Guide: How to Get Free Business Accounts and Business Checking for Free
One thing that all businesses have in common is capital. It does not matter if you are running a quaint coffee shop, a focused nonprofit or a huge corporation, you will need to handle money at one point or another.
Most businesses rely on banks to handle their money and help them effectively manage their capital. However, a bank is a business too, and in order to turn a profit, they often charge for even the most basic of services – even a business checking account, for example.
A good checking account is essential for a business to function. A savvy businessperson will do everything to ensure that he or she acquires a business free checking.
There are a number of ways to do this, but it is essential to start with good tips and good information.
Image Source: Free Business Checking Accounts
6 Tips on How You Can Get Business Checking for Free
1. The Value of Free Business Checking Accounts
The idea of receiving personal or business checking for free is appealing on many levels. Personal checking accounts can be a lot easier to understand than business accounts.
They often have fewer restrictions, lower fees, and higher interest rates.
It might seem easier to just use a personal checking account for your business, but, with the right information, free business checking is easy to understand and will help your finances in the long run.
Even though free business checking accounts might seem complicated and intimidating, it is important that your personal and business finances be separate.
Isolating your business funds will make bookkeeping much easier and can protect your from legal issues. If your business is young and growing, it will probably be important to keep the cost of opening an account as low as possible, and free business checking is a great way to do this.
As you search for the best free business checking for your business, keep in mind that business checking is slightly more complicated than personal checking.
Business checking accounts are subject to more fees and restrictions, and free business checking accounts may have much larger minimum balance requirements.
Also, remember that free business checking accounts are still subject to other fees and penalties, like overdraft fees and fees for excess transactions or deposits.
As you search for your free business checking, you may also be wondering about the price of physical checks.
You may wonder, “If my checking is free, will that give me free business checks?” Just as free business checking accounts are still subject to some fees and penalties, free business checks are not likely to be provided by your bank.
If that is important to you, you might ask your banking representative about your options. However, checks are easy to order, relatively inexpensive, and can be ordered through your bank or an independent provider.
2. Different Kinds of Free Business Checking Accounts
Free business checking can be difficult to find. Some banks offer free business checking with no strings attached and some do not. It is possible find or create a business checking account for free if you understand how different accounts work and how to avoid service fees.
There are two basic ways to get business checking for free:
- Find a bank that offers true free business checking
- Meet your banks requirements to have your service fees waived
Some banks and credit unions offer business checking accounts for free that have no minimum balance or maintenance fees attached. However, many banks charge monthly maintenance fees for business checking accounts.
It is also usually required that customers keep a minimum balance in their accounts to avoid fees. These features can be inconvenient and expensive, but, with a little effort, they are also entirely avoidable, and you can create your own free business checking account.
Often, you can achieve business checking for free by meeting certain requirements set by your bank. Some institutions will dismiss service fees if you have a business debit card associated with the account through the bank. This might not be all that is required though; some banks set a minimum number of transactions that must be made through the card each month in order for the fees to be dismissed.
You may also be able to ditch your service fees and get free business checking if you set up a direct deposit payroll with your bank or if you maintain a certain balance in your account throughout the month.
Banks are more likely to allow you to give your business free checking in exchange for more business from your account. Adding on a new service, like direct deposit or a debit card, will make your account and business more valuable to the bank.
There can also be limits surrounding cash deposits. This usually works in the same way as transaction limits.
You are permitted to deposit cash up until your predetermined limit, and then you are charged a fee for any extra deposits. This fee is usually around 0.2% of the amount of cash deposited. This happens because it is more costly to handle cash transactions than electronic ones.
All-in-One Change Management Tools
Top Rated Toolkit for Change Managers.
Get Your Change Management Tool Today...
3. What Is Analyzed Checking?
If you decide that true free business checking is not the best choice for your business, there are, of course, other options. It is very common for banks to offer alternative methods of reducing or counteracting the service fees associated with business accounts. Analyzed checking is one of these systems that may be able to help you create your own business checking account for free.
Analyzed checking is a banking system that involves an analysis of your banking needs. A bank will assess the balance and activity of your account and apply an earnings credit rate based upon its findings.
An earning credit rate will determine your earnings credit allowance, which is money that the bank will credit back to your business account to offset the cost of service fees.
If your account is large enough and used often enough, you could earn enough credit to cover your banking fees and give your business free checking.
This system can be complicated and is designed to help businesses with many transactions and a large volume of capital keep track of their finances.
This might not be a good option for a new or small business because if your account is not active enough, it will not cover your banking fees in order to give you a free checking business account.
4. Big Banks vs. Small Banks
The key to finding the best business checking account for free for your business is choosing the best bank to suit your needs. Different kinds of banks often offer different kinds of free business checking accounts.
Every bank will have different benefits and disadvantages, and you will need to find the institution with the best balance of give and take for your individual business.
You may need to choose a few features that will work best for you while letting go of others that you might not need as much.
