October 20, 2022
Investors Bank Business Checking Review 2022
If you’re looking for a traditional bank with low cash deposit fees that caters to small businesses with low and moderate business volume, Investors Bank is a great choice. It has more than 150 branches in Pennsylvania, New York, and New Jersey and offers two business checking accounts: YourStyle Business Checking and YourStyle Business Premier Checking. Both have waivable fees and provide generous free monthly transactions at 250 and 500, respectively. The bank also has online and mobile banking access and Merchant Services. How Investors Bank Stacks Up With Its Competitors See fullscreen table × When Investors Bank Is a Good Fit You have low to moderate transaction volumes: You get up to 250 free transactions each month with YourStyle Business Checking. You have moderate to high transaction volumes: With YourStyle Business Premier Checking, 500 free transactions are allocated per month. You receive regular wire transfers: Both domestic and international incoming wires are $10, which cost less than other banks. You also get two free wires when you have a YourStyle Business Premier Checking account. You want low-cost cash deposit fees: Investor Bank offers a fair amount of free cash deposits each month, starting at $5,000 for the basic account and $10,000 for its highest option. If you exceed these amounts, you only need to pay 20 cents for every $100, which is lower than competitors’ cash deposit fees. When Investors Bank Is Not a Good Fit Businesses that want a variety of business checking account options: If you want more choices to meet your specific business needs, you can check out and . Businesses outside Investors Bank’s service areas: Investors Bank has more than 150 branches in Pennsylvania, New York, and New Jersey, but it’s still limited to three states. You can opt for , , or for nationwide branch locations. Business owners that need free business checking accounts: Even if the monthly fees are waivable for Investors Bank’s business checking accounts, the required balances are still high. You can consider , , , and for free accounts as long as your needs can be met by digital-only financial institutions. Check out more providers in our list of the best small business checking accounts if your business meets one or more of these scenarios. Investors Bank Business Checking Overview Investors Bank Business Checking Requirements You can visit a branch to open a business checking account. Only US Citizens or permanent residents who are at least 18 years of age can open an account. You’ll be requested to provide the following information: Contact information Physical US address Valid email address Social Security number Government-issued ID (driver’s license, US passport, permanent resident ID, or state-issued nondriver's ID) Before opening an account, see our guide on how to open a business bank account. It has a free downloadable checklist of required documents. Investors Bank Business Checking Features Investors Bank’s Business Checking accounts offer a debit card, online and mobile banking access, remote deposit capture, and Citizens Merchant Services. Online & Mobile Banking Investors Bank lets you securely transfer funds online, pay bills, deposit checks through your mobile phone, and view your balances. Reviews for the Investors Bank app are good on both the Apple App Store (4.8 out of 5) and Google Play store (3.9 out of 5 stars). Users rated it positively for its simple layout and ease of use, although some had issues with frequent crashes and difficulty logging in, leading to lower ratings. Business Services Citizens merchant services: Traditional or virtual POS terminals, credit card and debit card payment, including Visa®, Mastercard®, American Express®, and Discover®, gift certificate cards, and loyalty cards Treasury management services: Automated clearing house (ACH) payments, wire transfers, payroll and human resources (HR) services, ACH blocks and filters, ACH Positive Pay, Check Positive Pay, zero balance accounts, Demand Deposit Marketplace (DDM) Sweep, account reconciliation process (ARP), and federal electronic data interchange (EDI) reporting Remote Deposit Capture You can skip bank trips and make check deposits in your office with Investors Bank’s Remote Deposit Capture service. It allows you to deposit a batch of checks instead of single items. If you submit your deposits before 7 p.m. Eastern time, your account will be credited on the same day. Other Banking Products Investors Bank has plenty of banking products and services that match the needs of business owners, from money market accounts to small business loans: Business money market: Business owners can choose between opening a YourStyle Business Money Market or Maximizer Business Money Market account. Under YourStyle Business Money Market, you can earn tiered interest rates as your balance increases. A minimum $100 opening deposit is required and a $2,500 daily minimum balance must be maintained to avoid the monthly fee. With Maximizer Business Money Market, you can maximize your business savings with a higher tiered rate by opening $10,000 of new money and maintaining $2,500 as an average monthly balance to waive the $12 monthly fee. Small business lines of credit: For more capital funding, small business owners can apply for lines of credit with terms of up to three years. Businesses can qualify for up to $1,000,000 total credit. Small business term loans: For additional working capital or new equipment purchases, you can apply for term loans with flexible terms of up to 10 years and competitive interest rates. Small business owner-occupied mortgages: For business property financing or refinancing, you can apply for mortgages with flexible terms and competitive rates. Commercial and institutional products: You can open commercial checking accounts and commercial savings accounts. You can also apply for commercial loans for equipment financing, commercial real estate, and acquisitions. Industry solutions: Investors Bank provides public service banking services, healthcare lending services, escrow accounts for landlords and property managers, and banking solutions for nonprofit organizations. Investors Bank Business Checking Pros & Cons Investors Bank provides great business checking advantages with its low cash deposit fees in case you exceed the number of free cash deposits each month. If you receive incoming wires regularly, the fees for both domestic and international wire transfers are low-cost at $10, helping business owners save money. You also get two free wires when you open YourStyle Business Premier Checking. However, opening an account requires heading to a brick-and-mortar branch. Another drawback is there are only two business checking accounts to choose from, unlike other banks. Lastly, the monthly fee for YourStyle Business Premier Checking is substantial at $35, and you need to maintain a combined balance of up to $25,000 to waive the fee. Alternatives To Investors Bank Business Checking Investors Bank has great business checking accounts. However, you’ll have to look elsewhere if you’re interested in generating an APY, want more physical brick-and-mortar branches, or need a fully online bank for more convenient services. Here are three options to consider: is best for business owners needing in-person banking in nationwide service areas. is best for businesses seeking full-service banking from an online-only bank. is best for businesses wanting to earn a high APY when qualifying deposits are met. Bottom Line Opening business checking accounts at is a good choice if your business is located near one of its branches. You can enjoy a high free transaction limit and free cash deposits each month when you open YourStyle Business Checking. If your transaction volume increases, you can switch to the higher-tier YourStyle Business Premier Checking to avoid additional costs. Investors Bank also extends several lending products to small business owners needing financing, making it a great banking option.
