Starting a Limited Liability Company (LLC) allows you to keep your finances separate from your business. If you have an LLC, having a separate bank account for your business is crucial.
Making the right choices is essential when your business is in its early stages, particularly when selecting the appropriate bank accounts. However, with numerous options available, making a decision can be challenging.
Discover all you need to know to select the best business bank accounts for an LLC in this detailed guide.
Here’s a quick overview of the top business bank accounts for LLCs:
- Bluevine – Best Overall
- Lili – Best for One-Person Businesses
- Novo – Best for Low Fees
- American Express – Best for Membership Rewards
- Capital One – Best for Unlimited Transactions
- Bank of America – Best for Traditional Banking
- Axos – Best Full-service Online Bank
- US Bank – Best for Lending Options
- Oxygen – Best for Freelancers
- Chase – Best for Cash Deposits
Bluevine
Bluevine is the top choice overall due to its balanced features, absence of transaction fees, and available lending options for eligible applicants. It’s an ideal checking account option for newly established businesses and seasoned LLCs. With Bluevine, you can easily open a business bank account and be operational within minutes.
Bluevine’s business checking account offers a detailed online option suitable for most small businesses. With this account, you can handle bill payments, apply for small loans and earn a decent interest rate without monthly fees.
The application process is quick and easy, and your account can be up and running on the same day. These features make Bluevine one of the top choices for startups and businesses.
Fees:
Bluevine stands out by charging no maintenance, NSF, or deposit fees, exceeding industry standards. You can conduct as many transactions as needed without incurring additional charges. There are also no minimum balance or deposit requirements.
Interest Rates:
Bluevine presents an enticing APY on its checking account, offering users a return of up to 2.0% on balances up to $250,000. This rate is accessible to account holders who spend $500 monthly on their card or receive $2,500 monthly in customer payments into their checking account. Moreover, Bluevine offers two premium tiers, Bluevine Plus and Bluevine Premier, allowing users to earn up to a remarkable 4.25% APY.
Lending:
Bluevine offers access to business lines of credit of up to $250,000 at highly competitive rates. The application process is fast and easy, with decisions often rendered in under five minutes. Bluevine does not impose opening, maintaining, prepayment, or account closure fees.
Lili
Lili is ideal for small, one-person operations and business banking needs. While FDIC-insured, it’s not a conventional bank but offers business checking account options for small businesses. It emphasizes invoicing without unnecessary and costly features.
Fees:
Lili’s standard banking services are free, with no monthly overdraft, ATM fees, or minimum balance requirements, akin to Bluevine. Opting for Lili Pro incurs a $4.99 monthly fee for additional services.
Interest Rates:
Lili’s standard offerings do not yield APY. Lili Pro offers up to 1% APY on savings accounts through Automatic Savings, enabling automatic daily transfers of at least $1.
Lending:
Lili‘s lending options are limited compared to traditional banks, offering only a free overdraft of up to $200 on debit card purchases.
Novo
Novo is an excellent checking account option for small businesses due to its user-friendly platform, simple application process, and smooth digital payment capabilities. The application takes under 10 minutes to complete, and the response time is quick. With an initial deposit of just $50, you can use your checking account as soon as it’s approved.
Novo excels with its user-friendly mobile app, offering free ACH transfers for easy bill payments, money transfers, payroll processing, and smooth integration with personal accounts. The app provides real-time access to your banking details and transactions, helping you manage your financial obligations.
Fees:
Novo requires no fees for its checking account service, including minimum balance requirements, cash deposit fees, incoming wire fees, or ACH fees. Additionally, Novo refunds all ATM fees and is FDIC-insured through Middlesex Federal Savings, F.A.
Interest Rates:
While Novo doesn’t charge fees for its business checking account, it also doesn’t offer interest on deposits like Bluevine.
Lending:
Novo solely offers to check account services and does not provide lending options, including loans, lines of credit, or business credit cards.
American Express
American Express Business Checking reflects a newer trend in business banking by offering fee-free services and not mandating a minimum balance for its primary business checking account. Additionally, it allows unlimited transactions through its payment services.
This option is particularly appealing for business owners seeking a line of credit and a bank account, as it offers easy loan approval for lines of credit up to $250,000 through Kabbage Funding by American Express.
Fees:
American Express Business Checking does not incur monthly fees or require a minimum opening deposit. While online transactions are fee-free, using out-of-network ATMs may charge approximately $3 per transaction. Cash deposits are not supported.