Usually, banks can be divided according to their size. Large, national banks offer different services and suit different needs than smaller banks and credit unions.
In order to choose the best free business checking for your business, you must understand how large and small banks are different, what they can offer you, and what their free business checking offers look like.
Small local banks and credit unions are more likely to offer:
- Lower monthly fees
- Focus on customer service
- Higher cash deposit limits
- Lower overdraft and charge-back fees
- Better interest rates
- Limited locations and ATM access
Big banks are more likely to offer:
- Plentiful locations and ATM access
- Free online banking
- More diverse range of services
- Higher fees and steeper limits
Large banking institutions use their size to be competitive. They have a huge number of branches and ATMs which makes them very easy to use.
They also offer a wide range of options, services, and tools for their customers because of the capital that they can funnel back into their business.
However, because they can make themselves so attractive to customers in other ways, they do not need to waive fees or restrictions on business checking account to remain appealing. This can make it difficult to find free business checking accounts with large banks.
Since smaller banks need to be competitive, they are much more likely to offer free business checking.
They may have fewer options as far as online banking or services are concerned, but they are also more likely to have lower minimum balance requirements and fewer restrictions on their checking accounts.
These banks may also have much lower penalty fees. This can make local banks or credit unions a much more attractive option for small or growing businesses.
5. Consider Online Banking
If you cannot find the right business checking account for free with traditional banks, there is an alternative. An online bank is an option that you might consider, depending on your needs.
Since an online bank has much lower overhead costs, it is much more likely to offer true free business checking.
Image Source: How to Get Business Checking for Free
However, the low overhead cost of online banking can also be their Achilles heel. That low cost is achieved because they do not have physical locations and, therefore, do not have to cover the cost of maintaining those physical locations.
This means that they are able to offer free business checking with fewer restrictions, 24-hour service, and a wide range of options, but it also means that they are more limited in many ways.
Online banks are restricted by their lack of physical buildings. They are usually not able to accept cash deposits, and they do not typically offer ATM access. Some online banks might cover ATM fees which can offset that limitation.
Also, certain businesses, like those working with gambling, are not legally able to open business checking accounts for free or otherwise online. Free business checking is very attractive to customers, but it does usually come at a cost.
If the restrictions associated with online banking do not hinder your business, this might be a good option for you.
6. Your Business Has Unique Needs
It is extremely important to consider the ins and outs of your business when choosing the best free business checking account. Businesses are unique, and each will have different needs when it comes to banking.
Keep in mind how your business functions and how your money will need to move when choosing free business checking.
Things to keep in mind when choosing a free business checking account:
It is very common for banks to offer free business checking if your account balance remains above a certain minimum.
Since the needs of all businesses are unique, you may decide that an account of this nature is adequate for your particular situation.
If the monthly minimum balance will not be an obstacle for you, you can benefit from the diverse options of a larger bank while also maintaining some semblance of a free business checking account.
- ATM access
Smaller banks and online banks usually offer more straightforward free business checking accounts, but they often do not provide a lot of ATM access. Quick, easy access to an extensive ATM system might be important for your business. If this is the case, you will probably want to use a larger bank with a more extensive network.
- Cash deposit limits
If your business deals in cash frequently, as many restaurants do, an account with a high cash deposit limit will be a priority for you. A smaller bank will usually have lower cash deposit limits or lower fees for exceeding the limit. This will be something to consider as you choose the free business checking account that is right for you.
- Transaction limits
It is very common for free business checking accounts to have a limit to the number of transactions that can occur in a month.
If your business needs to perform a high number of transactions, keep this in mind while you are shopping because high fees can pop up if you exceed the transaction limits.
- Online banking
Free online banking might be important to your business. Smaller banks are less likely to offer free online banking, which might make their tendency to offer true free business checking accounts less attractive to you.
Choosing the best kind of account for your business is likely to be a balance of pros and cons – you might choose to have less appealing online banking options in exchange for a business checking account for free or vice versa.
- Future growth
If you plan to grow your business in the future, it will be important to keep that in mind as you choose your account. Business growth often requires capital, which is usually acquired through small business loans.
As you are choosing the bank with the best free checking business accounts for you, keep in mind that you might want to take out a loan with the same institution in the future.
A bank that offers an attractive business checking account but will likely offer you a bad loan might not be the best choice.
A free checking business account is a great way for a business to keep its costs low while also saving money. Finding the right bank and account for your business can be difficult, but with the right information and tips, it should be no problem at all.
Keep our tips in mind:
- Remember the value of free business checking accounts.
- Different kinds of free business checking accounts work best for different businesses.
- Consider analyzed checking.
- Big banks and small banks have different services to offer.
- Consider online banking.
- Keep in mind that your business has unique needs.
Free business checking can be essential to a successful business venture. It is important to gain as much information as possible about business checking and options to get business checking for free.
This way, you can make an informed choice about the best bank and account for your business.
AdvisoryHQ (AHQ) Disclaimer:
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.