8 Best Business Banks in California Compared – 2024 Updated

On By karen-janowitz-california-business-journal

This post was originally published on this site

For a small business to thrive, a dependable banking partner is crucial. With numerous financial institutions providing unique products and services, choosing the right one can be challenging. This guide features a curated list of the top banks for small businesses in California. Continue reading to discover the perfect fit for your business needs.>> Apply for a Bluevine Account Today! >>

8 Best Banks for Small Businesses in California 

  • Bluevine: Best Secure Online Bank for Small Businesses in California
  • Lili:  Best User-Friendly Business Account
  • Capital One: Best Business Bank in California for Rewards
  • U.S. Bank: Best Bank for Its High-Level Financial Services
  • Bank of America: Best Bank for Small Businesses in California for Payment Services
  • Axos: Best Digital Banking App
  • Oxygen: Best Business Checking Account for Freelancers
  • Chase Business: Best Business Bank for Its Lines of Credit

Bluevine: Best Secure Online Bank for Small Businesses in California

Interest Rates: 2.0% APYBluevineis a favorite among small businesses for its secure online banking system. Their flexible financing options cater to various business needs. Additionally, Bluevine provides long-term loans and credit lines with favorable repayment structures and competitive interest rates. With no minimum deposit balance and minimal fees, Bluevine is an excellent choice.Why we chose it: Bluevine stands out as the top business bank account for LLCs and other business types due to its high interest rates, low fees, and no maintenance requirements.Pros

  • High-interest rates
  • Minimal fees
  • No minimum deposit requirement

Cons

  • No business savings account
  • No ATM fee reimbursement
  • Fee for cash deposits

Fees

Bluevine doesn’t charge monthly fees, so you can bank without spending a dime. However, using out-of-network ATMs will incur charges, so the mobile app is handy for finding free withdrawal sites. Cash deposits cost $4.95 each, so it’s best to use this feature sparingly.

Interest Rates

Bluevine offers an impressive 2.0% APY, which is 50 times the national average. This rate applies to balances up to $100,000. Any amount over this limit won’t earn interest.

Minimum Balance

Bluevine has no minimum balance requirement, allowing small businesses to start banking with minimal funds while still benefiting from the high-interest rate.

Access to Mobile Banking

The Bluevine mobile app makes banking convenient from anywhere. This well-designed tool allows you to manage accounts, track spending, pay vendors via wire or check, and schedule future payments with ease.>> Bluevine – Top Personal Bank California >>

Lili: Best User-Friendly Checking Account

Liliprovides a comprehensive, user-friendly business checking account that simplifies all your financial tasks. Designed specifically for freelancers and small business owners, Lili’s online checking account helps you manage your taxes seamlessly.With Lili, you can handle payments and other business transactions all in one place. You’ll save money with no fees or minimum deposit requirements. Managing your funds and financial transactions is just a tap away with Lili.Why we chose it: Lili’s low fees and tax optimization tools help businesses keep more of their hard-earned money. Additionally, it’s an excellent choice for an online business checking account with no credit checks.

Pros

  • Unlimited fee-free transactions
  • Integrated tools for expense management and tax planning
  • No fees, minimum balance requirements, or minimum opening deposit
  • Fee-free ATM access via the MoneyPass network; cash deposits possible through the Green Dot network
  • Early payment feature with direct deposit, allowing funds to be received up to two days earlier than traditional banks

Cons

  • Cash deposits at Green Dot locations carry a fee of up to $4.95 per deposit
  • No checkbooks; unable to send or receive wire transfers
  • Limited business features, such as no joint accounts, multiple business debit cards, or third-party integrations

Fees

Lili stands out with its free tax software and absence of account and overdraft fees. Enjoy no charges for foreign transactions or using over 38,000 in-network ATMs in the U.S. However, out-of-network ATM usage will cost you between $2.50 and $5.

Interest Rates

Lili’s Business Checking account doesn’t earn interest. For those interested, a savings account with 1.5% APY is available, but it requires maintaining at least $34,000 to cover the monthly fee.

Minimum Balance

Lili Bank’s checking account has no minimum balance requirement, allowing flexibility for new businesses or those with varying income levels, without the worry of monthly fees.