October 20, 2022
Rho Business Checking Review 2022
Rho is an integrated financial platform that offers business banking, treasury, corporate cards, accounts payable automation, and more. Designed to help high-performing organizations save time and money, the platform’s business checking account charges no fees for monthly maintenance, automated clearing house (ACH), wires, and checks. Additionally, it has strong perks for businesses that operate internationally. Note that only businesses that have raised $1 million in revenue or equity capital are eligible to open an account with Rho. If your business meets one of these two qualifications, it may be a good option for your company. How Rho Stacks Up With Its Competitors See fullscreen table × *Providers are financial technology (fintech) platforms backed by and Federal Deposit Insurance Corp. (FDIC)-insured through a supporting bank partnership (Evolve Bank or Webster Bank for Rho, Evolve Bank & Trust for Mercury, and 10 program banks for Brex). When Rho Is a Good Fit You need unlimited fee-free transactions: Rho comes with unlimited fee-free checks for all domestic recipients. You make international payments regularly: Rho offers unlimited free international wire transfers to 140+ countries. It charges no fees for foreign card transactions when making purchases where Mastercard is accepted and has a flat 0.60% conversion fee for most currencies and 0.75% for Asia-Pacific (APAC) currencies. You want cash back on credit card purchases: Rho corporate cards earn cash back from 0.75% to 1.75%, depending on when the balance is paid. Balances paid later than 45 days after the date of purchase don’t earn cash back. You require high-yield treasury accounts: Rho offers a treasury account, called Prime Treasury, which earns interest at a rate of 3.05%. However, it’s only available to organizations with more than $5 million in liquid assets. When Rho Is Not a Good Fit You don’t meet Rho’s revenue or raised equity capital qualifications: Only businesses with over $1 million in revenue or raised equity capital are eligible to open business accounts with Rho. offers similar features without revenue or equity capital requirements. You’re a sole proprietor or an unincorporated business: Rho doesn’t offer its services to sole proprietors and unincorporated businesses. You may want to consider , which supports account openings for sole proprietors, limited liability companies (LLCs), limited liability partnerships (LLPs), and corporations. Your business deals with cash regularly: Because Rho doesn’t support ATM transactions and offers no direct support for cash deposits, businesses may only deposit cash through linked accounts. The online-only bank allows cash deposits through Allpoint and MoneyPass machines and reimburses all ATM fees at the end of each month. You want high interest on checking balances: Rho checking accounts only earn interest at a rate of 0.01%. Meanwhile, pays qualified accounts 1.50% interest on balances up to $100,000. If your small business meets one or more of these scenarios, check out our guide to the best small business checking accounts for additional recommendations. Rho Business Checking Overview Rho Business Checking Requirements If your business has generated over $1 million in revenue or has raised $1 million in equity capital, you’re eligible to open a business bank account with Rho. Upon application, you’ll need to prepare the following documents: Business name Address Entity type Employer identification number (EIN) letter issued by IRS Company bylaws Articles of incorporation Local business licenses (only if registered out of state) Each beneficial owner must also provide the following information: Name Date of birth Address Email Phone number Government ID (passport if non-US) Social Security number Rho Business Checking Features Unlimited Fee-free Transactions Rho offers unlimited fee-free domestic ACH, swift wires, and checks. Customizable Account Permissions You can add employees, bookkeepers, and investors to your business accounts. As the main user, you can customize each member’s level of access. Accounting Software Integration Rho has natural integrations with NetSuite and QuickBooks and offers support for Sage and Wave. Expense Management Rho lets you customize spending rules and set spending limits for team members. Spending rules let you add requirements for official spending, such as receipts, notes, attendees, and client IDs. You can configure rules by dollar amount, budget, and merchant. Streamlined Accounts Payable You can direct all invoices to a dedicated inbox, which extracts information that will be auto-populated into your accounting codes. Because accounting software integration syncs invoices and payments with books, you can reconcile records faster. Cost-saving Global Payments Rho helps organizations save on international expenses by offering unlimited fee-free USD wires to 140-plus countries. It also has flat conversion rates for 38 of the most commonly used global currencies, with a 0.6% conversion rate for 27 non-APAC global currencies and 0.75% for nine APAC currencies. Partner Perks You can get discounts on a wide selection of business software, including Google Cloud, Gusto, HubSpot, QuickBooks, Salesforce, Slack, Stripe, and Zoom. Other Rho Business Products Treasury Account If you have at least $5 million in liquid assets, you’re eligible to open a Prime Treasury account, which invests excess funds in investment-grade and government securities. Rho will customize your investment policy according to your organization’s specific cash flow and security needs. Corporate Cards Rho’s corporate Mastercard options charge no annual fees and offer flexible payment terms. You may issue unlimited physical and virtual corporate cards to your employees, free of charge. Customizable permissions and spending limits ensure responsible use. You also earn cash back on credit card purchases, depending on when you pay off your balances. Balances paid within one day of your purchase earn 1.75% in cash back Balances paid within thirty days of your purchase earn 1.5% in cash back Balances paid within forty-five days of your purchase earn 0.75% in cash back You earn no cash back if you pay your balance after 45 days. Rho strives to offer the highest possible credit limit for your business and analyzes your business holistically when underwriting. It doesn’t require collateral, personal guarantees, or fees. Rho Business Checking Pros & Cons Although the lack of fees for monthly maintenance, checking transactions, ACH, domestic and international wire transfers, and bill pay makes Rho accounts affordable to maintain, the provider’s strict eligibility requirements mean that only organizations with high revenue can access its benefits. Rho’s business checking account is only available to organizations with more than $1 million in revenue or raised equity capital, while its treasury account is only available to organizations with more than $5 million in liquid assets. Moreover, business checking accounts only earn interest at a rate of 0.01%, whereas treasury accounts earn interest up to 3.05%. Credit card purchases can also earn up to 1.75% cash back. Rho isn’t suitable for cash-reliant businesses. Cash deposits are only possible through linked accounts, and ATM transactions aren’t supported at all. Alternatives To Rho Business Checking Rho offers many innovative cash management tools and cost-saving features, but its strict eligibility criteria make it inaccessible to the average small business. Here are three alternative options to consider: *: Best for creating multiple sub-accounts under one checking account. Like Rho, it lets users create multiple (up to 20) accounts under a single checking account. Users can offer account access to team members, customize permissions and spending limits to ensure responsible use, and issue up to 50 employee debit cards. : Best for cash back on debit card purchases. Rho doesn’t have debit cards and thus only offers cash back on credit card spending. Accounts that meet Grasshopper’s minimum balance requirement of $10,000 can earn 1% cash back on debit card purchases. : Best for full-service online banking. Although it has business checking and treasury accounts, Rho offers no basic savings accounts or loan products. The online-only First Internet Bank offers a full suite of banking services, including business checking, savings, certificates of deposit (CDs), Small Business Administration (SBA) loans, and commercial lending. *Relay is a financial technology (fintech) platform backed by FDIC-insured through a supporting bank partnership with Evolve Bank & Trust. Bottom Line With streamlined expense management tools, few fees, and strong global payment perks, the business checking account is an excellent choice for high-revenue companies that conduct international transactions frequently. However, if you cannot reach Rho’s steep financial threshold requirements, you should consider other options.
