Farmers & Merchants Bank Business Checking Review 2023
Tricia has nearly two decades of experience in commercial and federal government lending. Her expertise is highlighted throughout small business loan content on Fit Small Business.
Ricci Recto has two years of writing experience creating digital marketing content for finance clients. She specializes in business banking.
This article is part of a larger series on Business Banking.
If you’re looking for affordable regional banking in Southern California, Farmers & Merchants Bank is a great option. It offers four types of business checking products: a basic, noninterest-drawing checking account with low transaction limits; an analyzed checking account with earnings credit; a non-interest-drawing account with higher transaction limits; and an interest-drawing account with 0.05% APY.
Farmers & Merchants Bank also offers specialty banking services for faith-based organizations and healthcare businesses.
What We Like
- Unlimited check-writing, deposits, and transactions
- 300 fee-free debit transactions per month for basic accounts
- Sweep accounts and zero balance accounts available
What's Missing
- $20 monthly service fee and $5,000 minimum balance requirement for basic accounts
- $3 per paper statement
- $5 per additional account user
Features
- Scalable checking accounts
- Business Debit Mastercard with alerts
- Business online and mobile banking
- Bill pay
- Mobile check deposit
- Specialty services for healthcare and faith-based organizations
How Farmers & Merchants Bank Stacks Up With Its Competitors
Monthly Fee | Transaction Limit Before Fees | ATM Fees | Minimum Opening Deposit | |
|---|---|---|---|---|
 Business Checking Non-Analyzed | $20; waivable | Unlimited check-writing, deposits, and transactions | None at Farmers & Merchants Bank ATMs; $1.50 for nonnetwork use* | $200 |
 Basic Business Checking | None | 75 fee-free transactions per month, then 55 cents per item after the limit | None at Comerica ATMs; $2 for nonnetwork use* | $50 |
 Business Complete Banking | $15; waivable | 20 free paper transactions per month; then 40 cents per item after the limit | None at Chase ATMs; $2.50 for nonnetwork use* | None |
*Third-party operator fees may apply.
When Farmers & Merchants Bank Is a Good Fit
- You want unlimited check-writing, deposits, and transactions: All business checking accounts come with unlimited fee-free check-writing, deposits, and transactions.
- You run a healthcare business or faith-based organization: It offers specialty services, including customized lending, to clients running healthcare- or faith-related organizations.
- You want access to commercial lending products: It has commercial real estate and construction lending, lines of credit, equipment loans, and business credit cards.
When Farmers & Merchants Bank Is Not a Good Fit
- You want nationwide access to in-person banking: Farmers & Merchants Bank operates exclusively in California, while Chase has 4,700 branches in 48 states.
- You cannot maintain an average daily balance of $5,000: Farmers & Merchants Bank charges a monthly maintenance fee of $20, which can only be waived with a minimum balance of $5,000. We recommended the Burbank-based credit union UMe, which lets customers waive the $10 monthly service fee by signing up for e-statements.
- You want to manage your business accounts with a team: Although Farmers & Merchants Bank lets customers add additional users to business accounts, it charges a $5 fee per user. The online-only banking solution Relay lets users invite additional team members and customize access levels and spending limits. It issues up to 50 employee debit cards, free of charge.
If your small business meets one or more of these scenarios, see our guide to the best small business checking accounts for additional recommendations.
