Recommendations for business bank account for LLC?

[Quirkz]

I'm forming an LLC with a business partner and am looking for a business bank account.

We're in Amazon book sales, if it matters. So probably low volume, likely low balance, but because it's a partnership I want to keep it separate from any of our personal accounts. Only requirements are low fees, direct deposit, and maybe debit cards. I don't think we really even need checks.

My current personal bank is Wells Fargo, and I'm not happy enough with them to even consider a new business account. They regularly messed up the old one that I used to have, and drove me away with fees. They are also the only bank in the small town where I work, and while there are some credit unions closer to home, my schedule would almost never overlap so a physical presence is not especially useful. I'm fine with mostly/entirely online, if that exists. Any recommendations would be appreciated.

Edited to add: I've done a little research, and I do see online banks that cater to small businesses and entrepreneurs, including Small Business Bank, Novo, or Azlo. Anyone have any experience with any of them? Small Business Bank seems like it might be a good fit, but I've got no idea about reputation.

[pkjr]

I have 2 business account with Fidelity but I also have a free account with a local credit union for ACH payments (real estate business)
I hope that helps.

[SRenaeP]

I use Capital One Spark business checking. I have no complaints but I'm not a heavy user either. I get 2-3 payments electronically deposited monthly, 2 payments on monthly autopay then 2-3 manually transfers out monthly.

[Glockenspiel]

I will only consider credit unions or local, small chain banks for all my banking needs. Your local credit union will offer banking with no monthly fees and a slightly better interest rate on deposits than the large national banks. My wife has an LLC bank account with our local credit union and it's been great so far.

[RickBoglehead]

I use Capital One Spark business checking. I have no complaints but I'm not a heavy user either. I get 2-3 payments electronically deposited monthly, 2 payments on monthly autopay then 2-3 manually transfers out monthly.

Capital One Spark has been closed to new accounts while they "make improvements". Been that way for a while. https://www.capitalone.com/small-business-bank/

[Quirkz]

While I understand the plug for credit unions, it's not going to help me much. I live in a small town and work half an hour away in a smaller town. The local credit union (there's only one) is open 8:30-4:30 M-F. I'd have to take a vacation day just to go in and talk to them, and their reputation (on Yelp, taking it with a grain of salt) is not that great. The local chains aren't much different, though one of them is open late enough if I rushed out of work I could maybe catch them 20 minutes before closing one day a week.

I looked at Fidelity, but it looked like all of the business accounts I saw were investment accounts. I don't think I need that. Just a separate container to collect and distribute income, and make some very rare business purchases. Capital One sounds like it would have worked, if they were open to new customers.

I may take a chance on Small Business Bank, and will report back on the results since it seems to be a relative unknown.

[focusedonwhatmatters]

Quirkz,

I'm curious which bank you went with, and what your experience has been.

Thanks in advance,

fowm

[TLB]

I have been real happy with Chase. A couple of years ago my Attorney set me up with multiple LLC’s and a few management companies for my asset protection plan. I don’t know if I got lucky with this local branch but they really took care of all my needs. Fees are reversed every month for all checking accounts and they have a great website that I can transfer money in and out without any issues so far.
I still have an account with Wells Fargo and I tried going with them first but I spent so many hours giving their legal team documents after documents, I gave up and went to Chase.
Chase also has some great credit cards.

[Quirkz]

Quirkz,

I'm curious which bank you went with, and what your experience has been.

Thanks in advance,

fowm

Thanks for asking, but I haven't managed to get to that stage yet. The business plans are developing slower than I'd hoped, and it looks like we're still a few months out from incorporating and setting up banking. Unless Capital One Spark has or will re-open before that point, I'll still probably be giving Small Business Bank a shot.

[dm200]

I would look for a bank or credit union that has a convenient physical branch. I would also look for an institution that does not, routinely, place extended holds on your deposits.

For an institution I used to manage (part time), we had excellent results with BB&T - soon merging with Suntrust.

[yosh99]

When I started my small business 17 years ago I did some research and decided that US Bank had the most promising web site features. I went to the local branch and was told to take a seat. I waited and waited and after 20 minutes left and walked to the local community bank a few blocks up the street. I was in and out with my business account in 10 minutes. I love the service and that they know my name. It's hard to beat something local.

[HawkeyePierce]

I recently opened a small business checking account at BBVA. So far it's been fine but I don't have much activity on it. The only downside is you have to visit a branch in person to finish setting up the account, which means listening to the branch manager's inevitable pitch about how you should also sit down with their financial advisor.

They have no minimum balance and no monthly service charge, which is why I picked them.

[tfb]

I looked at Fidelity, but it looked like all of the business accounts I saw were investment accounts. I don't think I need that.

It is a brokerage account but you are not required to invest. Just leaving the money in the default money market fund is fine. You won't be able to deposit or withdraw physical cash though.

[Quirkz]

I looked at Fidelity, but it looked like all of the business accounts I saw were investment accounts. I don't think I need that.