Access to Mobile Banking

Lili Bank’s mobile app is tailored for freelancers and small business owners, making financial management convenient. The app lets you control expenses, save for taxes, and handle payments. Features include instant payment notifications, budgeting tools, and mobile check deposits, all accessible from your devices.>> Apply for a Lili Bank Account Today! >>

Capital One: Best Bank for Small Businesses in California for Rewards

Interest Rates: 0.20% APYBanking with Capital Onebrings perks like cashback, travel rewards, and more. They offer attractive loans and merchant services, helping secure your financial future with savings accounts and CDs.Capital One provides an exceptional banking experience with advanced tech tools such as mobile apps and online banking. No matter where you are, you can effortlessly transfer funds and manage your account.Why we chose it: Capital One allows unlimited digital transfers, giving you the flexibility to keep your funds in motion.Pros 

  • Unlimited digital transfers
  • No overdraft fees
  • Extensive ATM network

Cons

  • Limited physical branches
  • Monthly account fee
  • Fees for using out-of-network ATMs

Fees

Capital One’s business accounts come with a $15 monthly fee, which can be a bit steep for small businesses. However, you can avoid this fee by maintaining an average balance of $2,000 over a 30 or 90-day period. Plus, there’s no charge for using any of Capital One’s 70,000 ATMs across the country.

Interest Rates

Opening a Capital One business savings account offers interest rates of up to 0.20% for the first year, applicable to balances up to $5 million, providing ample room for small businesses. The bank’s checking accounts don’t accrue interest, making the no-cost digital transfers even more appealing.

Minimum Balance

Capital One doesn’t require a minimum balance to keep your account active. However, keeping at least $2,000 in your checking account helps you avoid the $15 monthly service fee. Extra funds in your savings account can earn interest, benefiting your unused money.

Access to Mobile Banking

With few physical Capital One branches, their highly-rated mobile app is a lifesaver. You can handle transfers, make digital payments, and deposit checks using your device’s camera. The app also includes access to Capital One’s CreditWise service to monitor your credit score and provide helpful tips.>> Apply for a Capital One Bank Account Today! >>

U.S. Bank: Best Bank for Its High-Level Financial Service

Interest Rates: 0.01% APYU.S. Bank is ideal for small businesses looking for top-notch financial services. They offer flexible loan options, competitive rates, and favorable repayment structures. Plus, their services come with numerous rewards and incentives, such as cashback, Edge Cash Reward credit cards, and SBA cash rewards.Why we chose it: U.S. Bank provides a wide range of lending options, making it a great choice for small businesses in need of extra funds.Pros

  • 2,400 branch locations
  • Customized lending options
  • Specialized merchant services for restaurants, retailers, and service providers

Cons 

  • Overdraft fees
  • Relatively low APY
  • Branches only in 28 states

Fees

U.S. Bank’s Silver Checkingpackage for small businesses comes with no monthly fees. As your business grows, higher-tier accounts might have waivable monthly fees. Just monitor your monthly transactions to avoid charges for exceeding the limit.

Interest Rates

U.S. Bank’s checking accounts don’t offer interest-earning options. Their savings plans provide various benefits, with a maximum interest rate of 0.01%. Although minimal, there’s no cap on the balance for earning interest.

Minimum Balance

U.S. Bank’s Silver account package for small businesses has no minimum balance requirement. Other checking accounts may have waivable fees if you maintain the required balance. Savings accounts need a $500 minimum balance to avoid service fees.

Access to Mobile Banking

Away from a U.S. Bank branch? Use the mobile app for all your banking needs. Easily transfer funds between accounts and keep up with your financial status. U.S. Bank also offers customized alerts to keep you informed.>> Apply for a U.S. Bank Account Today! >>

Bank of America: Best Bank for Payment Services

Interest Rates: Up to 0.04% APYBank of America offers straightforward and efficient financial services tailored for small businesses. Their merchant services make credit and debit card payments seamless, ensuring customers can easily pay for services. With top-tier merchant services, they also provide robust fraud prevention tools and cash management solutions to help your business grow securely.Why we chose it: Bank of America’s rewards program offers numerous perks, making banking beneficial for everyone involved.Pros

  • Option to waive the monthly fee
  • Preferred rewards to enhance interest rates
  • Access to over 17,000 ATMs and 4,300 branches

Cons

  • Monthly fees
  • No 24/7 customer service
  • Transaction fees for using non-Bank of America ATMs

Fees

Bank of America’s basic checking account has a $16 monthly fee. You can avoid this fee by keeping a $5,000 monthly balance, spending at least $250 on your debit card, or joining the Preferred Rewards program. Additional fees include out-of-network ATM withdrawals and charges for excessive deposits in a month.