October 17, 2022
Valley National Bank Business Checking Review 2022
is a traditional bank with branches in Alabama, Florida, New Jersey, and New York. It is a great choice if you’re seeking high free monthly transactions and very generous free cash deposits. It’s ideal for small businesses with low transaction volume, moderate businesses with higher transactions, and female entrepreneurs. It has three business checking accounts: Small Business Checking has a waivable $25 monthly fee, up to 500 free monthly checking transactions, and a free deposit limit of $25,000 Valley Business Checking Plus has a variable monthly fee, up to 1,000 free monthly checking transactions, and a free deposit limit of $50,000 Valley Women in Business Checking has a waivable $10 monthly fee, up to 500 free monthly checking transactions, and no cash processing fee How Valley National Bank Stacks Up With Its Competitors See fullscreen table × *New York and New Jersey: $2 service charge for the use of Allpoint ATMs. **Alabama and Florida: Free withdrawals at nonnetwork ATMs, but operator fees may apply; Valley reimburses up to six nonnetwork ATM fees each month at $1.50 per fee. When Valley National Bank Is a Good Fit Businesses with a low monthly transaction volume and large cash deposits: With its Small Business Checking account, you get up to 500 free checking transactions and up to $25,000 in free cash deposits every month. For its Women in Business Checking account, you get the same number of free transactions and benefit from no cash deposit fees. Businesses with a moderate monthly transaction volume and large cash deposits: With the Valley Business Checking Plus account, you get up to 1,000 free checking transactions and up to $50,000 in free monthly cash deposits. Businesses sending and receiving domestic wire transfers frequently: The bank provides five free incoming and outgoing domestic wires per month for Small Business Checking and unlimited incoming and outgoing domestic wires per month for Women in Business Checking. Businesses founded by women entrepreneurs seeking connection and collaboration: The Women in Business Checking account has a program with membership perks, such as networking events, access to branch conference rooms, and discounts on safe deposit boxes. When Valley National Bank Is Not a Good Fit Small businesses looking for digital tax management tools: Valley offers merchant services but doesn’t have specialized tax preparation solutions. Freelancers and self-employed professionals can opt for , which offers a Tax Optimizer feature, one of the reasons it’s part of our list of the best banks for the self-employed. Businesses reliant on in-person banking and located outside Valley’s service areas: Valley only has brick-and-mortar branches in Alabama, Florida, New Jersey, and New York. You can consider , , or , which have branches nationwide. Businesses that need a free business checking account and whose needs are satisfied by a digital bank: Even if Valley’s checking accounts have waivable monthly fees, you can choose fully digital banks and fintech providers like , , or as they offer fee-free checking products. Valley National Bank Business Checking Overview Valley National Bank Business Checking Requirements You can visit the website to open a Small Business Checking or Women in Business Checking account. For the Business Checking Plus account, you can head to one of the 200-plus branches in Alabama, Florida, New Jersey, and New York since this product is offered only at physical locations. To start your online application, you need to be at least 18 years old, hold a US residential address, and be authorized to open accounts on behalf of the business. You also need to provide the following: Tax information and formation documents Social Security number Government-issued ID, such as a driver’s license, nondriver ID, and passport Your primary bank’s username and password to fund your account Before opening an account, see our guide on how to open a business bank account, which includes a free downloadable checklist of required documents. Valley National Bank Business Checking Features Valley National Bank’s business checking accounts provide a Visa debit card, online and mobile banking, and merchant services. Online & Mobile Banking With a Valley National Bank business checking account, you can transfer funds, make deposits, pay your bills, and view your balances online. You can download Valley National Bank’s mobile banking app from the App Store and Google Play. Reviews for the Valley National Bank mobile app are generally good. It scored 4.8 out of 5 stars on the App Store and 4.2 out of 5 stars on Google Play. Users who gave high ratings on the mobile app were satisfied with its ease of use and functionality. However, some gave a negative rating for experiencing glitches when depositing several checks. Fee-free Cash Deposits Using Allpoint Networks Valley National Bank has 200-plus ATMs and provides surcharge-free access to 55,000+ Allpoint ATMs across the country. However, a $2 Valley service charge is collected for using an Allpoint ATM in New Jersey and New York. Business Services Payment solutions: Valley partnered with First Data to provide Clover solutions, ensuring payment security. Business owners can accept various payment types, from magnetic stripe and EMV®-compliant credit and debit cards to Apple Pay®. You can move your business online with Clover® Flex Virtual Terminal. Payroll processing: The bank partnered with ADP® to help you streamline your business payroll operations. No matter your business size, the right payroll solutions and services are available. Treasury services: Valley offers account reconcilement and Escrow services. Fraud control: Business owners can reduce the risks of unauthorized check payment activity with the bank’s Payee Positive Pay. It also limits unauthorized electronic charges with ACH Block. Remote deposit: With Valley’s EZ Deposit, you can initiate check deposits for same-day posting into multiple business accounts from your desktop, even beyond regular branch banking hours. Zero balance account: This allows you to manage your cash flow by transferring enough funds into this account to complete a transaction. Using a Zero Balance account, you can fund secondary checking accounts from one master account or collect from several subsidiary accounts into the master account. Women in Business Program Valley National Bank offers businesswomen an opportunity to collaborate and connect with other female entrepreneurs, whether they have a new or established business. The program provides a space for growth, learning, and networking through social and educational events. Membership perks include skill-building seminars, use of branch conference rooms and meeting spaces, notary service and signature guarantee in New Jersey, New York, and Florida, plus discounts on safe deposit boxes. Other Business Checking Accounts Large corporations with high transaction volumes can open a Valley Corporate Checking account, while nonprofits can opt for a Valley Non-Profit Organization Checking account. Other Banking Products Valley National Bank has business savings, money market accounts, CDs, credit cards, lending products such as commercial real estate loans and equipment financing, and specialized banking solutions for business clients: Business savings: You can earn 0.01% APY on any balances over $100 when you open a Business Savings account. The minimum opening deposit is $500, and you can waive the $5 monthly fee by maintaining an average daily balance of $500 in your account. Business money market: With a business money market account, you gain competitive yields with tiered APY depending on your balances. It requires a $10,000 minimum average daily collected balance. Rates are subject to change at any time. Business CD: For competitive rates at flexible terms, you can open a Valley Business Certificate of Deposit at a branch. Interest is compounded daily and paid based on your terms (monthly, quarterly, semi-annually, annually, and at maturity). Valley purchasing card: Valley offers a nonrevolving payment card that streamlines payment transactions and reporting. You can track spending and may also qualify for cash back rebates or rewards. Credit Card: The Valley Visa® Business Credit Card has no annual fees and offers 1% unlimited cash back rewards. Lending: Business owners can apply for different loan products, such as Business Term Loans, Fixed Rate Term Loans, and Lines of Credit ranging from $5,000 to a maximum of $100,000. Vehicle Loans and Equipment Loans are also available at fixed rates. Equipment Loans require a Valley business checking account to be opened. Small Business Administration (SBA) loans: You