Small business have different financial needs especially when it comes to managing daily transactions, paying suppliers and planning for growth. Choosing the right business bank account is key to smooth cash flow, access to funds and setting up a solid financial foundation. This guide will go through checking account options for small business, what to look out for and banking solutions for different business types. Let’s get into each section to help you decide.
What to Look Out For
Choosing a business bank account requires knowing your business needs, transaction habits and financial goals. Here are some to consider:
Business Needs and Goals
Every business has different financial goals. For example if your business is cash based you’ll want a bank with a strong branch presence and low cash deposit fees. If you’re an e-commerce business you may want online banking features. Knowing your needs will help you choose an account that supports growth and aligns with your financial plan.
Types of Transactions You’ll Be Making
Consider the volume and type of transactions, cash deposits, wire transfers and online payments. Some accounts have unlimited electronic debit and credit transactions while others charge per transaction. Accounts that match your transaction habits will save you money and make financial operations smooth.
Look for No or Low Fees
Minimizing monthly fees and transaction costs is crucial for small business with limited budget. Some accounts have fee waivers if minimum balance requirements are met. Others have no monthly maintenance fees at all which can reduce operational costs big time.
Interest Rates and Rewards
Interest bearing accounts especially for business savings can grow your capital. Some banks also have rewards programs that gives you cashback or perks for specific types of transactions or purchases. These benefits can add value if you have big balances or frequent expenses.
CDIC Insurance
To be safe, check if the account is insured by Canada Deposit Insurance Corporation (CDIC). CDIC insurance covers deposits up to a certain amount so you have peace of mind in case of bank failure or insolvency.
Business Bank Accounts
Knowing the different business bank accounts will help you choose the one that suits your financial and operational needs.
Business Chequing
Used for daily transactions, business chequing accounts is a convenient way to manage cash deposits, vendor payments and payroll disbursements. These accounts have low transaction fees and unlimited electronic debit and credit transactions. Most business bank accounts have monthly fees and transaction limits but some have no monthly fees.
Business Savings
For businesses that want to earn interest on excess funds, a business savings account is the way to go. These accounts help you achieve long term savings goals, earn on idle cash and have it available when you need it.
Business Credit
Linked to your business bank account, a business student credit card or credit line helps you manage short term expenses or financing gaps. Useful for occasional or unexpected expenses without affecting cash flow.
Business Investment
If you want to grow your funds over time, business investment accounts may have high interest rates and access to a mix of investment options. These are good for businesses that want to diversify their assets.
What to Look Out For in a Business Bank Account
Knowing what to look for in a business bank account will get you the most value for your money. Here’s what to consider:
No or Low Monthly Fees
High monthly fees will eat into your profits. Many banks have low fee options or waive fees based on balance requirements. An account with no or low monthly fees is a big plus especially for startups and small business looking to reduce expenses.
Unlimited Transactions
Businesses with high transaction volume should look for accounts that have unlimited transactions. This feature allows you to transact without worrying about per transaction fees, good for high volume businesses.
High Interest Rates
If you have big balance in your savings account, look for accounts with competitive interest rates. This feature allows you to earn more on your capital while it’s still available for business use.
Rewards Programs
Many banks have business rewards such as cashback on purchases, lower loan rates or discounts on services. These benefits can add value if your business has regular expenses.
Digital Banking
Online and mobile banking makes account management easy, you can access your account, pay bills and monitor transactions remotely. Look for accounts with robust online and mobile banking platforms with tools for easy transfer and secure access.
Business Banking Experts
Access to business banking experts is good for personalized advice and support. Experts can guide you through financial products, manage cash flow and make banking decisions that supports your business goals.
Small Business Bank Accounts
Many banks have business accounts for small businesses. Here are some top options based on business needs:
Top Business Bank Accounts
- RBC Ultimate Business Account: Flexibility and rewards program, good for general business use.
- TD Business Chequing Account: Low fees and high interest savings, good for businesses that want to save.
- CIBC Business Chequing Account: Robust digital features for online and mobile banking, good for tech businesses.
Business Bank Accounts for Specific Needs
- Jeeves Business Account: Good for e-commerce businesses with low foreign transaction fees.
- Airwallex Business Account: Affordable foreign exchange services, good for international businesses.
- CIBC Not-for-Profit Operating Account: For non-profits, easy fund access and low fees.
Fee Free Business Accounts
For businesses that want to keep costs low, fee free accounts are the way to go. Here are some top options:
Top Fee Free Accounts
- Loop Basic: Low foreign transaction fees and rewards, good for startups.
- Vault: Customizable corporate cards and low fees, good for businesses that need flexibility in expenses.
- Wealthsimple Save for Business: High interest and no monthly fees, good for savings oriented businesses.
Digital Banking
Digital banking is a must for modern businesses, for quick and easy access to accounts and transactions.
Digital Sign-Up and Online Banking
- EQ Bank Business Account: Digital sign-up, good for tech businesses. Many banks now offer business account sign up online which can be done in under 15 minutes.
- Tangerine Business Savings Account: High interest and user friendly online features, good for digital businesses.
