For small businesses, choosing the right banking partner is crucial for success. Finding the perfect fit is challenging with many financial institutions offering a range of unique products and services.
This guide provides a curated list of the best banks for small businesses in California, helping you find a bank that meets your business’s specific needs. Continue reading to discover the ideal banking partner for your enterprise.
To identify the top banks in California, we evaluated several factors, including the variety of services and products each bank offers. We considered the costs associated with maintaining accounts, such as the minimum balances required to avoid these fees. We also scrutinized the banking features provided by each institution.
Further analysis included examining the fees charged for various bank services and the interest rates offered to potential customers. This comprehensive approach ensures that we recommend banks that meet diverse financial needs and offer cost-effective solutions for small businesses.
>> Open a Business Bank Account With Bluevine >>
Bluevine has gained popularity among small businesses as a secure online banking platform. It provides flexible financing options tailored to suit the diverse needs of various businesses.
Additionally, Bluevine offers long-term loans and credit lines specifically designed for small enterprises. These financial products come with borrower-friendly repayment structures and competitive interest rates. The absence of a required deposit balance and minimal fees further enhance its appeal.
Why we chose it: The combination of high interest rates on deposits, minimal banking fees, and no maintenance requirements positions Bluevine as the top choice for business bank accounts, whether for LLCs or other types of businesses. This makes it an attractive option for entrepreneurs looking for a cost-effective and efficient banking solution.
Pros
Cons
With Bluevine, you won’t encounter any monthly fees, allowing you to bank without incurring regular costs. However, using out-of-network ATMs will incur charges, so it’s beneficial to use the mobile app to locate ATMs where you can withdraw cash for free. Each cash deposit incurs a fee of $4.95, so it’s advisable to limit cash deposits if possible to minimize costs.
Bluevine stands out significantly by offering a 2.0% APY, which is 50 times the current national average. Premier customers can also enjoy an impressive 4.25% APY. This attractive rate applies to balances up to $100,000. However, it’s important to note that any funds exceeding this amount will not earn interest. This feature makes Bluevine an excellent option for small businesses looking to maximize their earnings on available cash without incurring additional risks.
Bluevine doesn’t require a minimum balance, allowing small businesses to start with virtually any amount in their account. This flexibility means that businesses can begin earning a high interest rate immediately, regardless of their initial deposit size, making it an accessible option for businesses at any stage of growth.
The Bluevine mobile app simplifies banking on the go, offering a well-designed interface that allows for easy management of your accounts. With the app, you can quickly check your balances, track where your money is going, and handle transactions. It also enables you to pay vendors via wire or check and schedule payments for future fulfillment, adding convenience and efficiency to your financial operations.
Lili provides a streamlined, all-in-one business checking account that’s designed to meet the unique needs of small business owners. It offers a straightforward, user-friendly online checking account that not only simplifies managing your taxes but also supports all your payment and business transaction needs in one place.
You can save more thanks to the absence of fees or minimum deposit requirements. With Lili, managing your finances is as simple as a few taps on your device.
Why we chose it: Lili stands out due to its minimal fees and tax optimization tools, which help businesses preserve more of their hard-earned money. For those in search of an online business checking account that requires no credit checks, Lili presents an excellent choice.
Pros
Cons
Lili stands out, particularly for its complimentary tax software, and business owners will appreciate the absence of account and overdraft fees. There are no charges for foreign transactions or for using any of the over 38,000 in-network ATMs across the United States. However, if you use an ATM outside of the network, be prepared for a fee ranging from $2.50 to $5.
Lili’s Business Checking account doesn’t earn interest. However, for those willing to pay for additional features, there’s a savings account option available that offers a 4.15% APY. It’s important to note that you’ll need to maintain a minimum balance of at least $34,000 in your account at all times to counterbalance the monthly fees associated with this higher-yield savings option.
Lili Bank offers a checking account with no minimum balance requirement, making it an attractive option for those just starting a business or dealing with variable income. This feature ensures you won’t need to maintain a specific balance to avoid monthly fees, providing flexibility and easing financial management for emerging or fluctuating businesses.
Lili Bank’s mobile banking app is explicitly tailored for small business owners, enabling them to manage their finances directly from their mobile devices. The app facilitates various financial activities, including tracking expenses, setting aside money for taxes, and handling payments.