can choose to apply for the following: SBA 7(a) Loan program: Most small businesses are eligible for this program. It has a 75% to 85% guarantee in providing access to capital. You can borrow up to $5 million. SBA 504 Loan program: Down payments can be as low as 10%, and the repayment terms can be up to 25 years. You can borrow up to $15 million. Real estate loans: Valley offers Commercial Real Estate Loans and Construction Loans to help business owners in purchasing, refinancing, or developing their projects. Equipment financing: Apply for financing for industrial machinery, office appliances, and equipment for medical, dental, or veterinary practices. Nonprofit loans: The bank supports nonprofit organizations by offering an array of financial solutions and loan packages. Community association loan program: For an association’s needs, Valley extends the Community Association Loan Program for financing repairs, improvements, or refinancing existing debt. Specialized banking solutions: Valley offers Cannabis Banking, Correspondent Banking Solutions, National Deposits Group, Municipal & Government Banking, Healthcare Financial Services, Homeowners Association, and PropTech. Industry expertise: Business owners can apply for dealership financing, find solutions to manage interest rate risk, and select a Qualified Intermediary for a 1031 Exchange. Interest on Lawyer Trust Accounts (IOLTA) for New Jersey and Alabama/interest on lawyer accounts (IOLA) for New York/interest on trust accounts (IOTA) (Florida): Valley offers these accounts to help manage clients’ funds for legal assistance or representation. A $100 minimum opening balance is required, but the account has no monthly maintenance fee. Valley National Bank Business Checking Pros & Cons Valley National Bank’s business checking accounts are great options. You can even access Valley ATMs and 55,000+ Allpoint ATMs for free. If you have a Small Business Checking account, you gain up to five free incoming and outgoing wires each month. However, your Valley debit card doesn’t provide you with cash back rewards on your business purchases. ATM fee refunds are also unavailable, except when transacting at nonnetwork ATMs in Alabama, and reimbursement is limited to six non-Valley ATM fees per month at $1.50 per fee. Small Business Checking account holders are also required to pay a $15 wire module monthly fee on top of the regular wire charges. Alternatives to Valley National Bank Business Checking Valley National Bank has great business checking products, but if you prefer the convenience of an online bank, want to benefit from in-person banking in more areas, and earn a high yield from your account, you can check other banks. Here are three options to consider: is best for business owners seeking full-service online banking. They can readily open a checking or money market account or apply for a loan without visiting a branch. is best for businesses needing easy access to several brick-and-mortar branches. Chase has a nationwide branch presence in 48 states. is best for businesses wanting a 1.5% APY, provided you meet the qualifying deposits. Check out more providers in our list of the best small business checking accounts. Bottom Line business checking accounts are excellent for cash-intensive businesses with frequent deposits of large cash amounts. It’s also suitable for female entrepreneurs as they can benefit from the Women in Business Program and the fee-free cash deposit feature of the Valley Women in Business Checking account. The bank also provides plenty of business financing sources including lending options and banking services. If your business is located in one of Valley’s four states of operation, then this is a great choice for your banking needs.
October 14, 2022
10 Best Free Business Checking Accounts for 2023
The best free business checking accounts should have no monthly fees, or fees that are easily waivable, and limited and transparent routine fees. Some providers have next to no fees for typical banking services while others offer a limited number of free transactions before fees are charged. The banks on this list have the best free business checking accounts while also providing you with the other business services needed for your company's growth. These include interest-bearing accounts, lending products, personal accounts for you and your employees, and merchant services. Here are the 10 best free business checking accounts: : Best overall for free business checking with a high interest yield : Best free business checking with a traditional bank : Best premium business checking account with a traditional bank : Best for unlimited transactions with a traditional bank : Best for businesses with minimal monthly transactions : Best for full-service online banking : Best digital-only bank for tech companies and startups : Best digital-only bank for rapid access to funds and express payment processing : Best digital-only bank for integrated free payment software : Best digital-only provider for cash back on debit card purchases Best Free Business Checking Accounts At a Glance See fullscreen table × *Providers are financial technology (fintech) platforms backed by and Federal Deposit Insurance Corp. (FDIC)-insured through a supporting bank partnership. Partnerships: Coastal Community Bank for Bluevine, Evolve Bank & Trust for Mercury, Middlesex Federal Savings for Novo, and The Bancorp Bank for Oxygen Bluevine: Best Overall for Free Business Checking With a High-interest Yield Bluevine Business Checking Overview Bank of America: Best Free Business Checking With a Traditional Bank Bank of America FundamentalsTM Business Checking Overview Chase: Best Premium Business Checking Account With a Traditional Bank Chase Business Complete BankingSM Checking Overview Capital One: Best For Unlimited Transactions With a Traditional Bank Capital One Basic Business Checking Overview U.S. Bank: Best for Businesses With Minimal Monthly Transactions U.S. Bank Silver Business Checking Overview First Internet Bank: Best for Full-service Online Banking First Internet Bank Business Checking Overview Mercury: Best Digital-only Bank for Tech Companies & Startups Mercury Business Checking Overview Novo: Best Digital-only Bank for Rapid Access to Funds & Express Payment Processing Novo Business Checking Overview Grasshopper: Best Digital-only Bank for Integrated Free Payment Software Grasshopper Innovator Business Checking Overview Oxygen: Best Digital-Only Provider for Cash Back on Debit Card Purchases Oxygen Business Checking Overview How We Evaluated the Best Free Business Checking Accounts When we evaluated the best free business checking accounts, we considered Which accounts had no monthly fees or easily waivable monthly fees Required opening deposit and balance minimums Transaction limits before fees ACH and wire transfer fees ATM fees and availability Cash deposit fees and availability Interest yield, if applicable Other checking account perks Software integrations Other business services provided Lending products provided Customer service Customer reviews What You Need to Open a Small Business Checking Account Though each provider on this list may require different documents to open a business bank account, here is a general list of what you will need: Employer identification number (EIN) or Social Security number if you’re a sole proprietor Fictitious business name certificate or doing-business-as (DBA) certificate Business formation documents Organization documents, including your ownership agreements Business licenses Government-issued photo ID, such as a passport or driver’s license Frequently Asked Questions (FAQs) What bank doesn’t charge monthly fees for a business account? Many online-only banks and some traditional banks, such as U.S. Bank, provide business checking accounts with no monthly fees. Others, such as Bank of America and Chase, offer easy ways to waive monthly fees. What banks have free checking with no minimum balance? Several online-only banks offer free checking with no minimum balance, including Bluevine, Novo and First Internet Bank. Some traditional banks, such as Capital One, have waivable monthly fees with unlimited free transactions. Even if a bank has waivable monthly fees, check the free transaction limit and ensure your business won’t exceed that each month. Bottom Line If you are looking for a business checking account with no or easily waivable monthly fees, the providers on this list are all outstanding choices. When deciding which provider to choose, first figure out what you need from your business bank. Decide whether online-only banks or traditional banks provide the services you need, then select the bank and checking account that best meet your business needs.