Interest Rates:
With an APY of 1.30% on balances up to $500,000, American Express Business Checking offers one of the highest returns, although it falls short of Bluevine’s 2.0% APY.
Lending:
American Express also offers Kabbage Funding, providing easy loan approval for lines of credit up to $250,000. You can obtain the authorization with a FICO score of 640 or higher. The application process is smooth, leveraging banking history for automatic approval. Even if initially denied, utilizing a Kabbage checking account can demonstrate financial history for automatic approval upon reapplication.
Capital One
Capital One presents two options for business checking accounts. The Basic account provides unlimited electronic deposits, online and mobile banking services, and a low minimum balance requirement to waive fees. The Unlimited business bank account includes two Basic accounts, catering to businesses with intricate financial management.
While Capital One maintains a traditional banking approach, its user-friendly app sets it apart from other conventional banks. Additionally, it provides a range of supplementary products, such as credit cards, potentially accessible upon approval for their business checking account.
One of the bank’s most commendable attributes is its experienced and highly responsive customer service. However, it’s worth noting that Capital One limits its business checking services to select states and requires in-person branch visits for account applications.
Fees:
To waive the $15 monthly fee for the Basic Checking account, simply maintain a balance of over $2,000. While you can make free monthly deposits of up to $5,000, please note that standard wire transfer fees will apply.
On the other hand, you can waive the $35 monthly fee for the Unlimited Checking account by maintaining a minimum balance of $25,000.This account offers unlimited cash deposits and includes five monthly outgoing wire transfers and free incoming wires.
Interest Rates:
Capital One’s checking account does not yield APY. However, a savings account offers an interest rate of 0.2%.
Lending:
Capital One extends small business loans and lines of credit exclusively to account holders. SBA 504 and SBA 7 (a) loans provide sizable lines of credit up to $5 million and options for longer repayment terms, fixed rates, and lower equity requirements.
Bank of America
Bank of America‘s business checking accounts represent just one part of its services to small businesses. Like Chase and Capital One, BofA provides two tiers of service catering to businesses of varying sizes.
Bank of America is a typical traditional bank. While it offers online capabilities and a decent app, its user experience needs to improve compared to other options. Moreover, its fee structure may not align with the needs of small businesses, given the significant balances required to waive payments.
Fees:
Bank of America provides two business checking account options: Business Advantage Fundamentals and Business Advantage Relationship Banking. To bypass the $16 monthly fee for the Fundamentals account, you have a few options: maintain a combined monthly balance of $5,000, make at least $250 in new qualified debit card purchases per statement cycle, or join the Preferred Rewards for Business program.
On the other hand, the Relationship checking account has a monthly fee of $29.95, which you can waive by maintaining a monthly average balance of $15,000. Additionally, you can avoid the $10 monthly fee for the savings account by maintaining a minimum daily balance of $2,500.
Interest Rates:
Bank of America’s checking account does not yield interest earnings. With the business savings account, only minimal interest can be earned at 0.01% APY, significantly lower than the 2.0% return offered by Bluevine.
Lending:
Bank of America extends many lending options, including business credit cards, secured business loans from $25,000 to $250,000, and secured lines of credit starting at $25,000. While it offers ample lending choices, a minimum credit score of 700 is required for qualification.
Axos
Axos is an online-only bank offering business banking exclusively through its digital platform. Unlike some competitors, it operates independently without relying on another financial institution. Known for its favorable terms and wide range of services, Axos consistently ranks among the best business checking accounts online.
Axos prioritizes user-friendly online banking, making it more accessible than traditional options. This focus on digital convenience makes it an excellent choice for small or online-based businesses. However, the interest rates are modest, with basic checking yielding up to 0.20% and interest checking up to 1.01% with a $5,000 minimum balance.
Fees:
Axos offers four primary business account options: Basic Business Checking, Business Savings Account, and Business Premium Savings. Basic Business Checking has no monthly fee, while Business Interest Checking incurs a $10 monthly charge. Primary Savings has a $5 monthly fee, while the Premium version is fee-free.
Interest Rates:
Interest rates at Axos are decent but not the highest available. Basic checking accounts yield no APY, while interest-bearing accounts offer up to 1.01% APY. Both Basic and Premium Business Savings accounts yield a 0.20% APY.
Lending:
Axos Bank collaborates with Centerstone SBA Lending to provide SBA loans, offering federally backed guarantees and flexible terms. Additionally, it offers commercial lines of credit and term loans, although these are more suitable for giant corporations.