It’s equipped with features like instant payment notifications, budgeting tools, and the capability to deposit checks via your mobile device, making it a comprehensive tool for managing business finances on the go.
Lili is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Member FDIC.
Banking with Capital One provides a variety of rewards, including cashback, travel perks, and other benefits. They also offer loans with favorable interest rates and merchant services to support business operations. In addition, Capital One helps secure your financial future through various services such as savings accounts and CDs.
Capital One is known for delivering one of the best banking experiences, enhanced by advanced technological tools such as mobile apps and online banking. These tools enable you to manage your accounts and transfer funds effortlessly, regardless of location.
Why we chose it: Capital One stands out due to its unlimited digital transfers, offering you the flexibility to move funds as needed with no restrictions.
Pros
Cons
Capital One charges a $15 monthly fee for its business accounts, which might be significant for a small business. However, this fee can be waived by maintaining an average balance of $2,000 over a 30 or 90-day period. Using any of Capital One’s 70,000 ATMs across the nation incurs no charges, offering convenient access to your funds without extra costs.
Opening a business savings account with Capital One offers interest rates of up to 0.20% during the first year, applicable to balances up to $5 million. This provides ample flexibility for small businesses to grow their savings. While Capital One’s checking accounts don’t offer interest, the benefit of free digital transfers adds considerable value, facilitating easy management of funds without additional costs.
With Capital One, there’s no requirement to maintain a minimum balance to keep your account open. However, it’s advantageous to keep at least $2,000 in your checking account to avoid the $15 monthly service fee. Depositing extra funds into your savings account can earn you some interest on money that’s only sometimes needed for daily operations, making your finances work harder for you.
Given the limited number of physical Capital One branches, the bank’s highly-rated mobile app is a crucial tool for managing your finances. Through the app, you can perform transfers, make digital payments, and deposit checks using your device’s camera.
The app provides access to Capital One’s CreditWise service, which allows you to monitor your credit score and offers helpful tips to improve it, enhancing your banking experience significantly.
U.S. Bank is an ideal choice for small businesses looking for comprehensive financial services. They offer a range of flexible loan options that come with competitive rates and adaptable repayment structures.
Customers can benefit from many rewards and incentives for using their services, such as cashback, Edge Cash Reward credit cards, and SBA cash rewards.
Why we chose it: Small businesses seeking additional funding will find U.S. Bank an excellent resource due to its wide array of lending options, catering to various financial needs and helping businesses grow and manage their operations effectively.
Pros
Cons
With U.S. Bank’s silver checking package for small businesses, you won’t have to deal with monthly fees. As your company expands and you move to higher-tier accounts, be aware that there are waivable monthly fees associated with these options. It’s important to monitor your monthly transactions closely to avoid incurring extra charges for exceeding transaction limits.
U.S. Bank’s checking accounts don’t offer any interest-earning options. While their savings plans include various perks, the highest interest rate available is currently only 0.01%. Although this rate is quite low, the advantage is that there’s no cap on the balance for earning interest, allowing you to accumulate earnings on any amount stored in the account.
U.S. Bank’s silver account package for small businesses comes without a minimum balance requirement, making it an accessible option for new or small-scale businesses. For other checking accounts, fees can be waived if you maintain the necessary balance amounts. For savings accounts, a minimum balance of $500 is required to avoid service fees, providing a clear threshold for businesses looking to manage their expenses efficiently.
If you’re far from a U.S. Bank physical branch, their mobile app allows you to manage all your banking needs remotely. The app enables seamless transfers between accounts and helps you stay informed about your financial status.
Additionally, U.S. Bank enhances the experience by providing customized alerts to keep you updated on important account activities and changes, ensuring you remain well-informed no matter where you are.
Bank of America simplifies financial services for small businesses, offering robust merchant services that facilitate smooth credit and debit card transactions. This makes it straightforward for customers to pay for services.
They’re recognized for having one of the best merchant services available. Bank of America provides tools for fraud prevention and cash management solutions that contribute to both the growth and security of your business.
Why we chose it: Bank of America’s rewards system is packed with many perks, making banking beneficial for all parties involved. This approach ensures that businesses not only manage their finances effectively but also gain tangible benefits from their banking relationship.