Interest Rates

Small businesses with a savings account at Bank of America typically earn 0.01% interest. This rate can increase to 0.04% with sufficient activity in their rewards program. However, checking accounts with Bank of America don’t earn interest.

Minimum Balance

To waive the $16 service fee on your checking account, maintain an average monthly balance of $5,000. For savings accounts, a $2,500 balance is required to avoid a $10 monthly fee.

Access to Mobile Banking

Bank of America’s mobile app is highly rated for its functionality. It allows you to manage accounts, pay bills, and transfer funds from anywhere. The app also features a budgeting tool to help monitor and control expenses.>> Apply for a Bank of America Account Today! >>

Axos: Best Digital Banking App

Axos Bank prioritizes its customers by delivering top-notch direct banking services. They ensure the security of financial transactions through Federal Deposit Insurance Corporation coverage. For small businesses aiming to invest, Axos Bank offers investment opportunities via their subsidiary, Axos Invest.They provide a range of services, including business banking, digital banking, and personal banking. This encompasses business checking accounts, savings accounts, and mobile pay deposits. Partnering with Axos Bank can greatly benefit your small business.Why we chose it: Free cash deposits and a low fee structure make Axos Basic Business Checking one of the top choices for business bank accounts.Pros

  • 24/7 customer support
  • No monthly fee with unlimited transactions
  • Unlimited reimbursements for domestic ATM fees
  • Cash deposits available through MoneyPass and AllPoint ATMs
  • Welcome bonus for new customers (terms apply)

Cons

  • No integration with third-party apps
  • Interest checking APY is decent, but not exceptional

Fees

Axos Bank Basic Business Checking doesn’t charge a monthly maintenance fee or require a minimum balance to keep your account open. They refund any ATM fees you incur each month, making this account virtually cost-free. However, if you frequently use wire transfers, note that Axos charges $35 per transfer.

Interest Rates

This account doesn’t offer an annual percentage yield, focusing instead on business perks. For those with extra funds, Axos provides interest-bearing business savings accounts to earn interest.

Minimum Balance

Axos Bank requires no minimum balance for its checking and savings accounts. Small business owners don’t need to maintain a specific balance to avoid fees, making Axos ideal for those with limited funds.

Access to Mobile Banking

Axos Bank’s mobile app is robust, enabling customers to manage accounts, deposit checks, transfer funds, pay bills, and initiate wire transfers from their mobile devices. The app also offers account alerts and budgeting tools to help you stay on top of your finances.>> Apply for an Axos Bank Account Today! >>

Oxygen: Best Bank for Its Business Offerings

Oxygenhas made a significant impact in the fintech world by delivering an exceptional banking experience and top-tier service. For those aiming to cut banking costs, Oxygen is an ideal choice. They offer no-fee banking, with zero charges for monthly maintenance and overdrafts.Their mobile banking allows you to manage your account from anywhere. Oxygen provides multiple deposit options for funding your business checking accounts, including mobile check deposits, direct deposits, and mobile transfers.Why we chose it: Oxygencaters to modern business owners with innovative banking features. It’s also one of the best checking accounts for sole proprietors.Pros

  • 5% cashback rewards
  • Tailored for trendy business owners
  • Ability to create virtual, single-use debit cards

Cons

  • No lending services
  • Virtual bank with no cash deposit option
  • Fewer integrations compared to other options

Fees

Oxygen promotes itself as fee-free across the board, though out-of-network and international withdrawals may incur charges. You won’t need to worry about fees for ACH transfers or maintaining your account.

Interest Rates

Your business checking account with Oxygenwon’t earn interest, but they offer a business savings account to compensate. Savings earn 1.0% interest on balances up to $20,000. Balances above this amount still accrue interest, though at a reduced rate.

Minimum Balance

Oxygen Bank doesn’t impose minimum balance requirements for its checking and savings accounts. Even with zero balance, you won’t face monthly fees. There are no charges for not maintaining a certain amount.