How to Apply for a Business Bank Account
To apply for a business account you will need specific documents and follow a process. Here’s what you need to know:
What You’ll Need
- Business registration documents to prove your business is registered.
- Owner identification to verify.
- Business address proof, utility bill or lease agreement.
It’s better to have a business account instead of a personal account to keep your finances separate and tax obligations simple.
Apply
- Online: Many banks allow you to apply online, easy and quick.
- In-Person: Visit a branch to talk to a specialist in person.
- Phone Application: Some banks offer phone applications, personalized guidance from a specialist.
Business Banking Specialists and Support
A business banking specialist can help set up accounts, advise on products and help with financial planning. Specialists can be reached by phone, in-person or online so you have support as you grow your business.
What to Expect from Business Banking Specialists
Business Banking Specialists are experts who can help you through the world of business banking. They know all about business accounts, chequing, savings, foreign currency and cross border accounts. When you work with a Business Banking Specialist you can expect personalized service, expert advice and tailored solutions for your business needs.
Some of the services you can expect from Business Banking Specialists:
- Help you choose the right business account for you: Whether you need a basic chequing account for daily transactions or a high interest savings account for surplus funds, a specialist can guide you to the best option.
- Set up and activate accounts: From gathering documents to completing the application, specialists will guide you through the process.
- Manage your business finances: Get advice on cash flow management, budgeting and financial planning to keep your business on track.
- Optimize your business banking: Learn how to use your bank’s features, online banking and mobile apps.
- Access specialized products and services: Need a business loan, credit card or investment account, specialists can connect you to the right product.
By working with a Business Banking Specialist you can get to know your business banking options and make informed decisions about your financial future.
Easy Banking
- Online and Mobile Banking: Access your account, pay bills and track transactions anywhere, perfect for on-the-go business owners.
Business Account Fees
Every business bank account has fees. Knowing these fees helps you make informed decisions.
Monthly Fees and Transaction Costs
- Many accounts have monthly maintenance fees, some waive fees based on balance requirements.
- Transaction fees such as wire transfers or ATM withdrawals can vary and add to the overall cost.
Savings Account Interest Rates
- Business savings accounts have higher interest rates, which can be extra income for your business. Look for accounts with competitive rates on savings.
Interest on Your Business Account
Earning interest on your business account is a great way to grow your savings and increase your bottom line. Many business accounts, including EQ Bank and Tangerine, have competitive interest rates to make your money work for you.
When looking for an interest earning business account consider:
- Interest rate: Look for accounts with high interest rates, like EQ Bank’s 3.00%. Higher rates means more earnings on your idle funds.
- Minimum balance: Some accounts require you to maintain a minimum balance to earn interest. Make sure you can meet these requirements consistently.
- Fees: Be aware of any fees associated with the account, monthly maintenance fees or transaction fees that can eat into your interest earnings.
- Accessibility: Look for accounts that give you easy access to your funds, online banking or mobile banking apps. So you can manage your money on the go.
Earning interest on your business account means you can make the most of your hard earned money and achieve your goals.
Protect Your Business Account
Security is key when it comes to business finances. Here’s how to keep your account safe:
CDIC Insurance
- CDIC insures deposits up to a certain limit, so your funds are protected in case of bank failure.
Security
- Choose an account with strong security features, two-factor authentication and encrypted online banking to prevent hacking.
Manage Your Business Account
Managing your business account efficiently can simplify financial tasks and help you focus on growth.
Online and Mobile Banking
- Digital banking platforms give you access to account statements, transaction history and balance updates, handy for monitoring cash flow.
Account Statements and Transaction History
- Review statements regularly to track spending and stay on top of your financial health.
Business Account Customer Support
- Banks usually have dedicated customer support for business clients, available by phone, email or in person to help with account questions.
Alternatives to Traditional Business Bank Accounts
If traditional banking doesn’t work for you, consider these:
Fintech Business Accounts
- Fintech companies offer digital only solutions with lower fees, perfect for startups and businesses that want flexibility.
Credit Union Business Accounts
Credit unions offer community focused banking, often with lower fees and competitive interest rates. Sole proprietors can use a personal account for business but it complicates financial management and tax obligations, a business account is the way to go.
Business Accounts for Specific Industries
Different industries have different financial needs and business accounts can be designed to meet those needs. For example:
- Non-profits may need accounts with low fees and flexible transaction limits so more funds go to their mission.
- E-commerce businesses may require accounts with high transaction limits and competitive foreign exchange rates to handle frequent online sales and international transactions.
- Small businesses may need accounts with low minimum balance requirements and easy access to credit to support their growth and operational needs.
Some business accounts are designed for specific industries:
- RBC’s Not-for-Profit Operating Account, low fees and flexible transaction limits for non-profits.
- TD’s eBusiness Plan, unlimited electronic transactions and competitive foreign exchange rates for e-commerce businesses.
- EQ Bank’s Business Account, high interest rates and easy access to credit for small businesses to maximize savings.
Choose a business account that fits your industry and you’ll manage your finances better and achieve your business goals.
