’re a Southern business looking for loans
- 💵 Maintenance fees: $0-$25/month
- 🧾 APY: Data Not Available
- 🛍️ Transactions per cCycle: 150-500
- 🏧 Deposits per cycle: $5,000
- 📈 Interest-earning checking account? ⛔ No
While First Citizens isn’t available everywhere, it ranks as one of the top two large banks featured here in terms of how much money it funnels into small businesses. Almost 28% of this bank’s portfolio centers on small business loans.
7. Bank of the West
🏆Best if: You need business loans on the West coast
- 💵 Maintenance fees: $10-$25/month
- 🧾 APY: Data Not Available
- 🛍️ Transactions per cycle: 50-150
- 🏧 Deposits per cycle: $2,500-$5,000
- 📈 Interest-earning checking account? ⛔ No
The other big bank devoting a large percentage of its money toward small business loans. Bank of the West has over $5 billion out in small business loans.
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8. Digital Federal Credit Union
🏆Best if: You want the low costs of a credit union
- 💵 Maintenance fees: None
- 🧾 APY: Up to 0.10%
- 🛍️ Transactions per cycle: Data Not Available
- 🏧 Deposits per cycle: 20/day
- 📈 Interest-earning checking account? ✅ Yes
While not technically a bank, a credit union like this one is a solid choice as a business banking solution. Credit unions usually offer higher interest rates and little to no fees. Their small business bank accounts can vary greatly, though.
Digital Federal Credit Union is a solid small business choice. If you're scoping out other credit unions, though, it's a good idea to do your research.
9. BlueVine
🏆Best if: You’re a tech-savvy freelancer looking to earn big interest
- 💵 Maintenance fees: None
- 🧾 APY: 1.2%
- 🛍️ Transactions per cycle: Unlimited
- 🏧 Deposits per cycle: Data Not Available
- 📈 Interest-earning checking account? ✅ Yes
Boasting the highest APY rate of our list by far, BlueVine is a good solution for young entrepreneurs looking for an online bank — without the typical BS of countless fees and impenetrable customer support.
10. First Home Bank
🏆Best if: You need a fast business loan
- 💵 Maintenance fees: None
- 🧾 APY: Data Not Available
- 🛍️ Transactions per cycle: 250
- 🏧 Deposits per cycle: $7,500
- 📈 Interest-earning checking account? ✅ Yes
First Home Bank offers multiple types of Small Business Administration (SBA) loans.
In fact, First Home is recognized as a Preferred Lender by the SBA. That makes the loan approval process quicker than usual.
11. KeyBank
🏆Best if: Your business makes a lot of deposits a month
- 💵 Maintenance fees: $5-$25/month
- 🧾 APY: 0.01%
- 🛍️ Transactions per cycle: 100-500
- 🏧 Deposits per cycle: $25,000
- 📈 Interest-earning checking account? ✅ Yes
If your small business is already established, KeyBank may well be the choice for you. This bank lets you deposit up to $25,000 per monthly cycle — more than any other bank on our list.
However, it doesn’t offer as many business loans as other banks.
12. US Bank
🏆Best if: You need to expand quickly, especially with startup equipment
- 💵 Maintenance fees: $0-$30/month
- 🧾 APY: 0.01%
- 🛍️ Transactions per cycle: 150-500
- 🏧 Deposits per cycle: 25-200 deposits
- 📈 Interest-earning checking account? ✅ Yes
US Bank’s Quick Loans offer a mighty incentive to startups and new businesses.
While most loans require business history (sometimes years’ worth), Quick Loans focus on loans for equipment, vehicles, and expansion. These let you get your business off the ground faster.
13. Silicon Valley Bank
🏆Best if: You’re starting a tech company
- 💵 Maintenance fees: None
- 🧾 APY: Data Not Available
- 🛍️ Transactions per cycle: Unlimited
- 🏧 Deposits per cycle: Data Not Available
- 📈 Interest-earning checking account? ✅ Yes
This is a top choice for tech startups.Just having a business loan from Silicon Valley Bank may grant extra credibility to future investors.
Probably not the best fit for anyone outside the tech sector, though.
14. Square
🏆Best if: You do a lot of point-of-sale business
- 💵 Maintenance fees: None
- 🧾 APY: 0.50%
- 🛍️ Transactions per cycle: Data not available
- 🏧 Deposits per cycle: Data not available
- 📈 Interest-earning checking account? ⛔ No
Good for merchants and independent artists with lots of vendor or convention sales.
What makes Square so appealing is its easy integration with its POS system and payroll. Essentially, it’s more than just a bank: Square provides a full financial setup for small sellers.
What should a small business look for in a bank?
Self-employed people and small business owners have unique banking needs. However, you might have different needs, depending on your industry, how big your business is, where you’re located, and how tech-savvy you are.
These are the main things you’ll want to consider when opening a business bank account:
- 🏦 Minimum balance requirements
- 🧮 The number of free transactions and deposits you get per statement cycle
- 📈 A high Annual Percentage Yield (APY)
- 💵 Low monthly maintenance fees
- 📱 The quality of their mobile app and online banking services, for features like mobile check deposit
- ℹ️ Access to customer service
- 📉 Low interest rates
- 💸 High cash back rates on business credit card
- 👋 Ease of opening a business bank account
- 💻 Whether you brick and mortar bank or prefer an online platform
- 🌏 Low foreign transaction fees for business outside the US
Don’t be afraid to ask questions about your specific business needs. After all, no one knows your business like you do!
Any bank worth its salt will be happy to address your concerns. If they’re not, it’s better to know before you open that account.
The one universal consideration is that all bank accounts should also be FDIC insured — especially business accounts. If you’re looking to open an account and it’s not, run away and don’t look back.
Are small banks better for small businesses?
On average, yes.
Small banks are much more likely to approve small business loans than their larger counterparts. They know the needs of the community, and they’ll assess loan requests based on a human analysis rather than a cold algorithm.
Of course, size isn't the most important factor. There will always be bad small banks and good big banks — so don’t open an account with a bank just because they’re small. Always review the terms, conditions, and fees before signing any papers.
When to go with a big bank
Don’t ignore big banks completely! The good news is, they also sometimes give you extra peaks, like introductory offers for new customers. And depending on the needs of your business, having a known name and easy access to branches and ATMs across the country can be an advantage.
As you can see, there’s a lot of factors to consider when weighing the pros and cons of a bank for your small business. But so long as you keep your unique business needs in mind, the options that aren’t right for you should fall away pretty quickly.
And remember, you don’t need to stick with the first bank you choose if you don’t like it. Banks should want your business — if they don’t, it’s their loss when you switch to a competitor!
At Keeper Tax, we’re on a mission to help freelancers overcome the complexity of their taxes. That sometimes leads us to generalize tax advice. Please email support@keepertax.com if you have questions.