October 13, 2022
Exchange Bank Business Checking Review 2022
Exchange Bank is a traditional bank in California with branches largely concentrated in Sonoma County, specifically Santa Rosa. It’s a great choice for sole proprietors and nonprofit organizations with low monthly transactions looking for waivable monthly fees and an option to earn interest. It offers six business checking accounts: Sole Proprietor Checking has a waivable $10 monthly fee, up to 100 free monthly transactions, and a free cash deposit limit of $5,000. Business Checking has a waivable $15 monthly fee, up to 200 free monthly transactions, and a free cash deposit limit of $10,000. Business Advantage Checking has a waivable $25 monthly fee with 400 free monthly transactions and a free cash deposit limit of $20,000. Non-Profit Checking has a waivable $6 monthly fee, up to 100 free monthly transactions, and a free cash deposit limit of $10,000. Sole Proprietor Interest Checking and Non-Profit Interest Checking have a waivable $13 monthly fee, up to 150 free monthly transactions, and a free cash deposit limit of $10,000 These all come with a free debit card, online and mobile banking, and access to Merchant Services. How Exchange Bank Stacks Up With Its Competitors When Exchange Bank Is a Good Fit Sole proprietors with low monthly transaction volumes: With Sole Proprietor Checking, you get up to 100 free monthly transactions and up to $5,000 in free cash deposits each month. Businesses with moderate to higher monthly transaction volume: The Business Checking and Business Advantage Checking accounts offer higher free monthly transactions and cash deposit limits. Sole proprietors and nonprofits looking to earn interest on checking accounts: Sole Proprietor Interest Checking and Non-Profit Interest Checking accounts generate an increasing APY the higher the balances are. Businesses receiving one or two wire transfers every month: With Business Advantage Checking, you get up to two incoming wires per month rebated at the end of the statement cycle. When Exchange Bank Is Not a Good Fit Nonprofits looking for no monthly maintenance fees: While Non-Profit Checking has a waivable monthly fee, there are other banks that don’t charge monthly fees at all, such as and . Businesses needing in-person banking and located outside California: Exchange Bank’s brick-and-mortar branches are confined to California, mostly in Sonoma County. It’s best to consider , , or for a nationwide service area. Exchange Bank Business Checking Overview Exchange Bank Business Checking Requirements You can visit an branch to open a business checking account. The bank will collect information on all beneficial owner(s) and control persons of legal entities, whether they have a personal relationship with the bank. Beneficial owners are individuals who own 25% or more of the equity interest of the Legal Entity, whereas the Control person is identified as a high-level official responsible for running the organization and someone who has access to a range of information dealing with the day-to-day company operations. To open a business checking account, you’ll need to provide your name, address (personal or business), date of birth, social security number, or tax identification number. You also need to present acceptable identification, such as a driver’s license, state-issued identification card, passport, and alien identification card. Click on your entity type to view the bank’s additional business checking requirements. Before opening an account, see our guide on how to open a business bank account. It includes a free downloadable checklist of required documents. Exchange Bank Business Checking Features Exchange Bank’s business checking accounts offer a free debit card, interest for some checking products, and online and mobile banking. Debit Mastercard & Fee-free Transactions at Allpoint ATMs Exchange Bank provides a debit Mastercard that gives zero liability protection—so you won’t be held responsible for unauthorized transactions as long as you report the loss promptly. It can be used for automatic monthly bills payment with the funds directly deducted from your checking account. Business checking account holders can use their debit card at more than 55,000 Allpoint ATMs with no surcharges. Interest-bearing Checking Accounts Sole proprietors and nonprofit organizations seeking interest on their checking balances can open interest-earning checking accounts. *Interest rates and APYs may change at any time, at the bank’s discretion. **Can be waived by maintaining a $5,000 average daily collected balance or a $10,000 average daily collected balance in combined accounts Online & Mobile Banking With Exchange Bank, you can perform online transactions in real time. You can also deposit checks using your mobile, review your cash flow through cash management reports, and manage your payments with online and mobile automated clearing house (ACH), wire, and BillPay. You can download Exchange Bank’s mobile banking app via the App Store and Google Play. Merchant Services Small business owners can accept safe and secure payments through credit cards and digital wallets. Exchange Bank offers different types of Clover products designed to suit your business needs—from a countertop point-of-sale (POS) system (Clover Station) to a compact terminal (Clover Mini). You can also accept payments on the go with Clover Mobile and connect via Bluetooth to accept cards using a mobile device or tablet with Clover Go. Other Checking Products State Bar Checking and State Bar Comparable Rate Account are interest-earning checking accounts available to California Attorneys and law firms that receive and disburse client funds. Analysis Checking is suitable for businesses with high transaction activity or using cash management services. Public Funds Interest Checking is available to government agencies wanting to earn interest from a checking account. Other Banking Products Exchange Bank has a wide range of business products and services for small businesses. It includes business savings, a money market account, credit cards, and loans. Business savings: For a minimum $500 opening deposit, you can earn interest from a Business savings account. The $5 monthly fee can be waived if you maintain a daily balance of at least $500 or a combined average daily balance of at least $750 in your savings and linked checking account. Business money market: For a minimum $1,000 opening deposit, you can earn interest from a Business money market account. You need to maintain an average daily balance of $3,000 to waive the $12 monthly fee. Business certificate of deposit (CD): For a minimum $1,000 opening deposit, you can earn tiered interest rates, with terms ranging from three months to five years. Business credit cards: Business owners who currently have a deposit account with Exchange Bank can apply for the Exchange Bank Visa® Business Cash Preferred Card. It rewards your business with unlimited cash back and has no annual fee. For interest savings and a low introductory rate, this is a great card. For more rewards and no point limits, you can apply for an Exchange Bank Smart Business Rewards Card, while an Exchange Bank Business Real Rewards Card offers 1.5 points monthly for every $1 spent on eligible purchases. Business loans: Business owners can seek financing through business term loans; business lines of credit; Small Business Association (SBA) loans; vineyard, winery, and agricultural loans; and commercial real estate (CRE) and construction loans. Exchange Bank Business Checking Pros & Cons Exchange Bank provides great business checking accounts that allow more savings with its low cash deposit fees if you exceed the free cash deposit limit. It also offers a rebate of up to two incoming wires per month with its Business Advantage Checking account. Further, you can conduct fee-free transactions at more than 55,000 Allpoint ATMs. However, the bank’s Non-Profit Checking account has a monthly fee while other banks offer this account type for free. Moreover, the APY rates for Exchange Bank’s interest-earning accounts are low. And to waive your monthly fees, you need to maintain a high average balance in your account. Alternatives to Exchange Bank Business Checking Exchange Bank has excellent business checking options, but if you’re searching for an institution that offers a free checking account with a high APY, more branch service areas, and cash back earnings from your debit card, then you’ll have to look elsewhere. Here are three alternatives to consider: is best for business owners looking for nationwide branches. is ideal for businesses wanting to earn cash back rewards from their debit cards. is optimal for businesses seeking a free checking account that earns up to 1.01% APY for a reasonable $5,000 average daily balance. Check out more options in our list of the best small business checking accounts. Bottom Line is a great option if you need the services of a traditional bank and your business is located in Sonoma County, California. It provides sole proprietors with low transaction activities a basic account—Sole Proprietor Checking—which has an option to earn interest. As your business volume increases, you can shift to the higher-tier Business Checking and Business Advantage Checking accounts, which come with more free monthly transactions and greater free cash deposit limits.
