How To Choose the Right Business Bank Account and Products

Understanding these six financial products will set your online business up for success.

Choosing banking products might not be the most exciting part of launching an online business, but it’s a crucial decision that can impact your growth.

Despite the importance of understanding how to manage business finances, many business owners overlook these products or judge them by the same criteria used for personal financial products.

Taking the time to consider your business banking needs at the outset can save you a heap of administrative work, excess fees, and the frustration of switching banks later on.

Ahead, explore the key business bank accounts and products you should consider after launching your company.

6 types of business banking products

1. Business bank accounts
2. Credit and debit cards
3. Online business banking
4. Lines of credit
5. Payroll services
6. Cash management services

Business banking products are designed to help companies maintain stable cash flow, organize finances, and facilitate growth. These products, though similar to those for individuals, come with different eligibility criteria, interest rates, and other terms.

1. Business bank accounts

Having a business bank account is crucial in keeping your personal finances separate from your business dealings—an essential practice for financial clarity. That might sound obvious, but many merchants fail to choose a business bank account when launching their ventures.

Maintaining separate bank accounts for business and personal transactions may also be a legal requirement, depending on your business structure. It will make it easier to write financial statements and avoid tax liabilities.

Most online merchants open accounts with retail banks, which are different from investment banks. Investment banks are typically larger and cater to institutional investors and entities in capital markets.

What to look for in a business bank account

• Fee structure: Aim for accounts with features like Shopify Balance, which has no fees to minimize overhead.
• Bank services: Look for value-added services like integration with accounting software, stellar customer support, and easy data export options.
• Account accessibility: Ensure the bank offers convenient online and mobile banking services. Accessibility can make a real difference in how efficiently day-to-day financial tasks are handled.

Common business bank account fees

• ATM fees: Banks apply these charges to cash withdrawals at ATMs. Costs can range from less than a dollar to as much as $3.
• Cash deposit fees: This fee is usually a percentage of the amount deposited beyond a monthly allowance. Fees can range from 1% to 5%.
• Monthly service fees: This is how much the bank will charge you each month for maintaining an active account.
• Transaction fees: Transaction fees are charges that banks apply to each transaction beyond an agreed number, which is typically around 100 or so transactions per month.
• Wire transfer fees: If you plan on allowing your customers to pay via wire transfer, your bank might apply wire transfer fees to these transactions. These are typically calculated as a percentage of the total amount transferred.

2. Credit and debit cards

Get up to 3% cashback on eligible purchases with Shopify Credit.

Choosing a business credit card is an important consideration when opening a business bank account, as the two products are closely linked. Accounts offer different types of cards, each with bespoke bonus or loyalty programs, fees, and other terms. 

Look for cards like Shopify Credit that offer volume rewards and no annual fees.

What to look for in business credit and debit cards

• Cost-effectiveness: Favor cards with low transaction fees and no minimum balance requirements.
• Security features: Ensure cards include modern security measures such as EMV chips and PIN authentication to safeguard your financial transactions.
• Overdraft options: Understand the terms for overdraft protection and any associated fees.
• Tap to pay: Contactless payment can make your life easier.
• Credit needs: Consider whether a line of credit or credit card is best for your business needs.

3. Online business banking

Online banking capabilities are essential for managing your business finances efficiently. Regardless of what kind of account you open, online banking gives you the ability to quickly respond to changes in the business environment.

What to look for in online business banking

• Real-time updates: Choose a platform that updates account balances and transactions quickly to help maintain accurate financial records.
• Comprehensive services: Look for features like online check deposits, advanced payment solutions, and user-friendly interfaces that enhance your banking experience.
• Security: Strong security protocols like two-factor authentication and secure encryption are vital to protect your financial data online.
• Digital first: Consider whether a bank is “online first.” Do you prefer doing all your banking business online, or do you want the option of visiting a branch?

4. Lines of credit

Instead of a hard credit check, Shopify lines of credit are based on a unique, in-depth view of your business.

Lines of credit, used as a fast alternative to small business loans for things like cash flow and equipment financing, provide flexible funding solutions that are vital for continuous business operations and growth.

What to look for in business lines of credit

• Flexibility: Opt for lines of credit that offer flexible withdrawal options and repayment terms, like revolving lines of credit.
• Interest rates: Compare interest rates and look for competitive options that will not strain your finances.
• Usage terms: Understand the conditions under which you can draw on your line of credit and any associated fees.

5. Payroll services

Efficient payroll services are essential for ensuring your employees are paid accurately and on time, while also handling records and complying with tax regulations.

What to look for in payroll services

• Automated processing: Automation helps minimize errors and reduce admin workload. Services should handle everything from salary calculations to paycheck distribution.
• Regulatory compliance: Your payroll product should ensure your business remains compliant with current tax laws, handling payroll deductions and year-end forms.
• Detailed analytics: Access to payroll reports can help you monitor labor costs and budget effectively.
• Support: Customer support and useful learning materials, such as guides on payroll accounting, will help you navigate the complexities associated with payroll management.

6. Cash management services

Shopify Balance is an all-in-one business financial account with zero fees and rewards for everyday business purchases.

Effective cash management is pivotal to the financial health of any business. It ensures that you have enough cash flow to meet your obligations and supports strategic decision-making.

What to look for in cash management services

• Cash flow forecasting: Find a product that helps predict future cash inflows and outflows, enhancing your ability to prepare for potential shortfalls. Understanding the basics of cash flow management will help save your business from liquidity issues.
• Real-time analytics: Insights into your financial status can help you make informed decisions quickly. Services that offer detailed analytics support better business money management, ensuring every dollar is accounted for.
• Integration capabilities: Look for cash management services that integrate with your existing accounting or ERP systems.

The best online business banking doesn’t come from a bank

If you run an online business, traditional banks might not meet all your needs. Learn more about how Shopify’s financial products offer tailored, flexible solutions to grow your business without traditional commitments or fee structures.

*Shopify Capital loans must be paid in full within 18 months, and two minimum payments apply within the first two six-month periods.

Business bank account FAQ

How do I get funding for my ecommerce business?

Securing funding for your online store is straightforward with Shopify Capital, which tailors funding to align with your sales, meaning you repay based on how well your store is performing.

Do I need a business bank account for Shopify?

While you do not need a business bank account to use Shopify, it is generally recommended to open a business bank account when starting an online business.

Which business bank account is best for an ecommerce business?

Select a bank account that suits the dynamic nature of an ecommerce business. Prioritize features such as no minimum balance, no monthly fees, and a strong digital banking platform.