When you start a business, it’s common to use a personal bank account to manage your company’s expenses. While this structure can help you get started with less friction, many business owners turn their companies into LLCs and create separate business bank accounts for them. Having a separate business bank account for a limited liability company makes tax season easier and protects your personal assets in case your company gets sued. Taking the LLC route and separating business finances from personal finances has several benefits, but you’ll have to find the right bank for your financial needs.
Business Bank Accounts for LLC: Overview
Separating personal and business finances is a big deal, but the accounts themselves can have better perks than personal accounts. Some banks provide more attractive APY and reward programs when you use a business bank account. You may get integrations with popular business tools and software that you may not have with your personal bank account. A business bank account tells prospects that you take your company seriously, and it can strengthen your finances.
How Can a Business Bank Account Grow Your Business?
A bank account is far more than a place to store money. When you create any bank account — business or personal — you get access to the bank’s interface and perks. Those additional resources can increase efficiency and help you reach more people.
Many business bank accounts let you connect tools like Quickbooks that make tax season easier. Integrations like these can save a lot of time. If you don’t have Quickbooks or the resources these business banks sync with, you might be eligible for a discount. Financial institutions and fintech companies that offer business bank accounts have several partnerships in place. You might get a 30% discount for some business software because it’s one of the perks your business bank account provider has in place. Saving money on useful software will help your cash flow and let you use the capital for additional investments.
It’s even possible to get new customers because of your business bank account. Some business owners get ad credits for Google Ads, Snapchat, and other platforms because of their business bank accounts. Ad credits are essentially free money you can use to give advertising a try. Some banks have partnerships where you get $100 in free ad credit, while other banks arrange for you to receive $500 in ad credit if you spend $500 of your own money on ads. The ad credits give you free money to experiment with ads and decide if you want to use online advertising platforms as a deeper part of your marketing strategy. Even if you opt against using these advertising platforms after your ad credits expire, you still get in front of prospects without paying a penny.
If you need funds, you can borrow against higher credit limits. A business bank account lets you access business credit cards that have more purchasing power than personal credit cards. You can also qualify for higher loan amounts if you have a business bank account and make on-time payments for your business credit card. On the other hand, not having a business bank account can restrict your access to capital and force you to settle with less money than you need.
What Do You Need for a Business Bank Account?
A business bank account is a great addition for small business owners who take their companies seriously and want the perks associated with these accounts. If you want a business bank account of your own, you will need the following documentation:
- Personal ID
- Employer Identification Number (EIN)
- Business formation documents
- Ownership agreements
- Business License
If you operate as a sole proprietorship, you will need to provide your Social Security Number. The requirements vary for each bank, and you may have to provide additional documents from the ones listed.
Best Business Bank Accounts for LLCs
Many banks would be happy to have you open up a business bank account with them, but small business owners have to assess their options before choosing the right banking solution for them. This list covers some of the most popular choices that combine safety with attractive perks.
Bluevine
Bluevine is a business checking account that has fewer fees than most banks. You don’t have to worry about overdraft fees or monthly maintenance costs when you use Bluevine as your business banking solution. Business owners receive a debit card in the mail that comes with advanced security features to keep their information safe. There are no limits to how many transactions you can make with your Bluevine debit card. Bluevine lets users apply for lines of credit, and you can receive funding in as little as 24 hours if you get approved. You can also integrate your favorite business tools with your Bluevine business checking account, so everything is on the same dashboard.
- APY: No APY for uninvested cash, but you can get a 3.96% APY if you put the funds into a money market fund. This rate fluctuates.