October 5, 2022
What Is a Business Money Market Account & How It Works
A business money market account (MMA) is an interest-bearing business bank account that typically earns interest at a higher rate than business savings accounts. However, money market accounts earn less interest than investment accounts because they are considered low risk. While the Federal Reserve Board officially lifted the six-transaction limit on money market accounts in 2020, some banks have kept the limit in place. Other banks have either increased the limit or eliminated it. Like other deposit accounts, money market accounts are Federal Deposit Insurance Corporation (FDIC)-insured up to $250,000 per account holder. If you’re looking to open a business money market account, is an excellent choice. You can earn an annual percentage yield (APY) of 1.51% with a daily balance of $5 million or less and 2.27% with a daily balance above $5 million. The account has an easily waivable monthly fee, and sole proprietors can get an ATM card. Visit First Internet Bank’s website for more information. How Business Money Market Accounts Work A business money market account can be funded via automated clearing house (ACH) transfer, check or cash deposit, or incoming wire transfer. Once the money is in your account, you can leave it to draw interest, withdraw it, or transfer it to another account. In general, most financial institutions still limit the number of withdrawals or outgoing transfers to just six per month. You’ll be charged an excess transaction fee if you exceed six transactions. In extreme cases, the bank may reclassify your account, which could cause you to lose the interest-bearing nature of the account. To calculate how much money you’ll make monthly, you’ll need to know what period the bank uses to compound the interest, the APY earned by the account, and your daily average balance: Compounding time period: The amount of time the bank uses to determine how often interest is compounded. In most cases, interest is compounded monthly. APY earned: This is the annual percentage yield earned by the account. It’s slightly higher than the stated interest rate because you can earn interest from the account's already accrued interest. Daily average balance: Generally, this is calculated by taking the sum of the daily balance of your account in a billing cycle and dividing it by the number of days in that billing cycle. Business Money Market Interest Formula, Calculator & Examples To calculate the money market interest and the final balance of your account after the interest is added for one month, use the formula below: Final Balance = D [(r/100)/n] + E D = Daily average balance at the end of the billing cycle E = End-of-cycle balance at the end of the billing cycle r = APY n = number of compounding periods in a year (in this case, 12) Calculator Use this business money market interest calculator to determine the balance of your account at the end of the billing cycle after interest earnings are added. Business Money Market Account Costs There are limited costs involved with money market accounts, and some of them can be waived if you meet certain requirements. Here are some more common fees you may see with your money market account for business: Monthly account fees: Account fees range from $5 to $15 per month. Most can be waived if monthly balance minimums are met. Transaction fees: If your bank still has a monthly transaction limit, you could pay $15 per excessive transaction or more. Your account could also be reclassified into a noninterest earning account. Wire transfers: Some accounts will charge wire fees ranging from $15 to $50 per transaction. Cashier’s checks: This can be up to $15 a piece for cashier’s checks. Dormant account fee: If your account becomes inactive or dormant, you could be charged fees. Be sure to conduct transactions into your account at least once a year to avoid these fees. If you aren’t going to use an account, be sure to close your account to avoid fees and potential unclaimed funds issues. Pros & Cons of a Business Money Market Account Business Money Market Accounts vs Other Accounts There are other types of business bank accounts that allow you to earn interest on reserve business funds. In addition to business money market accounts, you could choose to open a high-yield business savings account or a business certificate of deposit (CD). The table below compares some of the differences among the three account types: How To Open a Business Money Market Account The steps to opening a business money market account are similar to opening any business bank account. If you already have a small business checking account with a provider, check with it first to see if it offers a money market account. Since it already has your business information, the opening process should be much easier. Otherwise, here’s a general list of what documents you’ll need: Employer identification number (EIN) or Social Security number if you’re a sole proprietor Fictitious business name certificate or doing-business-as (DBA) certificate Business formation documents Organization documents, including your ownership agreements Business licenses Government-issued photo ID, such as a passport or driver’s license Frequently Asked Questions (FAQs) How does a business money market account work? A business can transfer financial reserves into a business money market account. That money will earn interest, typically at a higher rate than a business savings account but lower than a business CD or investment account. It carries far less risk than investment accounts as the FDIC insures them for up to $250,000. What are the disadvantages of a money market account? Three main disadvantages to a business money market account are: Some business money market accounts have a high minimum deposit or balance requirements. Failure to meet the minimum balance requirements could result in monthly fees or limited interest earnings. There can be significant penalties for exceeding the maximum monthly withdrawals or transfers out of the MMA—they can be hefty fees or even the reclassification of the account into a noninterest-earning account. Banks often offer inflated introductory rates, which then drop significantly once the intro period expires. Once the rate changes, this could leave you looking for a new business MMA provider. Can a business use a money market account? Any business can use a money market account to earn interest on the company’s financial reserves. Not all banks with business banking products offer business money market accounts. Visit your bank’s website to check. Bottom Line A business money market account is an excellent way for your company to earn interest on its financial reserves. A money market account typically earns more than a business savings account but less than a business certificate of deposit or investment account. However, CDs lack the liquidity of money market accounts, and investment accounts carry a higher risk. Business money market accounts are a solid choice for a good interest yield in a low-risk account.