Mobile Banking Features

Oxygen’s mobile app is tailored for small business owners, allowing you to manage finances on the go. You can deposit checks, pay bills, and generate account statements. The app also provides spending insights to help track your finances.>> Apply for an Oxygen Bank Account Today! >>

Chase Business: Best Bank for Small Businesses in California for Its Lines of Credit

Interest Rates: Up to 0.02% APYChase Bank provides top-notch loans and credit lines tailored for small businesses. They offer a broad range of financial products and services, perfect for businesses seeking flexible, easy-to-repay loans. Their online and mobile banking systems are user-friendly and highly efficient.With Chase, you can manage your account, pay bills, and transfer funds from anywhere. They also ensure excellent security for financial transactions, featuring multi-factor authentication, fraud monitoring, and secure encryption.Why we chose it: Chase complements its traditional banking with an extensive list of merchant services to help your business thrive.Pros

  • $300 sign-up bonus
  • Wide range of merchant services
  • Various methods to waive the monthly maintenance fee

Cons

  • Monthly maintenance fees
  • Only 20 free transactions per month
  • Low APY

Fees

Chase Business Complete Banking starts with a $15 monthly fee. You can waive this fee by maintaining a daily balance of $2,000, making deposits through Chase QuickAccept, or using a Chase Ink Business Card. There are costs for transactions after the first 20, and wire transfers can be pricey, so avoid them if possible.

Interest Rates

Chase doesn’t offer interest on business checking accounts. To earn interest, you need to open a business savings account, which offers up to 0.02%.

Minimum Balance

To avoid the monthly service fee, keep at least $2,000 in your Chase checking account at all times. Falling below this amount even once per month will trigger the fee. Savings accounts are fee-free as long as you have an active checking account with Chase.

Access to Mobile Banking

The Chase mobile app offers more than standard banking functions. You can lock or unlock your credit card if it’s misplaced, use a budget planning feature to save for large purchases, and access credit monitoring tools to protect your credit health.>> Apply for a Chase Bank Account Today! >>

Methodology for the Best Business Banks in California

We evaluated several key factors to identify the best banks for small businesses in California, focusing on elements that impact account opening and management. Our detailed analysis ensures the accuracy of these findings.

  • Fees: Small businesses need to be mindful of every expense. We looked for banks that avoid excessive fees, such as maintenance charges, or offer ways to waive them easily. It was also important to find institutions with minimal costs for essential transactions and transfers.
  • Interest Rates: Even though business bank accounts are primarily for managing funds and making payments, earning some interest is a bonus. We highlighted banks that offer competitive rates on checking and savings accounts, with some exceeding the national average.
  • Minimum Balance: Many banks waive maintenance fees if you maintain a certain balance. Recognizing that small businesses might have limited funds initially, we identified banks with low balance requirements to avoid fees. Some also offer account minimums to unlock interest rates or rewards.
  • Access to Mobile Banking: In today’s fast-paced world, having banking services accessible via mobile devices is a significant advantage. We selected banks with excellent mobile banking apps that allow you to manage finances and make payments from anywhere. Even traditional banks are enhancing their mobile apps to compete with online-only institutions.
  • Ease of Use: We ensured our top picks for small business banking featured user-friendly services. This includes everything from straightforward transfers and payments to easy account opening with just an EIN. A bank account should simplify your financial management, not complicate it.

>> Bluevine – Top Personal Bank California >>

Best Business Banks in California – Frequently Asked Questions (FAQs)

Got more questions about opening a bank account for your California business? Find the answers you need in this FAQ:

What Are the Requirements to Open a Business Account in California?

To open a business bank account in California, you typically need business documentation, personal identification for all owners or authorized signers, and a minimum deposit. Some banks might also ask for additional documents like proof of address or a business plan.

Can I Open a Bank Account With My EIN Number?

Yes, opening a bank account with an EIN number is a smart move. Any business with at least one employee needs an EIN for tax purposes, and banks use this to register your account. If you’re the sole employee, you can use your Social Security Number (SSN) instead. However, using your SSN can mix personal and business finances, which isn’t ideal.

Can I Open a Business Bank Account Without an EIN in California?

No, you generally can’t open a business account without an EIN in California. Banks require an EIN for business account registration. If you don’t have one, you can apply for an EIN through the IRS website.

How Much Should a Small Business Have in a Bank Account?

It’s prudent to set aside at least six months’ worth of operating expenses as a safety net for any business disruptions. This reserve can support you during slow periods. If feasible, contribute at least 10% of your profits each month to build these savings further.

Bottom Line

If you own a small business in California, opening a business bank account is a wise move. It helps you manage finances, build strong customer relationships, and handle transactions efficiently. While Bluevinetopped our list, all the banks in our review are excellent choices.Always consider the ease of banking, available products, and services offered. If these factors align with your financial goals, you’re on the right track.> Bluevine – Top Personal Bank California >>

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