- Deposit Requirements: No minimum balances or deposits
- Fees: 2.9% Bill Pay fee if you use a credit card, $10 same-day ACH fee, $1.50 fee for outgoing checks through Bluevine Bill Pay, $15 for an outgoing wire fee, $4.95 per cash deposit at an ATM, $2.50 out of network ATM fee, and $30 shipping fee for a debit card replacement if you use express shipping (regular shipping is free)
Pros
- No minimum balance requirement
- Unlimited transactions
- Earn 2% APY on your extra cash if you fulfill at least one of the qualifying conditions
- Borrow up to $250,000 with a line of credit
- Deposit cash at an ATM and tap into their vast ATM network
- Integrations with popular business software
Cons
- You may have to pay extra at the ATM, especially if you deposit cash frequently ($4.95 fee per cash deposit)
- No savings accounts
- Their customer support takes weekends off, which can be unfavorable for companies that operate seven days a week
- A lack of physical branches may discourage some business owners, but the online-only approach allows them to provide higher APYs
Brex
Brex is a fee-free online banking experience that offers integrations with popular business tools. The company launched in 2017 and was founded by Henrique Dubugras and Pedro Franceschi. Brex will send you a credit card with an enticing rewards program, so you earn points back on every purchase. While Brex has many advantages, it isn’t for everyone. The company serves tens of thousands of customers, a customer base that’s lower than most online banks. That’s because you have to be a corporation to qualify for a Brex business bank account. Small business owners with their companies set up as sole proprietorships or general corporations do not qualify for a Brex bank account. However, if you qualify, Brex can be a great choice due to the availability of venture capital debt and a 3.96% APY on funds sitting in your bank account.
- APY: 2% if you spend $500/mo with your Bluevine Business Debit Mastercard or receive $2,500 per month to your Bluevine Business Checking account
- Deposit Requirements: No minimum balances or deposits
- Fees: No fees
Pros
- Brex bank account holders don’t have to worry about monthly fees, maintenance fees, and similar costs that show up in many banks
- Earn rewards on every purchase with the Brex credit card
- Money market fund that yields 3.96% as of now. This rate fluctuates
- Integrations with popular business software
Cons
- You must have a venture-backed startup or mid-market company to qualify for a Brex bank account. It’s not accessible to everyone
- You have to put funds into a money market to get an APY that fluctuates
- No debit card or ATM access
- No physical branches
Mercury
Mercury is a fintech company that provides online banking services. Mercury is relatively new to the banking scene, as it was founded in 2017 by Immad Akhund, Jason Zhang, and Max Tagher in San Francisco. The company has an appealing business credit card that has a 1.5% cashback rewards program for all purchases, eliminating the confusion of some categories providing more points and cash back than others. Mercury provides you with a virtual credit card right away while you wait for a physical card to arrive in the mail. That means you can start spending to scale your business. Mercury Capital also has a venture debt program that helps small businesses raise funds without giving up equity to investors. Their reimagined view of venture debt gives capital to more business owners and can help them command higher valuations.
- APY: Up to 4.44% APY depending on how much you have in your bank account and the performance of low-risk assets (i.e., bonds)
- Deposit Requirements: No minimum balances or deposits
- Fees: 1% fee on currency exchanges
Pros
- 1.5% cashback credit card
- Integrations with popular business tools
- Very few fees
- Allpoint ATM network provides over 55,000 ATMs with fee-free transactions
Cons
- Mercury Treasury, the resource that lets you score up to a 4.44% APY on your idle cash, is only available to small business owners with account balances that exceed $250,000. The company is working to make Mercury Treasury available to all users.
- The 4.44% APY is not guaranteed. It fluctuates and is based on the amount of funds in your bank account. You need over $20 million in your account to qualify for the highest APY on your cash. Qualifying accounts with less than $2 million in funds can currently get 3.99% APY, which is still respectable.
- No cash deposits
- Sole proprietorships and general partnerships cannot qualify for a Mercury bank account
Chase Business Complete Checking Account
Chase Bank has been around since 1799 and has over 4,500 physical branches. Small business owners who prefer a brick-and-mortar banking experience may want to consider Chase and the next banking solution on this list. The business checking account has a $300 signup bonus if you fulfill qualifying activities, such as having a $2,000 balance within the first 30 days and maintaining that benchmark for another 60 days. You also have to make five qualifying transactions within 90 days of opening your account. You should check the qualifying activities Chase lists before creating a bank account with them.