October 5, 2022
Carver Bank Business Checking Review 2022
Carver Federal Savings Bank is a great business banking provider for small businesses operating in Brooklyn, Manhattan, and Jamaica. As a civic-minded, Black-owned bank aiming to help individuals and businesses from low- to moderate-income neighborhoods build wealth, Carver Bank provides a number of affordable business banking solutions. Its business checking products include Carver Community Business Free Checking, a fee-free checking account that offers 1,000 free transactions; Business Partner Checking, a standard account for businesses with high transaction volumes; and Business Value Plus Interest Checking, a checking account that earns an APY of 0.15% on all balances. Note: Carver Bank is a business financial technology platform backed by FDIC-insured X. How Carver Bank Stacks Up With Its Competitors See fullscreen table × *Third-party operator fees apply When Carver Bank Is a Good Fit You want fee-free business checking: It has a free business checking option called Carver Community Business Free Checking. It does not charge a monthly service fee and has no minimum balance requirements. You make 1,000 or fewer transactions per month: Carver Community Business Free Checking and Business Value Plus Interest Checking both allow up to 1,000 fee-free transactions per month. You want access to business lending products: It offers Small Business MicroLoans, business lines of credit, and term loans. You want a bank that supports minority- and women-owned businesses: Carver Bank is an African American-operated bank that focuses on supporting minority- and women-owned businesses. Per dollar deposited by consumers, it reinvests 80 cents into low- to moderate-income communities in the greater New York City region. When Carver Bank Is Not a Good Fit You want a bank with nationwide branches: It only has eight brick-and-mortar locations in Brooklyn, Manhattan, and Jamaica. has 4,700 physical branches across all 48 lower states. You make wire transfers regularly: It charges $25 for incoming wire transfers, $35 for outgoing domestic wire transfers, and $40 for outgoing international wire transfers. Businesses that make frequent wire transfers would be best served by , which charges no fees for incoming wire transfers, $5 for outgoing domestic wire transfers, and $10 for outgoing international wire transfers. Under the Relay Pro account, all wire transfers are free. You want access to basic savings accounts: Although it offers money market accounts and CDs, it has no basic savings products. offers both business checking accounts and interest-earning savings accounts. If you meet one or more of these scenarios, check out our guide to the best small business checking accounts for additional recommendations. Carver Bank Business Checking Overview *Customers can also waive the monthly fee by maintaining $50,000 in combined average balances in business deposits accounts and credit accounts. **Third-party operator fees also apply. Carver Bank Business Checking Requirements When opening a business bank account, Carver Bank will ask for the following: Name Address Date of birth Social Security number Valid ID (such as a driver’s license or any government-issued ID) Our guide to opening a business bank account comes with a checklist naming important business documents banks typically require. Carver Bank Business Checking Features Carver Bank offers up to 1,000 free transactions, a free Business Visa Debit Card, free mobile and online banking with bill pay, and integrations with Apple Pay, Google Pay, and Samsung Pay. Fee-free Transactions Two of Carver Bank’s business checking accounts, Carver Community Business Checking and Business Value Plus Interest Checking, come with 1,000 fee-free transactions per statement cycle. After the limit, transactions cost 15 cents per item. Carver Bank defines transactions as checks paid, deposits, check deposited, and automated clearing house (ACH) debits and credit. Business Visa Debit Card All of Carver Bank’s business checking products come with free Business Visa Debit Cards. Digital Banking Options Carver Bank offers two free digital banking services: online banking and mobile banking. Through online banking, businesses can schedule payments, transfer funds, make direct payroll deposits, manage cards, and view balances, transaction histories, and check images. The mobile app, available on iOS and Android, also offers e-statement viewing and remote deposit capture. Apple Pay, Google Pay & Samsung Pay Integrations Carver Bank business checking accounts work with Apple Pay, Google Pay, and Samsung Pay. Other Carver Bank Business Products Landlord Accounts Carver Bank also offers special business checking solutions for landlords. These accounts, also called tenant security accounts, have no monthly maintenance fees, per-item fees, or minimum balance requirements. It provides subaccounts for deposits and monthly master account statements in paper and electronic formats. Money Market Accounts Carver Bank offers two business money market accounts: the Business Promo Money Market Account and the Business Premier Money Market account. Business Promo Money Market: This account earns interest at a rate of 0.50% for balances of $24,999.99 and below, and 1.65% for balances of $25,000 and above. The higher rate is only accessible to accounts that are linked to existing Carver Community Business Free Checking or Business Value Plus Interest Checking accounts. Business Premier Money Market: This account earns interest at a rate of 0.50% for balances of $24,999.99 and below, 0.75% for balances of $25,000 to $99,999.99, and 0.80% for balances of $100,000 and above. CDs Businesses wanting access to Carver Bank’s highest interest rates should consider Carver Bank’s business CDs. Rates range from 1.25% APY for 91-day CDs and 2.75% APY for 60-month CDs. The minimum deposit is $2,500 for terms of 12 months or lower, and $1,000 for terms of 18 months or higher. Lending Products The lending products Carver Bank offers include a Small Business MicroLoan Program, business lines of credit, and business term loans. Small Business MicroLoan: Businesses that need working capital for expenses like payroll, equipment, office renovations, and inventory can go through Carver Bank to access low-fixed interest rate MicroLoans from $5,000 to $50,000. Lines of credit: Carver Business Checking account holders can access lines of credit worth $1,000 to 15,000. Term loans: Carver Bank provides term loans for businesses that need financing for equipment purchases, permanent working capital, leasehold improvements, and expansion. Business Credit Cards Carver Bank offers credit cards with low rates, cash back, and flexible rewards. Business credit cards come with free online expense reporting tools and mobile payment capabilities. Accountholders can issue credit cards to their employees fee-free. Carver Bank Business Checking Pros & Cons Among Carver Bank’s business checking products, Carver Community Business Free Checking and Business Value Plus Interest Checking are the stronger options. Carver Community Business Free Checking offers 1,000 fee-free transactions while charging no monthly maintenance fees. Business Value Plus Interest Checking also offers 1,000 fee-free transactions and earns interest at a rate of 0.15%. Its monthly fee of $6 can be waived easily with an average daily balance of $5,000. Business Partner Checking, however, charges a monthly maintenance fee of $15, which can only be waived by maintaining an average daily balance of $25,000 or an average combined balance of $50,0000 in business deposit accounts and credit accounts. Carver Bank only has branches in eight New York locations. However, it also offers free online and mobile banking with bill pay. Although Carver Bank has no savings accounts, it offers money market accounts and business CDs. It also has a decent selection of lending products and business credit cards. Alternatives to Carver Bank Business Checking Although Carver Bank is an affordable business banking option, other banking solutions can offer better ways to save, including ATM reimbursements, cash back, and interest on deposits. Here are three alternative options to consider: *: Best digital-only bank with free ATM usage. Carver Bank customers can only make fee-free transactions in Allpoint and Carver Bank ATMs, whereas Novo gives customers more options for fee-free ATM locations by reimbursing all ATM fees at the end of each month. : Best digital-only bank for cash back on debit card purchases. Carver Bank only earns cash back on credit card purchases, while Grasshopper earns 1% cash back on all online and in-store debit card purchases. *: Best for earning interest on deposits. Although Carver Bank offers interest-earning checking through Business Value Plus Interest Checking, it only offers a rate of 0.15%. Meanwhile, Qualified Bluevine accounts earn interest at a rate of 1.50% on balances up to $100,000. *Providers are financial technology (fintech) platforms backed by and Federal Deposit Insurance Corp. (FDIC)-insured through supporting bank partnerships (Middlesex Federal Savings for Novo and Coastal Community Bank for Bluevine). Bottom Line Carver Bank’s business checking accounts Carver Community Business Free Checking and Business Value Plus Interest Checking are great options for New York-based businesses looking for affordable banking solutions. Given Carver Bank’s civic-minded nature, it’s an especially suitable choice for minority and women business owners and those looking to support low- to moderate-income communities in the greater New York City region.
October 3, 2022
What Is Commercial Banking?
