How to Choose the Right Bank for Your Online Business

Written By Elli Van Treeck

As a small business owner, you have probably heard “You need to have a separate bank account for your business!!” but if you are anything like me, you really just want to know WHY before you do anything. 

There are a couple of main reasons why having a separate bank account for your small business is important 

  1. Legal protection. If you have an LLC for your business, it is important to keep your business and personal transactions separate. Doing this, simply put, protects you and your business! (i.e. if you were to get sued in your business - they can’t come after your personal assets too)

  2. Organization. Keeping things separate makes bookkeeping for you and/or your bookkeeper SO much easier. You don’t have to wonder if the trip to Target was for business. You just know it was because you have the habit of keeping things separate! 

So what do you want to look for in a bank when you are trying to choose one for your business?

  1. Online vs In-Person. Do you need to go to the bank in person? For many of us, we can run our business without ever stepping foot into a bank. If you have to make cash deposits, it may be best to have a local bank! 

  2. No fees! Always look for a bank for your business that has no fees. There is no reason for you to have to pay a monthly/annual fee to keep your money there.

  3. Minimum balance requirements. Some banks require you to have a minimum amount in your bank account. It is just easier if this isn’t a requirement so you can avoid extra fees. 

  4. Number of checking accounts allowed. When opening a business bank account, I always recommend at least 3 different accounts to organize your money:

    1. checking account where all money comes in & out

    2. checking/savings for setting aside money for taxes

    3. checking/savings for emergency savings.

  5. View only access. If you ever get to the point with your small business where you want to hire a bookkeeper - view only access is SO important. Now you may be starting off and think this isn’t a big deal, but view-only access allows your bookkeeper to download bank statements (and that is it!) aka they don’t have to bug you to get them.  Be sure to look if you can 1. Add a bookkeeper to your account and 2. What the process is like. 

  6. Ease of Integration. Does it easily integrate with common bookkeeping softwares like QuickBooks Online or Xero? As your business grows, this will be super important! 

What do you need to open a bank account for your small business?

When you open your business account and start the application process, you will need some documents to get everything going. Here is a list of common things the bank may ask for:

  1. Personal ID

  2. Business Tax ID (this is your EIN that you set up with the IRS aka your business social security number)

  3. Business Formation Documents (LLC/Corporation/Partnership articles of Organization or Articles of Incorporation)

  4. Business Address & Contact info

  5. Business Licenses & DBA documents

Now if you are a Sole Prop and you do not have an LLC just yet (aka all the formation, EIN documents), you may not be able to open an official business checking account, so all I want you to do is open a separate personal checking account to use for all of your business deposits & expenses. If you are looking for an online personal bank account - I highly recommend ALLY. You can sign up for that HERE).

Looking for a bank to use for your small business can be overwhelming! 

Maybe you are not having a great experience with your current bank, and the thought of switching just has you frozen. Maybe you are just starting out with your business, and the search for a good bank has left you racking your brain. 

As a bookkeeper, I have navigated MANY different bank accounts. I have personally used a local bank, but as someone who travels all the time, I made the switch to a completely online bank a couple of years ago… and let me tell you I AM HOOKED! 

The Best Online Bank Account for Small Businesses

DRUMROLL…. 

Relay Financial! 

Like I said I have personally been using Relay for two years, and the features just keep getting better!

It is a bank designed FOR small businesses with the small business owner in mind. So let me list just a few of my favorite features

  1. Completely online with amazing support! There is no need to step foot in a bank, and anytime I have needed support, it has been quick and has resolved any issue I did have. 

  2. NO HIDDEN FEES. And NO minimum balance requirement. Can I get a heck yeah!? While they do have tiers for different features, I see no reason why any small business owner couldn’t use the free tier! 

  3. 20 Checking accounts. Easily open/close up to 20 checking accounts to organize your money however works best for your business! And NO minimum balance requirement

  4. Savings accounts. Open up to two savings accounts and earn interest based on the tier subscription you have. 

  5. Easy Payments. Easily transfer money to yourself, pay contractors via ACH, schedule wire transfers 

  6. Debit Card/Virtual Card. You can have a physical and virtual debit card! Use the virtual card for all of those online payments and never worry about losing it! 

  7. Bookkeeper Access. I may be biased on this one, but the bookkeeper access on Relay is one of my favorite features.. From ease of use on my end to how easy it is for clients to add me. It is just perfection. 

  8. Easy to navigate. The simplicity of this online bank makes it so easy to navigate even with all of the features! Plus the app you can have on your phone is just as easy. 

  9. Receipt Management. Get a text anytime you have an expense with a reminder to upload a receipt! 

  10. Credit Card. Relay recently started offering a credit card! I love using a credit card to get cash back, and if you don’t want to have multiple accounts using their credit card is a great option with cash back starting at 1% on all purchases

Honestly I could go on forever about all of the features they have. Get a full list of everything Relay has to offer for your small business. 

Several of my clients are using Relay, whether I helped switch them over or they came to me already using it, and here is what they have to say:

  • “It was a Seamless transition. I never need to troubleshoot anything or had hangups like I have with other banks. I can move money quickly and often.” 

  • “It’s the easiest way to keep track of everything.”

So if you have been on the fence about switching to a new online bank because your dad’s local bank just isn’t cutting it for your small business 

*this blog contains affiliate links - Which Means I Make A Little Money If You Sign up using my links*

Elli Van Treeck