It is a brokerage account but you are not required to invest. Just leaving the money in the default money market fund is fine. You won't be able to deposit or withdraw physical cash though.

Hm. I guess the question is, will it take direct deposit from various online retailers, like Amazon? I don't want to get halfway through setup and find out that one of them doesn't want to do business that way.

[tfb]

Hm. I guess the question is, will it take direct deposit from various online retailers, like Amazon? I don't want to get halfway through setup and find out that one of them doesn't want to do business that way.

It has a routing number and account number like any other bank account. You can use them to receive direct deposits and pay expenses by direct debits.

[Quirkz]

Good to know. Thank you.

[betablocker]

While I understand the plug for credit unions, it's not going to help me much. I live in a small town and work half an hour away in a smaller town. The local credit union (there's only one) is open 8:30-4:30 M-F. I'd have to take a vacation day just to go in and talk to them, and their reputation (on Yelp, taking it with a grain of salt) is not that great. The local chains aren't much different, though one of them is open late enough if I rushed out of work I could maybe catch them 20 minutes before closing one day a week.

I looked at Fidelity, but it looked like all of the business accounts I saw were investment accounts. I don't think I need that. Just a separate container to collect and distribute income, and make some very rare business purchases. Capital One sounds like it would have worked, if they were open to new customers.

I may take a chance on Small Business Bank, and will report back on the results since it seems to be a relative unknown.

I use fidelity. It’s just a cash management account. Benefit is you can park money in higher yielding money markets. Downside is they don’t clear incoming funds very fast. We keep a lot of cash so the high interest is worth it.

[tfb]

I use fidelity. It’s just a cash management account. Benefit is you can park money in higher yielding money markets. Downside is they don’t clear incoming funds very fast. We keep a lot of cash so the high interest is worth it.

Direct deposits initiated externally ("pushed in") are available immediately. Check deposits and ACH transfers initiated from Fidelity ("pulled in") are subject to a hold of 4 business days.

[boglenomics]

I use Capital One Spark business checking. I have no complaints but I'm not a heavy user either. I get 2-3 payments electronically deposited monthly, 2 payments on monthly autopay then 2-3 manually transfers out monthly.

Capital One Spark has been closed to new accounts while they "make improvements". Been that way for a while. https://www.capitalone.com/small-business-bank/

I'm a Spark user and have loved it. However, I have noticed they've been removing features. They removed the app, then they removed bill pay.

Makes me worried they're planning to kill it off entirely at some point. Doesn't make much sense since it seemed profitable for them but shutting down now seems inevitable. Probably going to switch elsewhere by end of year to avoid a scramble when they decide to shut down.

[Quirkz]

It's been a lot slower than anticipated, but I did want to follow up on this one. I'm not 100% into full business mode, but figured it would be better to document as I went.

I ended up going with Small Business Bank because it seemed easy to set up online, had a low minimum balance ($5) and no fees. Online reviews were mixed, including some possible issues with a small staff and not-great support, but once you're past setup most of the time the account just runs itself so I figured it was worth trying.

Application wasn't too bad. Pretty straightforward questions. I did things out of order and tried to create the account before I'd gotten an EIN from the IRS, so I had to go back and update that with the bank, along with uploading a few other pieces of identification that I would have had to upload anyway. One example of iffy service: at one point someone called for information and when I called back the next person insisted I didn't need to give them the information, and I had to call back later and get someone else. Every other time I talked to someone (3-4 times total) it went smoothly.

Something went wrong with my business partner side of things. Supposedly he should have gotten an email so that he could also fill out his personal info. He couldn't find it the email, which may be on him or his email but might have been on the bank. They eventually gave me the link that I passed on and then it worked fine.

Finally, I I felt like they really hid the necessary info to set up direct deposit. Maybe this would be obvious to others, but it took me a long time to figure out I wanted Helpful Links > Incoming Wire Instructions. Still, I did find it, and after that setup was easy.

Anyway, while not perfectly smooth, it wasn't too much of a hassle, relatively speaking, for dealing with a bank. I think at this point all the back-and-forth is over with, and the rest ought to be pretty straightforward checking account usage. We're maybe a month from actually getting into real business transactions (putting the book up for sale), so I'll report back in a few months once I've successfully seen statements and gotten money out of them, etc., but so far it seems like a viable option.

