If you’re paying sky-high fees or are required to maintain a large minimum balance in your small business checking account, it’s time to make a change. Many financial institutions offer free business checking accounts, making it easy and affordable to manage your company’s finances.
How Business Checking Account Fees Work
Similar to personal checking accounts, many business checking accounts have monthly maintenance fees. Most banks also have minimum account balance requirements, which means that if you keep a certain amount in your account, you won't be charged the monthly service fees.
Some financial institutions also base their fees on usage. So for example, a business checking account might be equipped with a restricted number of free monthly transactions and cash deposits, with possible additional charges imposed for going over the limit.
Related: 5 Bank Fees You Can Always Talk Your Way Out of
Should You Get a Free Business Checking Account?
“Having a separate business account is crucial to protecting your business and personal financial lives,” said accountant Crystal Stranger, president of 1st Tax and author of “The Small Business Tax Guide.”
Stranger explained that if personal accounts are used for business and the business is audited, your personal returns could possibly be audited as well. "This is why co-mingling of funds should be avoided at all cost," she said. "Also, [a business checking account] simplifies accounting to separate expenses carefully, then your bookkeeper only has to reconcile against one account.”
You might also want to open a small business checking account at a different bank than your personal accounts. “This also prevents accidentally depositing funds in the wrong account,” said Stranger. “I admit to having learned that the hard way by accidentally depositing funds in the wrong account and then wondering why my business account was perilously low.”
Stranger also advised small business owners to look for hidden charges, such as check printing, wire transfers, basic payroll services and safe deposit box fees. Some banks bundle these services for free, which can make carrying a higher minimum balance or paying a small monthly fee worth the cost.
10 Best Free Business Checking Accounts
Searching for a free business checking account? “I find online institutions and smaller banks often have the lowest rates; however, price isn't everything,” said Stranger.
These 10 banks, credit unions and online banks have no monthly fees and no minimum balance requirements. But, some of these free business checking accounts might require low initial deposits and have transaction limits:
Arvest Bank Free Small Business Checking Account
If you're a small business owner who requires less than 100 checks, deposits and deposited items per month, Arvest Bank's Free Small Business Checking Account might be right for you. This free busienss checking account has a minimum opening balance requirement of $100 but also many other perks. You can get up to $400 in overdraft protection, a free Arvest Bank debit card, 15 free online bill payments per month, free online banking, unlimited ACH debits and credits, and more.
BBVA Compass ClearConnect for Business
Open a BBVA Compass ClearConnect for Business account with a $100 minimum deposit, and gain access to a number of free benefits: a Visa check card, mobile deposit, mobile banking, online banking, bill pay, no surcharges at BBVA Compass ATMs and more than 43,000 ATMs in the Allpoint Network, online statements and account alerts. Small businesses processing no more than $5,000 in cash each month could benefit from this checking account, which doesn't have a minimum balance requirement.
Photo credit: PRNewsFoto/BBVA Compass
California Credit Union Basic Business Checking
The Basic Business Checking account from California Credit Union calls for a $200 minimum opening deposit but no minimum balance requirement. Open an account, and you'll have free online banking, free bill pay, a business debit card and access to more than 28,000 surcharge-free ATMs in the CO-OP network. And, you'll be able to write 150 checks, make 20 deposits and have 200 deposited items per month at no additional cost. Not to mention, you can get coin and currency processing of $3,000 per month.
Credit Union ONE Totally Free Business Checking
Credit Union ONE's Totally Free Business Checking account has a low $100 minimum initial deposit and offers a number of free added services, such as online banking, bill pay, electronic statements, account alerts, a MasterCard debit card, 24-hour telephone banking and unlimited access to all Credit Union ONE ATMs and CO-OP ATMs. If you're a startup, home-based business or small company, you can benefit from this account that offers no fees for the first 200 transactions per month.
Read: 10 Best Online Checking Accounts of 2015
FirstBank Free Business Checking
FirstBank's Free Business Checking account has no monthly maintenance fees for accounts with 150 transaction items or less per month. Also, there is no initial minimum deposit requirement. Enjoy the convenience of managing your account from anywhere with free online banking with electronic statements and mobile banking. Plus, you can use bill pay to send payments immediately and schedule them in advance.
Huntington Community Business Checking
With Huntington Community Business Checking, you'll receive a free Huntington Debit MasterCard BusinessCard, have access to online banking, enjoy convenient bill pay, receive free online statements and get up to 100 complimentary transactions per month. You won't need to maintain a minimum balance, and you'll get up to $5,000 in coin and currency deposits in cash at branch per month. Huntington created this free business checking account for non-profits and startups with average balances less than $5,000 and minimal monthly checking activity.
Liberty Bank BreakFree Business Checking
Liberty Bank's BreakFree Business Checking account has a super-low $25 minimum opening deposit and comes with many free benefits: ATM usage and refunds, online banking and bill pay. But perhaps the biggest benefit of all is the account's free and unlimited transactions, making this a great free business checking account for those who might experience a surge in the number of monthly transactions processed. You'll also get a Business Debit MasterCard with this account, and there are no minimum balance requirements.
Photo credit: PRNewsFoto/Liberty Bank
Public Service Credit Union Free Business Checking
This account from Public Service Credit Union (PSCU) has a low minimum opening deposit of $100, and you get a number of free benefits, including a Business Debit MasterCard with unlimited free transactions at PSCU ATMs, online banking, bill pay and check imaging. This free business checking account is great for small business that write and deposit no more than 200 checks per month.
SmallBusinessBank.com No Bull Checking Account
Enjoy a number of free features with SmallBusinessBank.com's No Bull Checking Account. There are no minimum balance requirements, and you can use online banking. Plus, you'll get a free business VISA debit card, free unlimited transactions, a free lifetime supply of checks, free bill pay, free export to Quicken & QuickBooks and free mobile check deposit. The only catch: You have to make a low $100 initial deposit. The online bank — which is a division of Gardner Bank — assures its customers that there are no hidden fees, though.
Capital City Bank Absolutely Free Business Checking
You can get a free Visa debit card, access to online banking with bill pay and mobile banking, mobile check deposit, access to Capital City Bank ATMs, free cashing of payroll checks and more with Capital City Bank's Absolutely Free Business Checking account. The account requires a low minimum deposit of just $50, and you can get 500 free transactions per month as well as $10,000 free coin and currency transactions.
How to Get a Free Business Checking Account
If your business is a corporation or an LLC, Stranger said you will likely need to provide your formation paperwork. She said this can include your operating agreement or corporate minutes showing the owner names and percentages of ownership, the federal employer identification number (EIN) that verifies the tax ID number and either a certificate of incorporation or a certificate of good standing to show legal status in the state of operation.
Keep reading: Should I Get a Business Credit Card?
Disclaimer: Some financial institutions listed in this article might be GOBankingRates.com clients.
This article originally appeared on GOBankingRates.com: 10 Free Business Checking Accounts