Pros
Cons
Bank of America’s basic checking account has a $16 monthly fee, which can be waived by maintaining a $5,000 monthly balance, spending a minimum of $250 with your debit card, or by enrolling as a Preferred Rewards member. The primary fees to be aware of include those for out-of-network ATM withdrawals and charges for excessive deposits within a single month.
Most small businesses starting a savings account with Bank of America will receive an interest rate of 0.01%. However, active participation in Bank of America’s rewards system can boost this rate to 0.04%. It’s important to note that there are no options for earning interest on Bank of America’s checking accounts.
Maintaining an average monthly balance of $5,000 in your checking account will waive the $16 service fee. Likewise, to avoid a $10 monthly fee on your savings account, keep at least $2,500 in it. This setup helps you manage fees effectively by maintaining specified balance thresholds.
Bank of America’s mobile app is highly regarded for its functionality and user-friendliness. It allows you to manage your accounts, pay bills, and transfer funds conveniently from any location. The app includes a budgeting tool that helps you monitor your expenses and control spending, making it a comprehensive tool for financial management on the go.
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Axos Bank prioritizes its customers by delivering top-tier direct banking services, with the added security of Federal Deposit Insurance Corporation (FDIC) coverage to safeguard financial transactions. For small businesses interested in investment opportunities, Axos Bank extends these services through its subsidiary, Axos Invest.
The bank offers a comprehensive range of services including business banking, digital banking, and personal banking. These services encompass business checking accounts, savings accounts, and mobile pay deposits, ensuring a well-rounded banking experience. With Axos Bank, your small business is well-positioned to thrive.
Why we chose it: Axos Bank’s Basic Business Checking account stands out due to its free cash deposits and low fee structure, making it one of the most helpful business bank accounts available.
Pros
Cons
Axos Bank’s Basic Business Checking account doesn’t require a monthly maintenance fee or have specific requirements for keeping your account open. Any ATM fees you incur are reimbursed each month, essentially making the account free to use. However, if you expect to conduct many wire transfers, it’s important to note that Axos charges $35 for each wire transfer.
This specific account doesn’t offer an Annual Percentage Yield (APY), focusing instead on providing business-related perks. For those with surplus funds looking to earn interest, Axos offers interest-bearing business savings accounts where you can deposit your extra money and accrue interest.
Axos Bank offers checking and savings accounts without minimum balance requirements. As a small business owner, you won’t need to maintain a specific balance to avoid monthly fees. This feature makes Axos an appealing choice, especially if you’re starting with a smaller amount of funds or prefer to avoid tying up significant capital in your account to avoid fees.
Axos Bank provides a comprehensive mobile banking app that enables customers to handle a wide range of banking activities directly from their mobile devices. Through the app, you can manage your accounts, deposit checks, transfer funds, pay bills, and initiate wire transfers.
The app includes useful features such as account alerts and budgeting tools, helping you maintain vigilant oversight of your finances and manage your money effectively.
Oxygen has carved a niche in the FinTech industry by delivering an exceptional banking experience and service. It’s an ideal choice for those aiming to reduce their banking costs, offering no-fee banking with no monthly maintenance or overdraft fees.
Their mobile banking platform allows you to manage your account seamlessly 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: Oxygen resonates well with modern business owners, providing innovative banking features that align with contemporary needs. It’s especially well-suited for sole proprietors, making it one of the best checking account options for individuals running their own businesses.
Pros
Cons
Oxygen promotes itself as a fee-free banking option, although it notes that withdrawals outside of its network and international transactions may incur fees. However, you won’t have to worry about charges for ACH transfers or maintaining your account, as these services are provided with no fees.
While funds in your Oxygen business checking account don’t earn interest, Oxygen offers a solution by providing a business savings account option. Money in this account accrues interest at a rate of 1.0% for balances up to $20,000. For amounts over $20,000, the interest continues to accrue at a reduced rate, allowing you to still earn on your savings, albeit at a lower yield.
Oxygen Bank offers checking and savings accounts with no minimum balance requirements. This means you won’t face monthly fees, even if your account balance drops to zero. You don’t have to worry about incurring charges for not maintaining a specific account balance, providing greater financial flexibility and peace of mind.