Farmers & Merchants Bank Business Checking Overview
Business Checking Non-Analyzed | Business Checking Analyzed | Business Checking Plus | Business Interest on Checking | |
|---|---|---|---|---|
Required Opening Deposit | $200 | |||
Required Balance Minimum | $5,000 | None | $35,000 | $6,000 |
Monthly Fees | $20 | $25 | $35 | $25 |
APY | None | 0.05% | ||
Transaction Limit Before Fees | 300 fee-free combined debit transactions (withdrawals, checks, automatic transfers or payments) per statement cycle; then 40 cents after the limit | Unlimited | 400 fee-free combined debit transactions (withdrawals, check, automatic transfer or payment) per statement cycle; then 40 cents after the limit | 300 fee-free combined debit transactions (withdrawals, checks, automatic transfers or payments) per statement cycle; then 40 cents after the limit |
Automated Clearing House (ACH) Fees |
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Domestic Wire Transfer Fees |
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International Wire Transfer Fees |
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ATM Fees | None at Farmers & Merchants Bank ATMs; $1.50 for nonnetwork use (Third-party operator fees may apply) | |||
Open an Account | ||||
Farmers & Merchants Bank Business Checking Requirements
To open a business checking account with Farmers & Merchants Bank, you need to visit a branch location or submit a contact request online. You can ask to be contacted by phone or email. The contact request form will require the following information:
- First name
- Last name
- Phone number
- Email address
- ZIP code
Farmers & Merchants Bank accepts businesses that operate outside of California. However, non-California businesses must call Farmers & Merchants Bank at (866) 437-0011 to inquire.
On application, you may be asked to provide relevant business documents. For a checklist of documents most business banks require, refer to our guide on how to open a small business checking account.
Farmers & Merchants Bank Business Checking Features
Scalable Business Checking Accounts
Farmers & Merchants business checking accounts scale according to your business needs, with differing limits for debit transactions (withdrawals, checks, automatic transfers, or payments). The opening deposit for all business checking accounts is $200.
- Business Checking Non-Analyzed: A basic account that charges a monthly fee of $20, which can be waived with a minimum balance of $5,000. The debit transaction limit is 300 per statement cycle, with a transaction fee of $0.40 for every item after the limit.
- Business Checking Analyzed: An analyzed checking account that offsets fees with an earnings credit. It charges a monthly fee of $25.
- Business Checking Plus: An account designed for businesses with higher transaction volumes. It charges a monthly fee of $35, which can be waived with a minimum balance of $35,000. The debit transaction limit is 400 per statement cycle, with a transaction fee of $0.40 for every item after the limit.
- Business Interest on Checking: An interest-drawing account with an APY of 0.05. It charges a monthly fee of $25, which can be waived with a minimum balance of $6,000. The debit transaction limit is 300 per statement cycle, with a transaction fee of 40 cents for every item after the limit.
Business Debit Mastercard
The Farmers & Merchants Bank Business Debit Mastercard can pay for purchases at any location where Mastercard is accepted. It also allows you to withdraw money at Farmers & Merchants Bank ATMs.
Digital Banking
The bank offers digital banking on web browsers and mobile. Through digital banking, you can check balances, pay bills and taxes, transfer funds, approve transactions, and generate reports. Additionally, mobile banking comes with 15 free remote deposit capture transactions. You may add additional users to your account, but Farmers & Merchants Bank charges a $5 fee per additional user.
The mobile app (available on Android and iOS) is well received, with a rating of 4.4 on the Play Store and 4.6 on the App Store. According to reviewers, the app is stable and easy to use. However, some criticize the bill pay feature for being difficult to navigate.
Text Banking
If you enroll in text banking, Farmers & Merchants Bank will let you view account balances, make transfers, and review recent transaction history by sending your provider the designated text codes via short message services (SMS). Although the service is free under Farmers & Merchants Bank, your wireless carrier may charge fees for texts.
e-Statements
You have the option to receive your monthly statements online rather than by mail. If you don’t enroll in e-statements, Farmers & Merchants Bank will charge you a $3 fee for each mailed paper statement.
Accounting Software Integrations
Farmers & Merchants Bank checking accounts integrate with Quicken and QuickBooks.
Sweep Accounts
A sweep account is a cash pooling system that remits excess funds from your primary checking account into an interest-earning secondary account. To set up a sweep account, you must determine a target balance for your primary account. When your income increases your balance past the designated target balance, Farmers & Merchants Bank will transfer the excess funds to your sweep account automatically.
