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Does (Truly) Free Business Checking Exist? | SMB Forum by

It’s a fact: having a separate business checking account for your company makes it easier to separate your business finances from your personal ones. Come tax season, you’ll find it easier to identify your expenses and income if you have a dedicated account for all business transactions (as well as use smart accounting software).

You, like any savvy entrepreneur, love free things. You see ads for free checking and you’re intrigued. But are free business checking accounts really free? It’s important for you to really understand what’s involved with a “free” checking account, because sometimes the fine print proves that nothing in life is truly free.

Assess the Requirements

Some free accounts require you to have a high balance to maintain your free status. Others, while they don’t charge a monthly fee, nickel and dime you for other things like making cash deposits, completing more than a set threshold of transactions, or using online banking.

When shopping for a small business checking account, be sure to read between the lines. What’s the catch for the free account? What fees can be incurred under which circumstances?

Get Professional Advice

While it’s a good idea to sit down with the small business banking account manager at the bank you’re considering, realize that his job is to sell you on an account, free or otherwise. He can answer any questions you have about specific account features, but don’t feel cornered into making a decision on the spot. Consider this like a job interview, and speak with a few other candidates before making a choice.

Also, look elsewhere for good advice. You can speak with a SCORE mentor or a finance expert at the SBA. You can read reviews of business checking accounts online or even poll your social media followers to get the scoop on who they recommend, and who they say to stay away from.

Strategize to Stay Free

Once you know what the stipulations are to maintain a free checking account, consider whether you can adhere to them. Are you able to maintain the minimum balance to avoid monthly service charges? Can you be smart about the number of transactions you make each month? Can you minimize your cash deposits?

It’s worth asking your new banker for tips to avoid fees. Sometimes it’s as simple as linking your checking account to a savings account or utilizing a debit card with your business checking account.

A Good Compromise

Even if the days of the truly free checking account are long gone, there’s another option to consider. Many banks offer special promotions to new customers opening business accounts. So while you might have to pay $10 monthly in service fees, you might get a $200-500 bonus just for opening the account, which can offset that service fee for a few years. If you invest that promotional bonus wisely, you can stretch it out to continue to cover those service fees for even longer.

Tips for Choosing the Right Business Checking Account

Aside from trying to find the best price on service fees for your account, there are other considerations to think about. If you send wire transfers regularly to vendors in other countries, you may pay a hefty fee for each transfer, depending on the bank. It’s not worth a $5 a month service fee if you have to pay $50 or more each time you send a wire transfer, so factor that cost in.

If you make frequent cash deposits, you’ll want a bank that’s convenient to get to from your business, and one that isn’t constantly crowded. Mobile checking and the ability to deposit checks from your phone is a definite plus for the tech lover, and one to add to your “must have” list.

Some banks charge if you have more than a certain number of transactions each month. If you’re constantly moving money in and out of your account, make sure you won’t have to pay for the privilege.

And if you travel frequently for business, it’s nice to be able to access a network of branch locations for your bank. If that’s not possible, does the bank waive any ATM fees if you take money from another bank? What about international fees for ATM withdrawals?

There are other considerations, like how well the online banking interface integrates with your accounting software. Being able to automatically pull transactions from your bank and process payments makes life a lot easier. Also, if you need debit cards for employees, is that available?

Paying something for your business checking account is likely, but if you’re smart about it, you can lower that fee or keep from suffering excess charges. Your relationship with your bank is one that you’ll have for the foreseeable future, so make sure that you feel good about your decision.


Photo by Robert Bye on Unsplash

Author information

Marc Prosser

Marc Prosser is the co-founder and chairman of Fit Small Business, a leading digital resource for small businesses that reaches over 2.5 million unique readers a month. Prior to starting Fit Small Business, Marc was the CMO of FXCM for ten years.