[dm200]

It's been a lot slower than anticipated, but I did want to follow up on this one. I'm not 100% into full business mode, but figured it would be better to document as I went.
I ended up going with Small Business Bank because it seemed easy to set up online, had a low minimum balance ($5) and no fees. Online reviews were mixed, including some possible issues with a small staff and not-great support, but once you're past setup most of the time the account just runs itself so I figured it was worth trying.
Application wasn't too bad. Pretty straightforward questions. I did things out of order and tried to create the account before I'd gotten an EIN from the IRS, so I had to go back and update that with the bank, along with uploading a few other pieces of identification that I would have had to upload anyway. One example of iffy service: at one point someone called for information and when I called back the next person insisted I didn't need to give them the information, and I had to call back later and get someone else. Every other time I talked to someone (3-4 times total) it went smoothly.
Something went wrong with my business partner side of things. Supposedly he should have gotten an email so that he could also fill out his personal info. He couldn't find it the email, which may be on him or his email but might have been on the bank. They eventually gave me the link that I passed on and then it worked fine.
Finally, I I felt like they really hid the necessary info to set up direct deposit. Maybe this would be obvious to others, but it took me a long time to figure out I wanted Helpful Links > Incoming Wire Instructions. Still, I did find it, and after that setup was easy.
Anyway, while not perfectly smooth, it wasn't too much of a hassle, relatively speaking, for dealing with a bank. I think at this point all the back-and-forth is over with, and the rest ought to be pretty straightforward checking account usage. We're maybe a month from actually getting into real business transactions (putting the book up for sale), so I'll report back in a few months once I've successfully seen statements and gotten money out of them, etc., but so far it seems like a viable option.

Depending on the nature of the business, one important factor may be whether and/or how long the bank or credit union places holds on your check deposits. In my experience, this can be a somewhat "subjective" decision by the bank or credit union. There are various things you can do that will help to decrease holds and hold times on your deposits. These include never bouncing a check, trying to keep a somewhat larger (if possible) balance in the account, have some other relationship with the bank or credit union (such as business credit and debit cards), overdraft protection of some kind, keeping your personal accounts there as well, and establishing a friendly and personal relationship with a local branch. One of the very common challenges of small and startup businesses is "cash flow" and if long holds are placed on your deposits, your cash flow is hampered.

[Quirkz]

@dm200 - great points, depending on the nature of the business.

Ours is selling a book online, which already has glacier-slow royalty payments baked into the model. We expect small amounts to trickle in over long periods of time. We'll have very few expenses and will just empty the account now and then. I'm looking less for a personal relationship than a minimally expensive pool where two guys can split profits while keeping the accounting easy. Our wildest dream scenario is we add a couple more books to the product offering and maybe have a few thousand in the account at any given time. As long as it's simple and works, we're happy.

But you're right, for businesses with higher transactions, more demanding time-frames, or more complicated models, this might not be the appropriate kind of account.

[dm200]

@dm200 - great points, depending on the nature of the business.
Ours is selling a book online, which already has glacier-slow royalty payments baked into the model. We expect small amounts to trickle in over long periods of time. We'll have very few expenses and will just empty the account now and then. I'm looking less for a personal relationship than a minimally expensive pool where two guys can split profits while keeping the accounting easy. Our wildest dream scenario is we add a couple more books to the product offering and maybe have a few thousand in the account at any given time. As long as it's simple and works, we're happy.
But you're right, for businesses with higher transactions, more demanding time-frames, or more complicated models, this might not be the appropriate kind of account.

Might you need or want any in person bank or credit union services - such as getting signatures notarized, purchase cashiers checks, etc.? Will you, or might you need to withdraw any money in cash?

Even if you do not need or want certain things now (such as no holds on check deposits), it is always possible you might need/want such capabilities in the future. So, it never hurts to develop and maintain a personal relationship with the folks at the "brick and mortar" branch.

[Quirkz]

You're listing reasons to have *a* local bank, and I do have that for my personal checking and savings. I'm covered if I need a notary or cash, or other in-person things.

But I didn't like any of the local offerings for the business account, so I went online for that. I strictly needed a separate account for a partnership, so that I could do the accounting on that money separately from my other personal finances.

[dm200]

You're listing reasons to have *a* local bank, and I do have that for my personal checking and savings. I'm covered if I need a notary or cash, or other in-person things.
But I didn't like any of the local offerings for the business account, so I went online for that. I strictly needed a separate account for a partnership, so that I could do the accounting on that money separately from my other personal finances.

OK - sounds like you are OK.

[Quirkz]

It's been a year, but I wanted to follow up at the conclusion. Short of it is I do not recommend Small Business Bank.

In fact, I never managed to fully activate an account with them. I would fill out forms, think I was done, and then find out later that something else needed to be completed, but in most cases they hadn't asked me for it, and I had to find out by calling in and seeing why things weren't working. Communication was generally poor. I'd get a voice mail asking for X, but then call back and have someone else tell me they didn't want X. I'd have to call later and get someone else. My account actually closed due to inactivity because we couldn't get it activated. They reactivated it for me, but wanted more info from my business partner, and when he called back they swore up and down accounts couldn't be reactivated for any reason, and what they'd told me before was impossible.

So in short: avoid them, try somewhere else.

I did not find another free, online checking account that I liked the looks of. If this was a larger business I'd probably just accept an account with fees, but for this hobby project I'm giving up and just having this small side business deposit directly into my personal checking. I've got a sales dashboard and 1099 forms to help keep the business income straight.