Zero Balance Accounts
A zero balance account is a cash pooling system that remits funds from your primary to maintain a balance of zero. The system disperses funds into secondary accounts for expenses, such as payroll, petty cash, or operating expenses.
Other Farmers & Merchants Bank Business Products
Savings Products
- Business market rate savings: A basic savings account that earns 0.05% APY and charges a monthly fee of $15, waivable with a minimum balance of $1,000. It has a withdrawal limit of 6 per quarter. The opening deposit requirement is $200.
- Business market rate money market: A money market account that earns 0.05% APY and charges a monthly fee of $15, waivable with a minimum balance of $4,000. It has no withdrawal limit. The opening deposit requirement is $200.
- Certificates of deposit (CDs): Timed deposits with terms between 7 days and 60 months. CDs have a minimum opening deposit of $1,000.
Lending Products
Farmers & Merchants Bank offers specialty lending for owner-occupied real estate, non-profits, and houses of worship; commercial real estate and construction loans, and commercial and industrial lending for short-term financing needs.
- Specialty lending group: With a team of lenders who specialize in owner-occupied real estate financing, tax-exempt bond financing, and nonprofit lending, Farmers & Merchants Bank can offer customized lending solutions for owner-occupied real estate, nonprofits, and houses of worship.
- Commercial real estate and construction loans: Farmers & Merchants Bank offers permanent loans, bridge loans, renovation loans, construction loans, and master loan agreements with no prepayment penalties and competitive rates and terms.
- Commercial and industrial lending: Offers lines of credit, equipment loans, and loans secured by inventory or receivables for businesses with short-term financing needs.
Business Credit Cards
Farmers & Merchants Bank offers low rates, flexible rewards, and cash back business Visa credit cards. All cards come with Zero Fraud Liability protection and free expense reporting tools. Cardholders may issue additional employee credit cards for free.
Farmers & Merchants Bank Business Checking Pros & Cons
| PROS | CONS |
|---|---|
| Unlimited check-writing, deposits, and transactions | Only operates in Southern California |
| Sweep accounts and zero balance accounts available | No fee-free accounts |
| Savings accounts, money market accounts, CDs, and lending products available | $5 fee per additional business account user |
All Farmers & Merchants Bank business checking accounts offer unlimited check-writing, deposits, and transactions, which can help you save on transaction fees. Sweep accounts and zero balance accounts take your money further: sweep accounts help you grow interest on excess funds, while zero balance accounts ensure every dollar earned goes into business expenses and investments.
Additionally, with a wide range of additional banking products (including savings accounts, money market accounts, CDs, and lending products) available, Farmers & Merchants Bank allows you to conduct all business banking activity under a single provider. However, it may not be the best choice if you operate outside of Southern California.
Businesses with lower monthly income may find the $20 monthly service fee and $5,000 minimum balance requirement too steep. Also, Farmers & Merchants Bank charges a $5 fee for every new user you add to your business account. If you prefer banking with a team, you may have to look elsewhere.
Alternatives to Farmers & Merchants Bank Business Checking
Although Farmers & Merchants Bank business checking accounts are comprehensive enough to meet most small business needs, its fees and transaction limits might feel restrictive. Today, businesses can take their money further by choosing online-only banks, which often offer lower fees, higher interest rates, and additional cost-saving features.
If you’re content with conducting all banking activity online, here are three options to consider:
- Novo* is best for fee-free ATM usage. It reimburses all ATM fees at the end of each month, giving organizations the freedom to make ATM transactions at any network of their choice.
- Bluevine* is best for earning interest on checking balances since it pays qualified accounts an APY of 1.50% on balances up to $100,000.
- Grasshopper is best for cash back on debit card purchases. It has a cash back rewards program that lets qualified cardholders earn 1% cash back on debit card purchases.
*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
With unlimited check-writing, deposits, and transactions, the business checking accounts of Farmers & Merchants Bank are a great option for organizations looking for affordable and comprehensive products. However, although the bank accepts non-Californian businesses, fans of in-person banking might prefer providers with wider geographic coverage.
