Deposits, Withdrawals, and Transfers

If you’ve made it to this article, then that means you’ve successfully started your own business and landed your first client. Congratulations!

Now you have to assess how often money is moving into and out of your small business checking account, and how it is moving. If you’re a business that largely relies on digital transaction and whose revenue largely comes in online, then a free online business checking account will likely be the best option for your business.

However, if your clients often pay you by check, you’ll want a bank that allows you to make deposits with a smartphone app. Or, if you’re a freelancer who is typically paid by direct deposit or electronic transfer, you’ll need to be able to easily accept electronic transfers, and confirm when direct deposits are made.

You might even run a brick-and-mortar business with a lot of daily sales, and that means it could make more sense to use a brick-and-mortar bank. Physical bank locations offer services such as overnight deposits that may be more important to your business needs than any online features.

Small Business Banking Fees

Every small business needs a bank account, and it needs to be this way because you need to make sure your business and personal finances are SEPARATE. Not having these two account separate can make things very confusing when it comes to tax season, and could even attract unwanted attention from the IRS, so it’s better to just keep things separate.

However, you need to make sure you’re banking with the right people and that your banking fees are going toward things that are essential. Especially if you’re just starting out and cash is tight, banking fees matter.

Even if your small business checking account is “free,” you could be charged extra depending on how you use it. The fees you’re charged, and how they’re incurred, can differ significantly from bank to bank.

For instance, you may be charged fees for:

  1.       Failing to maintain a minimum balance
  2.       Making too many deposits and withdrawals
  3.       Not using your account frequently enough

None of these are charges you want to receive without notification. That`s why it`s best if you assess all your options before committing to any one business or institution

Size Matters

The one thing you need to keep at the forefront of your mind, which will also affect the way your bank deals with you, is how big they are and how many clients they have. Fortunately, in our current climate, small businesses have many banking options.

Small local banks

When it comes to small, local banks, your best option is likely your local community bank. This could be a good fit if your top priority is personalized service. If you`re a smaller business, this may be the way you`re used to dealing with your own clients, and therefore may be what you`re hoping for at this stage for your own banking needs.

Medium-sized regional banks

Banks that serve your state or region are a better fit for medium-sized businesses, or small businesses with aggressive growth strategies. Once again, this likely will depend on the growth of your own business, and therefore will rely heavily on your own comfort level.

Large, national banks

If you need low fees and the latest online banking tech, you’ll probably want to sign with a big bank. Plus, they usually have the best signing offers.


Just as there are so many online marketing courses, there are plenty of free online business checking account options, and most do not require a deposit to open an account. And even banks that do require a deposit, some of them only require amounts as low as $1. If this is the right option for your business, it is affordable and a great investment for your business.

In the end, the things you want to ask yourself when it comes to what company you want to bank with for you small business or SMMA are:

  • How will my client pay?
  • If by check, does the bank have a mobile phone app that allows mobile deposit?
  • Are there many clients that prefer to pay digitally?

Your choice of bank must be able to accept electronic transfers, direct deposits, or any other mode of payment that you think your clients will be eager to pay you with.

Consider the perks

We can’t deny that banks want your business, so sometimes the offers they put forth may seem appealing, like a cash bonus, but keep in mind your day-to-day banking needs. In the long term, these will have a bigger impact on the health of your business than any immediate cash benefit or any other incentive they may try to persuade you into.

It’s also important to remember the benefits that online banks can lend you, such as paperless service. For most online banks, it’s standard to offer e-statements, which make it easy to subscribe to online instead of receiving physical paper statements. For the digital-minded individual, online banking will send you an email alert or mobile alert that will let you know that it’s time to reconcile your bank account.

How to Open an Online Business Checking Account

Some banks may require you to visit their physical building local branch to verify your business, but there are some that will allow you to open your account easily online. However, remember that when it comes to anything online, there are so many people eager to scam others, so make sure you do your research—a Google search, a review, anything you can.

Once you’re directed to an online bank’s website, you’ll likely be directly to a log in, where you can select the option to open a business account. Here, you’ll likely be asked whether you’ll be opening a checking or savings, or both. Select which option works for you, and then enter your business’s information. This will likely require an EIN (Employer Identification Number), a confirmation of your identity, an initial deposit ($1-$100 depending on the bank). After this, you should be ready to bank with your chosen online bank.

Some of the benefits to banking online include:

  • No minimum balance requirements
  • No monthly service fees
  • No processing fees

Small Business Tax

When you’re starting your own business, one of your first concerns should be how you’ll get through your first tax seasons. Business owners are obligated to pay specific federal taxes, and the amount of those taxes is determined by the form of business entity that you establish.

All businesses, except for partnerships, need to file an annual income tax return, and partnerships file what’s called an information return. Any business that’s owned and operated in the United States needs an Employer Identification Number (EIN), which you can apply for on the IRS’s website.

When you have employees, you (as the employer) have certain employment tax responsibilities that you need to pay, as well as forms you need to file. You cannot neglect your responsibilities as an employer just because you’re a new business.

If you don’t have employees, you can also simply elect to be treated as a sole proprietorship for tax purposes and use your social security number as your EIN.

The biggest thing you need to remember is that there are awesome free options for business checking online. That is the best option for small business owners because everything is paperless and there usually aren’t any fees associated. We all know that capital can be hard to come by when you’re just starting out, so make sure you’re considering all of your options, and not just the traditional path that earlier generations may have chosen. However, we are at a time where banks are being very competitive, so make sure you’re always doings your research and checking out all of your options.

If you’re eager to learn more about how to budget your small business or social media marketing agency, then check our SMMA Budgeting Template. And if you want free educational content about how to run your own business or Digital Marketing Agency, then follow us on Instagram, Facebook, and YouTube, or visit our blog for FREE training materials!