How to find the best small business checking account in 2021
If you recently started a business or are on the verge of starting a new business, your expectations are probably high. You intend to have the BEST business of its type around. One way to accomplish this is to have the BEST small business checking account around. Why is having a good checking account so important for your business? Having a solid account is the best way to manage your money for future growth. We’ll go into more detail about the benefits below and highlight why we believe Kabbage Checking™ is your best choice.
Why is having a small business checking account so important?
A business checking account adds credibility to your small business, and it helps tremendously with record keeping. It gives you the ability to separate your business and personal expenses, prepare for taxes and establish your business’s financial presence.
What Does a Small Business Need in a Business Checking Account?
Let’s look at the specific needs of a small business owner:
- A bank with a small business focus: A bank that is geared towards small businesses will understand your situation and be committed to giving you the most hassle-free, simple way to bank.
- A free business checking account with low monthly fees: This will be helpful to you as you manage the money you’d like to invest in your business.
- A good interest rate: This can make a big difference in the long run. It’s much better to earn 1% on your funds than it is to earn 0% on your funds.
- Minimum requirements and limits: It would be great to not have a minimum deposit requirement, a minimum balance requirement or even an opening deposit requirement. It would also be great to avoid limits like number of transactions or deposits per month.
- Quick access to cash: Since poor cash management is a key reason for businesses to go bankrupt, having quick access to cash is critical.
- Simplicity: If you are a relatively new entrepreneur, you likely have simple needs for your business banking upfront: easy access to your account and the ability to track transactions. You don’t want to have to fill out a form every time you need something from your bank.
- Online banking: Not having to drive to a branch can be a big time saver.
- ATM accessibility: Having access to free ATMs is a big benefit, especially when you need to withdraw cash from your account.
- Additional services: A bank that offers business loans or additional funding resources would be very helpful.
What Should You Look Out For When Opening a Small Business Checking Account?
While the bank you use for your personal checking account may be willing to accommodate your request for a business account, many business bank accounts aren’t really meant for small businesses. Most banks make the bulk of their money from big businesses, so they orient their business accounts to this audience. If you go with one of these banks, you’re likely to have a more cumbersome and sometimes more costly experience.
When you’re evaluating different types of financial institutions, recognize that you’ll get a very different experience depending on whether you choose a national, regional or local bank, a credit union or an alternative bank. An online-only bank, for example, may offer a free account that can be opened quickly and easily but does not include access to a physical branch location. A local brick-and-mortar bank, on the other hand, may offer a more personalized customer experience but require that you apply for an account in person and only work with businesses within their county.
What’s the Difference Between Small Business Checking Accounts and Normal Business Accounts?
With small business checking accounts, you need simplicity and low fees. Simplicity allows you to not have to devote a lot of time to banking. Low fees enable you to preserve as much of your money as possible to invest in your business.
With large business checking accounts, functionality is the bonus. The more features the bank offers you, the better. However, added features often seem great on the surface, but they can add a level of complexity, and they typically have higher fees.
How Does Kabbage Address Small Business Needs?
Learn more about Kabbage Checking and our other small business offerings, please visit https://www.kabbage.com/checking/.
Let’s Compare Kabbage to Other Banks*
When we compare Kabbage to Bank of America, Chase and Wells Fargo, we see that they all offer mobile banking, debit cards, mobile deposits, e-statements, free ATMs and the ability to open an account online. Here are the differences.
|Kabbage||Bank of America||Chase||Wells Fargo|
|Fees||No set-up fees, balance requirements or monthly maintenance fees||A monthly fee of $16 or $29.95 that can be avoided by maintaining an average monthly balance||A monthly fee of $15 that be avoided by maintaining an average monthly balance||Monthly service fee of $10, $25 and $75, depending on which type of account you choose, that can be avoided by maintaining an average monthly balance|
|APY||1.10% on balances up to $100,000||No||No||Wells Fargo’s Navigate account is interest bearing; no details available|
* This data was taken from the companies’ websites on July 1, 2021 and also from Bench’s April 8, 2021 review of the top seven noteworthy banks for small businesses.
We believe that Kabbage truly offers the best business checking account around. To learn more about how Kabbage Checking can support your small business, please visit our main Checking page.
Have questions about Kabbage Checking? Check out our FAQs for more information about how Kabbage works.
What do you need to open a Kabbage checking account?
To open a Kabbage business checking account, here are the documents you’ll need:
- Personal and business contact information
- Business TIN/EIN information
- Ultimate beneficial owner (UBO)
- If multiple owners of more than 25% of the company
- Business structure
- How does Kabbage compare to other online lenders?
How does Kabbage compare to other online lenders?
Most online lenders offer a number of conveniences, including mobile banking, access to free ATMs, debit cards, mobile deposits, e-statements and free ATMs. Kabbage distinguishes itself in having no set-up fees, balance requirements or monthly maintenance fees. In addition, we allow you to set up as many as five Reserves, where you can organize your money for specific savings goals or categories. We also distinguish ourselves in offering an APY of 1.10% on balances up to $100,000.
What are the benefits of a Kabbage checking account?
When you open a Kabbage checking account, you get to take advantage of no monthly fees, no ATM fees and no minimum daily balance requirements.
You can access your bank account when and where you need it. You can use your Kabbage Debit Mastercard® to withdraw cash through a network of free ATMs and deposit cash at over 90,000 retail locations nationwide. Perhaps most importantly, you get to take advantage of our industry-best interest rate of 1.10% APY for balances up to $100,000.