Business Bank Account Suggestions


11

Recently, my partner and I created an LLC and have secured about 30K in capital to start our online company. We are in the process of choosing a bank to work with and would appreciate some guidance. I believe we should set up a corporate savings account (for the bulk of the 30K) and set up some type of business checking account for day to day operations. Also, we will be taking in membership fees (probably using authorize.net) and I'm not sure if that money should flow into a separate account all together - or the checking or savings account I mentioned opening above.

Any guidance as to good banks to choose with low (or no) fees for small business would be much appreciated.

Thank you,
Scott

Bootstrapped Finance Business

asked Jan 5 '10 at 01:52
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Scott Blanc
90 points
Get up to $750,000 within 24 hours with a small business loan from Clarify Capital
  • Food for thought - perhaps irrelevant but worth adding - I live and operate in NYC. Some of the answers reference a "local bank". I operate an online business and do all banking online as it is. I will not be taking a loan from this bank anytime soon as I've bootstrapped enough money to take this thing off the ground. Any issues with working across states? – Scott Blanc 10 years ago
  • I'm amazed that you got 30K in investment and have no bank account to receive that? Sounds great. Did they wire it to your personal account? That takes a lot of trust! Good luck with your venture! – Newyuppie 9 years ago

8 Answers


8

Those fees really add up and you will have to do some research comparing rates locally specifically for the type of business you are going to do. Note that national banks have different schedules in different states.

We are in Seattle and I had to resort to a two bank solution:

Bank of America for day-to-day operations. They work for us because they:

  • Clear checks the same day
  • Do not charge us transaction fees
  • Their branch is located within walking distance to the office
  • Have branches and ATM machines everywhere in the US which is helpful when travelling on business
  • Support receiving international wires
ING Direct business account for reserves. This is because:

  • Much higher interest rate than BOA (thousands of dollars difference for us)
  • No fee for incoming domestic wires (another thousand dollars or so in savings over BOA)

I re-evaluate our banking choices yearly.

answered Jan 5 '10 at 06:01
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Oleg Barshay
2,091 points
  • Thanks! This was helpful. Can anyone comment on the solution they have gone with for a NYC based company? Another member mentioned Chase... I am evaluating that now but open to other local suggestions and reasoning. Thank you, SB – Scott Blanc 10 years ago
  • My company used to be based in NY. At the time Chase was a nickel-and-diming nightmare (and I bet it still is). I eventually settled on Commerce Bank which had the best fees and was open late and on Sundays. I hear Commerce has been acquired by TD Bank since then. – Oleg Barshay 10 years ago

5

I just setup an account through a community bank. I figured, as a small business person, I should support local businesses. I used http://moveyourmoney.info/ to find a local bank that was rated well. I ended up with The Mechanics Bank, which is local to the San Francisco Bay Area. So far, so good. The big selling point for Mechanics Bank was that they had totally free business checking.

answered Jan 5 '10 at 03:47
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Jarie Bolander
11,421 points
  • +1 When I started my business 10 years ago, I did the same thing. My local bank was much more responsive than the larger banks. About 2 years ago, my business outgrew that small bank (they couldn't extend me a large enough line of credit), so I had to switch to a bigger bank. But for the first 8 years, the local bank worked great. – Michael Trafton 10 years ago

3

I would stay away from the Bank of America, Citi, Chase, and any other large banks (unless you like to be treated like just a number and pay high fees). You can get same services and access to tech (online banking, remote deposits, etc.) for less money. Many community banks have free small biz checking too.

In two of the startups I headed operations we have moved away to small banks and never looked back. At a big bank you talk to a branch manager with no real power, at a community bank you can talk to a real VP with real decision making power.

Also, do not forget it is never too early to build relationship with the decision makers at your local bank, because come time for credit and you will have MUCH easier time clearing the hurdles.

answered Jan 5 '10 at 15:44
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Apollo Sinkevicius
3,323 points
  • thank you, great feedback. Anyone have a local community bank in NYC they recommend? – Scott Blanc 10 years ago

2

My wife has a business and set up a Chase business account for her LLC. She has both checking and Savings accounts and chose the Continental debit card as it give sher miles for all purchases she changes to the card. Since we live in the NYC Metro area this made sense as Chase branches are everywhere. So far, my wife is happy with Chase.

answered Jan 5 '10 at 02:09
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Ron M.
4,224 points
  • can you comment on the fees associated with Chase. I looked into the Savings account option for the bulk of our cash - roughly 20K. If I'm reading it correctly they have a 5 dollar a month savings account or a 15 dollar a month, higher yield account. As far as savings goes, it seems there isn't any fee either. Just that you have a limit of 200 transactions a month. SB – Scott Blanc 10 years ago

2

You might want to take a look at the top 100 banks in the US as a consideration. Some of the big banks like Bank of America and Chase are not performing really well. Like what others have said, some local banks might be more suitable for your case.

answered Jan 7 '10 at 10:03
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Jpartogi
1,342 points

0

I also chose a local community bank because they had no fees. I refuse to spend money each month for banking fees. It is obscene.

answered Jan 5 '10 at 03:56
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Tim J
8,346 points

0

Are either of you good and/or experienced at accounting/financial management? If it were me, since financial management isn't one of my own talents, I would definitely keep your income, assets and expense accounts separate at the level of the bank accounts themselves. It is conceptually/ontologically easier to manage the separate categories of financial activity if they correspond to distinct bank accounts. So this is another reason for going for a low-fee/no-fee bank - you won't have to pay higher fees to set up additional accounts or transfer sums between accounts. You might want to use a hypothetical tax return as a guide for setting up your accounts. Whatever major asset, liability, income and expense categories you will have to report on, you may want to consider setting up distinct accounts for those. This will simplify your reporting process at filing time, since your bank statements will already match the different categories you must report on.

answered Jan 5 '10 at 05:07
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Neil La Chapelle
51 points

0

On the sayings side, especially if money is just going to sit there, I agree with the Oleg and ING or some other high interest savings account. Check out bankrate.com, I think it is, for the banks with the highest offered rates. Many of the non-brick and mortars will be able to out do their bigger brethren, especially the web-only banks.

I would like to add that I've worked with the same banker at Bank of America for the last 5 years. She drafted our original accounts docs and we still work together to this day. So it's not impossible to have a lasting relationship with someone at a big bank. Of course, she's not the bank VP or even anything close.

answered Jul 19 '10 at 15:28
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W Wonka
26 points

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