- APY: No APY
- Deposit Requirements: You need to have a $2,000 balance to avoid a $15 monthly fee. No minimum deposit is required.
- Fees: $15 monthly fee unless you have a $2,000 balance or higher. There are a few other ways to avoid this fee, such as spending $2,000 per month on your Chase Ink Business Card or if you served in the military. The bank also has overdraft fees and out-of-network ATM fees.
Pros
- $300 signup bonus if you perform qualifying activities within 90 days of opening your account
- Access to great business credit cards like the Ink BusinessCash Credit Card, where you can receive up to 5% cash back on initial purchases (the first $25,000)
- No overdraft fees as long as you don’t overdraw your account by more than $50. Chase gives you 24 hours to repay the balance before charging the fee
- Over 4,500 physical branches
Cons
- No APY on your idle cash
- $15/mo maintenance fee unless you have a $2,000 balance or fulfill another condition
- The monthly limit on fee-free physical transactions and cash deposits (20 and $5,000, respectively)
Bank of America Business Advantage Fundamentals
It’s possible to trace this bank’s roots to 1904, when Amadeo Giannini founded the Bank of Italy in San Francisco. The bank grew exponentially and became known as Bank of America in 1930. Since its humble beginning, the bank has gone on to serve over 67 million clients. They have over 4,000 local branches and 16,000 ATMs in their network. You won’t have to worry about paying fees on electronic transactions, and they have several business tools on their online platform through Business Advantage 360.
- APY: No APY
- Deposit Requirements: You need a $100 minimum opening deposit, and you will have to pay a $16/mo fee unless you have a $5,000 balance or spend $250 on a Bank of America business debit card.
- Fees: $16 monthly fee unless you have a $5,000 balance or higher. $0.45 fee on excess transactions (you can make 200 fee-free transactions per statement cycle). $5 for a replacement debit card ($15 for rush delivery), $5-$10 per non-Bank of America teller withdrawal, 3% international transaction fee, $2.50 fee at out-of-network ATMs, $5 fee for international out-of-network ATMs, $10 overdraft fee for each item that overdoes your account by over $1 (you can only incur two overdraft fees per day), fees vary for wire transfers
Pros
- Business Advantage 360 provides integration with online tools
- Over 4,000 physical branches
- Fee-free cash deposits for $7,500 per statement cycle, then $0.30 per $100 deposited
Cons
- $16 Monthly maintenance fee that you can waive if you have a $5,000 balance or meet another condition
- Fees for out-of-network ATMs and international ATMs
- The initial deposit requirement of $100 is doable, but most banks do not have this requirement
Novo
Novo is a fintech company providing banking services that were founded in 2016 by Michael Rangel and Tyler McIntyre. Through its partnership with Middlesex Federal Savings, F.A., Novo can provide its users with FDIC protection. Over 190,000 small businesses trust Novo with their business banking experience. The company helps businesses receive cash flow through Novo Boost, a feature that lets you receive revenue in a few hours instead of a few days. It’s only available for payments processed via Stripe, but that can change in the future. Novo Boost is a free perk for small businesses. They also offer discounts on popular business tools and free ad credits you can use to get in front of more customers. If you use ATMs often, Novo may be the right banking solution for you since they refund all ATM fees.
- APY: No APY
- Deposit Requirements: No minimum balances or deposits
- Fees: 1.5% transaction fee ($0.50-$20) for clients who use Express ACH (regular ACH transfers are free). $27 fee for insufficient funds
Pros
- Built-in invoicing
- Integration with popular business tools and software
- Novo Boost provides quicker cash flow
- Discounts on popular tools and free ad credits
- Immediate access to a virtual debit card
Cons
- No cash deposits
- $27 insufficient funds fee
- Bill Pay does not enable recurring payments
