The 5 Best Business Checking Accounts

Casey Bond

There are so many important decisions to make as a small business owner: whom to hire, how to market your product and also where to bank. The seemingly simple decision of choosing a checking account for your business is actually a very important one.

Business checking accounts typically function the same way as personal checking accounts, says Shannon McLay, CEO and founder of The Financial Gym, a personal finance service. "The main differences can be found in the service fees, transaction limitations and balance requirements," she says. "Another main difference is that business checking accounts have the capabilities to extend debit cards to additional users, so companies with multiple employees are able to make purchases and withdrawals from the business account."

Plus, customers can pay the business directly, rather than you personally, which elevates your professionalism and trustworthiness.

In other words, choosing the wrong account can spell wasted money and a ton of headaches for you and your employees. On the other hand, selecting the best checking account for your business means you don't have to worry about day-to-day banking and can focus on what's important.

However, you might be wondering why you can't simply use the checking account you already have for personal banking.

McLay says it's recommended to keep your business and personal finances separate for many reasons. For example, by having your business expenses in a separate account, you can quickly and accurately report your income and identify your tax-deductible expenses come tax season. "If your business is registered as an LLC or corporation, separate checking accounts protects your liability, since it is much easier to distinguish the difference between your business and personal assets," McLay says.

She adds that separate accounts also allow you to quickly assess how your business is performing and if it's generating enough revenue to cover costs. "It's necessary to figure out the business cash flow to understand what you can afford to pay yourself and when you can give yourself a raise," McLay says.

[Read: Best Checking Accounts.]

What Makes for a Good Business Checking Account?

When choosing a business checking account, carefully compare several options and look for financial institutions that offer affordable, robust services that meet the unique needs of your business. Below are some of the main factors you should look for in a business checking account:

Low fees. According to Priyanka Prakash, senior staff writer at Fundera, an online marketplace for small business loans, one of the most important factors to look at in a business checking account is fees, which vary widely depending on the bank and the account. " Digital banks typically charge no fees or very few fees," she says, noting that some national banks tend to charge higher monthly service fees, transaction fees and overdraft fees. That said, you can find banks of all types that offer low fees or even free accounts.

Low opening deposit and balance requirements. Unlike personal checking accounts, business checking accounts often require a higher minimum deposit to open an account. Additionally, you usually need to keep a fairly high balance in the account to avoid a monthly maintenance charge. The best business checking accounts will keep these minimums low, allowing more businesses access to a low-cost option.

Nearby branches. If you have a physical retail location or deal with many cash transactions, Prakash says you should consider a bank with branches and ATMs near you. "An online business will probably be fine with a digital, online-only bank," she says.

Quality of online banking. These days, online banking is a must, whether you're a small mom and pop shop or mega online retailer. The ability to quickly transfer funds, deposit checks and pay bills will ensure your business operates as smoothly as possible. Additionally, "make sure to research if the bank's software is compatible with the software and tools you use for accounting and accepting payments," McLay says.

High limits on monthly deposits and transactions. Business checking accounts tend to limit the number of cash deposits and transactions you can make in a month for free. For example, you might be allowed up to $5,000 in deposits and 100 transactions per month, after which you'll be charged a fee per additional transaction. If your business handles a lot of transactions, high limits in these areas will save you money.

Access to other products and services. Businesses need many more services beyond checking. For instance, you might want to open another type of account or borrow money. Having an existing relationship with a quality bank that offers what you need makes finding and getting approved for these other services much easier.

[Read: Best Savings Accounts.]

The Best Business Checking Accounts

Now that you know what types of features you're looking for in a business checking account, learn more about some of the top-rated accounts available.

Chase Total Business Checking Account

Monthly fee: $12 with paperless statements, or $0 if minimum balance is maintained

Minimum opening deposit: $0

Minimum balance required: $1,500 to waive monthly fee

Best for: Businesses looking for a full-service bank that has low minimum requirement

Chase Bank's Total Business Checking account is popular among businesses of all sizes. Considering Chase's national presence, with more than 5,000 branches and 16,000 ATMs across the country, help with your banking needs should never be out of reach. Plus, the minimum balance to avoid a monthly fee is easy to meet. Account holders are allowed up to $5,000 in cash deposits per statement cycle without a fee, as well as 100 free transactions per month.

Capital One Spark Business Basic Checking Account

Monthly fee: $15, or $0 when minimum balance is maintained

Minimum opening deposit: $250

Minimum balance required: $2,000 to waive monthly fee

Best for: Businesses with high transaction volumes

If you want the breadth of services of a national bank but the convenience of an online institution, the basic checking account from Capital One is a good choice. Though Capital One does cap free deposits at $5,000 per month, one of the best features of this business checking account is that there are no fees or limits on monthly transactions.

Navy Federal Credit Union Business Checking

Monthly fee: $0

Minimum opening deposit: $0

Minimum balance required: $0

Best for: Business owners who prefer to work with a credit union

Credit unions are known for their many benefits, including low fees, competitive interest rates and not-for-profit status. Navy Federal Credit Union is a national credit union, meaning you get big-bank services with small credit union service. NFCU is part of the Co-Op Network, which gives account holders access to 30,000 ATMs nationwide. In order to open an account, you must be a Navy Federal member. Membership is open to active duty military members and veterans and their families, plus Department of Defense employees. The account does have a pretty low maximum number of transactions, at just 30 per month; if that's too low for you, consider upgrading to a premium account.

[Read: Best CD Rates.]

Novo

Monthly fee: $0

Minimum opening deposit: $50

Minimum balance required: $0

Best for: Tech-savvy entrepreneurs

Novo, an online-only banking platform designed for small-business owners and entrepreneurs, charges absolutely no fees to open or maintain an account. Plus, it's extremely mobile-friendly, allowing you to do things like deposit checks, perform transfers and pay bills from your phone. The Novo debit card is accepted worldwide, and your account dashboard integrates with other business tools you already use.

TD Business Simple Checking

Monthly fee: $10

Minimum opening deposit: $25

Minimum balance required: $0

Best for: Businesses with a strong Canadian presence

TD Bank offers simple checking for businesses with low fees and minimums. Plus, with branches across the East Coast and Canadian provinces, it's a great option for businesses that operate in both New England and our neighbor to the north. This account option allows up to $5,000 in cash deposits and 200 transactions per month with no fee.

Casey Bond is a seasoned personal finance writer and editor. Her work has appeared in a number of major national publications including U.S. News & World Report, Yahoo Finance, MSN, The Huffington Post, Business Insider, Forbes and others. Follow her on Twitter @CaseyLynnBond.