Oxygen Bank provides a mobile banking app tailored to the needs of small business owners, allowing for efficient financial management on the go. Through the app, you can deposit checks, pay bills, and generate account statements.
The app includes features that offer spending insights, helping you monitor and track your financial activities effectively. This can be useful for staying on top of business expenditures and budgeting more accurately.
Chase Bank is renowned for providing some of the best loans and credit lines tailored to small businesses, offering a broad spectrum of financial products and services. For businesses in search of flexible loans with easy repayment options, Chase is an excellent choice.
Additionally, Chase features advanced and user-friendly online and mobile banking platforms that allow you to manage your accounts, pay bills, and transfer funds seamlessly from anywhere.
Chase also prioritizes the security of your financial transactions. With multi-factor authentication, continuous fraud monitoring, and robust encryption, they ensure that your business’s financial data is protected.
Why we chose it: Chase Bank stands out by complementing traditional banking with a comprehensive suite of merchant services designed to support the varied needs of your business and contribute to its success.
Pros
Cons
Monthly fees for Chase Business Complete Banking start at $15. However, you can avoid this fee by maintaining a daily balance of $2,000, making deposits through Chase QuickAccept, or making purchases with a Chase Ink Business Card. Be aware that there are charges for transactions beyond the initial 20 allowed per month, and it’s advisable to minimize wire transfers due to their high costs.
Like many banks, Chase doesn’t offer interest on balances held in business checking accounts. If you’re looking to earn interest on your business funds, you would need to open a business savings account with Chase, which can accrue interest at a rate of up to 0.02%. This setup allows you to potentially grow your funds through interest accumulation, albeit at a relatively low rate.
To avoid Chase’s monthly service fee for your checking account, maintain a minimum balance of $2,000 at all times. Falling below this amount even once during the month will cause the fee to be charged.
For savings accounts, Chase doesn’t charge a monthly fee as long as you maintain an active checking account with them. This arrangement can help streamline your banking needs and reduce costs.
Beyond traditional banking services, the Chase mobile app offers several useful features to enhance your banking experience. If you misplace your credit card, you can easily lock or unlock it directly through the app. The app also includes a budget planning tool that allows you to set aside funds for large purchases, helping you manage your finances effectively.
Chase provides credit monitoring tools within the app to help you maintain and protect your credit health. These features make managing your financial life more convenient and secure.
To identify the best banks for small businesses in California, we considered several critical factors that impact account opening and management. Our comprehensive analysis aimed to ensure the accuracy of our findings.
These criteria guided our selection of banks that aren’t only accommodating to the financial needs of small businesses but also supportive of their growth and operational efficiency.
>> Open a Business Bank Account With the Bluevine >>
Do you have additional questions about setting up a bank account for your California business? Check out this FAQ section for answers to your inquiries:
To open a business bank account in California, you typically need to provide business documentation, personal identification for all owners or authorized signers, and a minimum deposit. Some banks might request extra documentation, such as proof of address or a business plan, depending on their specific requirements.
Yes, opening a bank account with an Employer Identification Number (EIN) is advisable. An EIN is necessary for tax purposes for any business with at least one employee, and banks will use this number when setting up your account. If you’re the sole employee of your business, you could use your Social Security Number (SSN).
However, using an EIN instead of your SSN helps maintain a clear distinction between your personal and business finances, which is crucial for financial clarity and legal purposes.
Actually, in most cases, you can open a business bank account in California with an Employer Identification Number (EIN). Banks typically require an EIN to open a business account. If you still need an EIN, you can easily apply for one through the IRS website. This step is essential for separating your personal and business finances and is required for most business banking transactions.
It’s prudent to save at least six months’ worth of operating expenses as a financial cushion in case you encounter any challenges with your business operations. This reserve allows you to sustain your business during downturns or unexpected situations.
Consider adding at least 10% of your monthly profits to this savings fund to increase it, enhancing your financial security over time gradually.
Opening a business bank account is a wise decision for small business owners in California. It aids in managing your finances more effectively, establishing strong customer relationships, and facilitating smooth transactions. Bluevine topped our list in this review, but each bank we evaluated also offers valuable benefits that could suit your needs.
When choosing a bank, always consider the ease of banking, the range of products offered, and the quality of services provided. If these factors align with your financial goals, you’re on the right path to choosing a bank that supports the growth and stability of your business.