US Bank
US Bank excludes a monthly maintenance fee from its primary Silver business checking account, relying instead on transaction fees. This setup may suit businesses with fewer monthly transactions, like contractors with limited clients.
The bank’s higher-tier accounts waive fees through meeting balance requirements or other criteria.
Fees:
US Bank offers three checking accounts, each with a $0.50 monthly fee and 125 free transactions. Transactions exceeding 125 will be charged $0.50 each.
The Gold package incurs a $20 monthly fee, and transactions cost $0.45 after the 300 limit. The Platinum package entails a $30 monthly fee and charges $0.40 per transaction beyond 500 monthly transactions. Although these fees are considerable, they’re pricier than Bluevine, which levies no fees.
Interest Rates:
US Bank does not yield interest on checking account deposits. Its savings account offers a 0.01% APY with a $25 minimum deposit.
Lending:
The bank provides various lending options, including business credit cards, lines of credit, and loans. Its business credit cards offer diverse features such as cashback, no annual fees, low interest rates, and rewards programs.
Moreover, US Bank offers a range of small business loans tailored to different needs. Loan amounts extend up to $250,000 with Quick Online loans and $12.375 million with government loans.
Oxygen
When browsing Oxygen’s website, one might mistake it for a fashion magazine or trendy boutique. However, it provides a business checking account through its online-only bank. Oxygen offers both a fee-free option and, uniquely, choices with an annual fee, which makes it ideal for freelancers seeking to separate their personal and business finances.
Fees:
Oxygen organizes its services into four elements: Earth, Water, Air, and Fire. These loyalty tiers aim to assist business owners in achieving success on their terms.
The Earth tier is the primary offering and comes with no fees. The savings option earns you up to 0.50% APY. Water is the next tier, costing $19.99 per year. It offers a feature plus 1.00% APY on savings. The Air and Fire tiers cost $49.99 and $199.99 annually, offering an APY of 2.00 and 3.00% on savings, respectively.
Interest Rates:
Oxygen’s savings option for each tier offers lucrative interest rates. For the Earth, Water, Air, and Fire elements, you can earn an APY of 0.50%, 1.00%, 2.00%, and 3.00%, respectively. These interest rates are higher than Bluevines, which offer up to 2.0% and 1.3%.
Lending:
Since Oxygen is only a mobile banking app, not a full-fledged bank, it does not provide lending services.
Chase
Chase Business Checking provides a strong option for those seeking a traditional bank account with cash deposit capabilities. Despite a monthly maintenance fee, its extensive branch and ATM network make it convenient for businesses requiring cash deposits.
Fees:
- Chase Business Complete Checking: $15/month (waived with $2,000 minimum daily balance)
- Chase Performance Business Checking: $30/month (waived with $35,000 combined average beginning day balance)
- Chase Platinum Business Checking: $95/month (waived with $100,000 combined average beginning day balance)
Interest Rates:
Chase Business Checking accounts do not yield APY on deposits. However, businesses may earn interest with Chase Business Savings, with the specific APY available upon inquiry.
Lending:
Chase for Business offers various lending options, including business credit cards and small business loans. Business lines of credit vary from $10,000 to $500,000, whereas loans start at $5,000.
Conclusion
Picking the best bank account for your LLC is crucial in managing finances effectively. With choices like Bluevine, Novo, American Express, and Chase, consider features like fees and lending options to find what best fits your business needs. Make a wise choice to support your business goals and keep your business finances in order.
FAQs
Do all business bank accounts charge monthly fees?
No, not all business bank accounts charge monthly fees. Some accounts offer fee-free options or waive fees based on meeting specific balance requirements or criteria.
Can I connect my business bank account to accounting software?
Yes. Many banks offer integration with popular accounting software platforms, allowing you to link your business bank account directly to your accounting software. This integration can streamline bookkeeping processes by automatically importing transactions, categorizing expenses, and reconciling accounts, saving time and reducing errors.
What documents do I need to open a business bank account?
The documents required to open a business bank account typically include your LLC formation documents, employer identification number (EIN) issued by the IRS, business license or registration, personal identification such as driver’s license or passport for account signatories, and proof of address.
How can I switch my existing business bank account to a new bank?
To switch your existing business bank account to a new bank, you’ll need to follow a few steps. First, open a new business account with the new bank and ensure it’s fully operational. Then, update your business’s payment information for recurring transactions, such as payroll or bill payments, to reflect the new account details. Finally, notify any clients, customers, or vendors of the change in banking information to ensure a smooth transition.
