How to Choose Your First Business Checking Account

As a new business owner, to say you have a lot on your to-do list is basically the understatement of the century. You have to register your business, file endless stacks of paperwork, make sure that your business model is rock solid—and still eat, sleep and breathe. But before you can really get down to work, one of the first things you need to do is open a business checking account.

And as simple as this might sound, you can easily get caught in the sea of options. Some accounts come with free wire transfers but make you pay hefty monthly maintenance fees, while others may waive fees in exchange for a daily balance that’s way too high for your business to afford.But although there are many business bank accounts out there, determining what to look for in your first business checking account is actually simple. Just determine what you truly need from your bank.

Whether you’re running a brick-and-mortar flower shop or a digital-only marketing consultancy, there’s a business checking account that’ll serve you well without overloading you with unnecessary features or high monthly costs. But like most other things you’ll encounter as a small business owner, the devil is in the details.

To Find the Right Account, You’ll Need to Know Your Business

Knowing what to look for in your first business checking account means closely examining how your business operates. Do you work mostly in cash or get paid primarily through wire transfers? How many deposits will you need to make per month? And as a matter of personal preference, you’ll need to decide how important it is for you to have local branches in your hometown, state, or across the country.

Before you sign up for your first account, decide which of these features you need in a bank:

  • No high daily balance requirement
  • Ability to make many deposits throughout the month
  • Support from a local branch
  • Worldwide ATM access
  • Modern online banking
  • Acceptance and processing of ACH transactions

Once you know what you need, you can start figuring out which accounts are a better match for you than others. For instance, if you can’t keep a lot of cash on hand, avoid checking accounts that require a high daily balance. And if you foresee yourself depositing money often, you’ll want to seek out an account that doesn’t limit the number of deposits.

Narrowing down your must-haves and don’t-needs is a great way to weed out the products that aren’t a fit for you and your company, and identify the ones that could make your life a lot easier.

Research Now for a Better Experience Later

Most people—and businesses, too—tend to stay with the same bank year after year. According to researchers at J.D. Power and Associates, only 7% of small businesses change banks. But when problems arise, small business owners are happy to jump ship, even if it’s not the easiest thing to do.  Data from that same survey included that 22% of fast-growing small businesses are willing to switch their banking providers due to inadequate customer support.

It’s much easier to pick the right bank at the beginning than it is to switch as your business expands and your needs change. And since most of these problems won’t affect you until your business is a bit more established, use the time you have now to avoid setting up an account that isn’t right for your company in the first place.

Compare similar accounts at different banks, talk to employees at local branches, and see what other companies in your industry are doing. Doing the legwork up front to ensure you know exactly what options are out there will help prevent you from having to change course down the road.

Future-Proof Your Banking Needs

Since you can’t predict your business’s future, the best thing you can do for is prepare yourself to take advantage of a wide number of scenarios. And that particularly applies to your first business checking account (glamorous as it may sound).

You’ll want to think about not only the benefits of your current account, but what other options your bank provides down the line. If you find that you’ve maxed out on the number of monthly fee-free transactions, or you need an account that’ll allow you to make and receive international wire transfers, you might find that your existing checking account isn’t working out as well as it did before. In this case, give a hard look at a bank with a variety of business checking accounts—especially if your company is growth minded.

Most large banks will offer anywhere from two to four different account types, each targeted toward companies of differing sizes and cash flow requirements. Plus, most banks will let you transition your existing account into another one of their products without causing major disruptions to your business’s finances, which means that you can avoid the unnecessary work and hassle of changing banks altogether.

Lastly, Add it All Up

Starting a new business means making a series of decisions that are far from straightforward—and are often downright confusing. But the amount of work you put in now will pay off by way of fewer headaches down the line.

This goes for picking the right business checking account for your company, too. By doing your homework, research, and due diligence, you can set yourself up for success with the kind of bank that fits your business. Plus, as you continue your journey to becoming the next titan of industry, you’ll take comfort in knowing that you picked a bank that’s ready to grow alongside you.

Meredith Wood is the Editor-in-Chief at Fundera, an online marketplace for small business loans that matches business owners with the best funding providers for their business. Prior to Fundera, Meredith was the CCO at Funding Gates. Meredith is a resident Finance Advisor on American Express OPEN Forum and an avid business writer. Her advice consistently appears on such sites as Yahoo!, Fox Business, Amex OPEN, AllBusiness, and many more.