As a solopreneur, most of my financial business is done online or with mobile apps. I’ve seen the benefits of technology and how going digital makes me more productive and streamlines my life.
Oddly enough though, many consumers and small business owners (about half!) still bank at traditional banks! And some freelancers I’ve spoken to don’t even have separate accounts for their business and personal transactions.
It’s time you embrace technology and the benefits it offers, so you can spend less time working and more time enjoying the fruits of your labor.
Benefits to Opening a Separate Business Bank Account
If you do nothing else for your business opening a separate business checking account is a must! Why?
For multiple reasons, but the main one is because it will be a whole lot less of a headache for you. By separating your business income and expenses you create a line between professional and personal.
This is especially handy come tax time when you can create year end reports for your bookkeeper or CPA. And if you’re ever audited, you can prove your business is legit much more effectively. Besides, you wouldn’t want the IRS (or your CPA) poking through your personal income and expenses in order to locate your business transactions.
You can also customize the name on your account and checks to help you appear more credible to other contractors and freelancers you pay. Even if your business isn’t an LLC yet, you can still apply for a DBA (doing business as) and different Tax ID number.
Lastly, another advantage is that you can link your bookkeeping software to your dedicated business account, which makes it super easy to print out monthly and yearly reports. You won’t have the hassle of excluding personal transactions from the business ones while categorizing them.
For the simplicity of all these factors and that it casts a more professional light on your business, it’s vital you open a business checking account.
The Best Business Checking Accounts
So what are the best accounts for freelancers and solopreneurs? I’ve done the research and tested the top business checking account picks for freelancers and solopreneurs.
1. Capital One 360
While this bank used to be called ING Direct, I’ve had no issues with the Capital One takeover and still enjoy this bank as my account. Capital One 360 accounts come with no minimums, no fees, and free checks, so it’s a no brainer for me and my business.
A Capital One 360 account provides customers with a free MasterCard debit card, access to 38,000 fee-free Allpoint ATMs and 2,000 fee-free Capital One ATMs, as well as free mobile check deposits.
These features are super useful since a lot of my business is done virtually and on-the-go and since Capital One Banks are pretty popular (at least in the South) I can find an ATM whenever I travel.
Interest rates for checking accounts are generally low, but at least a Capital One 360 account will help you grow your cash a little bit since they offer some of the better rates compared to a brick-and-mortar bank.
My accounts with Capital One 360
One of the things that I like most about Capital One 360 is the fact that you can have multiple checking and savings accounts. This is very convenient for setting aside funds for income taxes throughout the year, money for conferences and business events, as well as a business emergency fund.
Additionally you can set up goals for your various accounts and track your progress throughout the year. This is something I love doing so I know where I’m with my revenue for the year!
2. Discover Bank
You may not realize that Discover isn’t just for using credit cards to earn cash back or balance transfers to get out of debt faster. They actually offer some pretty great checking accounts and banking options for individuals and small businesses.
One of the things I like best about their service is the fact they offer cash back with all their products — without using credit cards and going into debt. Yep, you can use your Discover Bank debit card to earn $0.10 on every purchase you make.
My accounts with Discover Bank
That can really add up when you’re making purchases for your business, like flights, meals, books and office supplies. As small business owners we need all the extra cash back we can earn to re-invest into our businesses.
Their customer service is also outstanding and I’ve never had any issues with security. Their mobile app allows you to check your balance, make transfers and even deposit checks with one click.
They also have some of the best interest rates available with a money market account and you can get unlimited free checks while you have an account.
3. Ally Bank
Another great option is the often-talked about Ally Bank! It has no minimum deposit to open, zero maintenance fees, and free mobile banking and smartphone applications.
An Ally Bank account will provide you with free Ally ATM access at any ATM nationwide, unlimited check writing, and convenient Ally echeck deposit capabilities. You also get access to free online bill pay.
Debit cards I use for my business checking accounts
Ally Bank offers customers interest-bearing checking accounts, compared to Capital One 360 which doesn’t have this feature. And their customer service is fabulous! I’ve even met some of the team at the Financial Blogger’s Conference a few years back.
4. TD Bank
For another solid business account option, TD Bank BusinessDirect is a great choice! They offer free bill pay, full compatibility with Quicken and QuickBooks and a free business Visa card with special discounts for cardholders.
And since it’s owned by the same company that does TD Ameritrade, you can access your business finances along with your investments.
TD Bank BusinessDirect provides you with peace of mind with enhanced account security and real time transaction information. It also has the benefit of brick-and-mortar banks if you aren’t quite ready for the virtual-only business yet.
Currently, TD Bank does not offer interest on its checking accounts, with the exception of its Business Interest Checking Plus Account, for which it offers 0.05%.
You should know that they only offer checking accounts in certain states with the U.S. so this might not be the best option for your business.
What bank account do you use for your small business? Share your comment on Twitter or send an email to carefulcents@gmail.com.