Commercial banking is a group of bank products and services designed to meet the financial needs of corporations, medium and large businesses, and government clients. These can include deposit accounts, commercial lending offerings, merchant services, and investment products. This contrasts with retail banking, which offers similar financial services to individual clients and the general public and, in most cases, the same banking provider offers commercial and retail banking services. Banks will provide products and services to small businesses out of one or both of those banking categories. If you need commercial banking products and services, is an excellent option. You can earn cash back bonuses for opening a new business checking account, and it offers a wide range of small business resources and products. Visit Bank of America’s website for more information. Functions of Commercial Banking Commercial banks have several essential functions that allow them to serve business and corporate customers with all their potential banking needs. The functions of commercial banking are accepting deposits, lending funds, acting as an agent, and offering other financial and utility services. 1. Accepting Deposits The most common function of a commercial bank is accepting deposits. Often, these accounts pay interest to depositors but come with monthly fees, which can be waived by meeting certain balance or transaction requirements. Commercial banks will accept deposits in three types of accounts: Current accounts: The most common bank account, these allow customers to withdraw money at any time without notice and often don’t earn interest. Saving deposits: These are smaller accounts that typically earn interest. There may be limits on when and how much can be withdrawn. Term or fixed deposits: Money in these accounts is held for a set period and cannot be withdrawn without a severe financial penalty until the term expires. 2. Lending Funds Commercial banks will provide funding to companies, allowing them to expand, purchase equipment, meet day-to-day financial needs, and acquire additional property, among others. Companies will repay the bank's funding with interest until the loan is satisfied. There are several types of loans provided by commercial banks: Commercial term loan: A short-term lending product used by companies to purchase equipment, inventory, or use for cash flow purposes. Loans are for a set period, usually less than 10 years, with full amortization at the end of the term. Commercial line of credit: A revolving line of funding provided to a company. The company can take draws against the line of credit, with interest paid only on the amount used. Draw periods can range from a few months to a few years. Companies will often have to present financials annually to renew the line of credit for future use. Commercial real estate (CRE) loan: A mortgage loan used for the purchase, rehabilitation, or expansion of real estate. These types of loans include fix-and-flip loans, Small Business Administration (SBA)-backed loans, hard money loans, and conventional mortgage loans. These can be short-term loans that lead to permanent financing or a property sale or can be permanent financing of up to 30 years. Cash credits: Rather than loaning a company money, the commercial bank allows a company to draw against a deposit account created by the commercial bank. The company borrows money without having a credit balance, and interest is only paid on the used amount. It’s often secured with property, fixed assets, or stocks as collateral. 3. Acting as an Agent Commercial banks can perform functions for their customers to assist with their business needs. Some of these functions include: Collecting bills Offering insurance Offering investment products Purchasing or redeeming securities Acting as executor, administrator, or trustee of a client’s estate Helping prepare income tax returns and claiming tax refunds 4. Offering Other Financial and Utility Services Businesses often need other services from their commercial banks besides deposit, lending, and agent. Commercial banks can facilitate these business services, as well as: Overdraft fee protection Traveler’s checks Locker facilities Debit and credit cards Foreign currency exchange Funds transfers including wire services Discounting bills of exchange Commercial Banking Products & Services Commercial banks provide various services that can benefit a business beyond just deposit accounts. They are structured the same way for companies as they would for individual customers. In addition to deposit accounts, here are some of the other services offered by commercial banks: Industrial loans and other lending services: Loans are the primary source of profits for commercial banks. By providing loans to corporations, commercial banks earn income in the form of interest paid to them by their borrowers. Merchant services: Most commercial banks offer merchant services that include credit card processing, mobile payment solutions, gift cards, and electronic check services. Global trade services: These services may include foreign exchange, foreign trade financing, letters of credit, global payments, export financing, and bank guarantees, among others. Leasing: Many companies use leasing as a financing method for acquiring real estate, automobiles, factory equipment, and other major fixed assets. Treasury management services: Commercial banks offer funds collection, disbursement, and fraud prevention. Corporate-oriented products and services: These include retirement products, employee stock ownership plans, payroll services, advisory services, and insurance products designed for corporations and institutions. Pros & Cons of Commercial Banking Types of Commercial Banks There are three types of commercial banks, classified by how they’re owned or where they’re located. Any kind of bank can work for your bank as long as you’re eligible to get an account. Click the tabs below to learn more about each type of bank. Retail Banking vs Commercial Banking Retail banking and commercial banking are often handled by the same financial institutions. Retail banking provides financial services to the general public, while commercial banking offers those services to medium to large-sized businesses and corporations. Almost all banking services in a retail bank would also be available in a commercial bank, including deposit accounts and lending products. Commercial banks would additionally offer business merchant services, investment products, and retirement planning services. Small startups might find their initial banking products housed in a bank's retail banking department when they first open a business bank account. As the business grows, adds employees, and potentially incorporates, those accounts may be moved to the commercial banking department. While the general steps for opening a business bank account at a retail or commercial bank will be similar, the specific documentation may differ. The commercial bank may require your business to be established longer, have higher revenues, and be structured as a limited liability company (LLC), S corporation (S-corp), or C corporation (C-corp). When choosing a bank for your small business, you should consider whether the bank has both retail and commercial banking services. This would allow the same institution to continue serving your business as it grows. Commercial Banking vs Investment Banking If retail banking caters to the smallest businesses and commercial banking to the mid-sized and larger businesses, the largest corporations are served by investment banks. They provide services to large, publicly traded corporations. They help these corporations by advising on investment strategies, stock issuance, and potential acquisitions and mergers. They also handle large amounts of money, typically deal with longer-term investments, as opposed to day-to-day financial transactions, and can assist with raising capital. Here’s a table with some of the differences between the two types of banks. Frequently Asked Questions (FAQs) What is an example of commercial banking? While commercial banking can include services that would also fall under retail banking, such as deposit accounts and lending products, other services would be exclusive to it, including offering investment products, payment processing, merchant services, and global trade services. What are the primary functions of a commercial bank? A commercial bank has four primary functions. Accepting deposits: These deposits can be accepted into current accounts, saving deposit accounts, and term or fixed deposit accounts. Lending funds: Commercial banks should offer a variety of lending products, including term loans, lines of credit, real estate loans, and cash credits. Acting as an agent: A commercial bank will act on behalf of the business for many transactions, including collecting bills, offering insurance, offering investment products, and helping with tax preparation. Offering other financial and utility services: Commercial banks offer services outside of deposit and lending services, including overdraft fee protection, traveler’s checks, locker facilities, debit and credit cards, and foreign currency exchange. What are the advantages of a commercial bank? There are three major advantages of a commercial bank. They provide products specifically designed for the financial needs of a business, assign a customer service representative that works directly with the business to ensure their needs are met, and enable you to set up deposit accounts for your employees. Bottom Line Commercial banks can provide your business with a wide range of services. Many offer commercial and retail banking services, allowing your business to grow into the services that a commercial bank offers. Before you start a business relationship with a bank by opening a small business checking account, consider a bank that will allow your business to grow and expand.