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Common features of the best business bank accounts for LLCs

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Nearly every business owner will need a bank account. It doesn't matter if you're a small business, a startup, or a blossoming LLC. But, for LLCs, a business bank account is especially important because LLCs can have any number of structures, including multiple people and an increased need for flexible finances. But, the flexible nature of LLCs also makes their banking needs difficult to nail down. An LLC's needs are generally different from those of a one-person show. But, rest assured the best business bank accounts for LLCs are easy to spot — once you know what to look for.

To help you in your search, we've created this guide to walk you through what a business bank account is and what makes for the best business bank accounts for LLCs. Let's get started.

What's a business bank account?

At a glimpse, a business account functions largely like a personal account. You can make cash deposits, write checks, save money, and open a credit card or debit card. But, a business account also serves an important purpose unique to businesses: It separates your personal finances and business finances.

Separation of personal and business finances is one of the first things a business should do. This prevents business owners from commingling their funds. Commingling funds can result in poor spending, messy taxes, and a nightmare for your accountant. It can also cause your LLC to lose liability protections in many cases. In short, your personal funds should be separate from your business funds. A business bank account makes that possible.

So, even if you have a personal checking account, you should open a business account ASAP. Now, let's take a look at what makes the best business bank account for LLCs.

What makes the best business bank account for an LLC?

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There are more U.S. banks than one can count, so rather than list them out and break them down, we're going to examine what features you should look for. Also, be sure to take note of what it is you absolutely have to have in a bank account. LLCs are flexible by nature, so what's important for one LLC won't necessarily be important for another's business banking needs.

Multiple debit cards

LLCs are generally formed by multiple people, making multiple debit cards an important thing to have. This will give you and your co-founders the ability to travel and keep tabs on your business spending without having to pass around a card.

Even if you're a single-member LLC or sole proprietor, you may hire employees at some point. Multiple cards will make it easy for your employees to make debit card purchases when sent on supply runs or business trips.

Business credit card with perks

Your business will likely need a credit card, as this can help you maintain a healthy cash flow by allowing your spending to be spread out over a payment period. The best business checking account will offer a credit card with low interest rates and rewards. Rewards are often cashback, which allows you to get money back after spending a certain amount. Many credit cards offered by local credit unions may even feature discounted hotel rates, specials for restaurants, and even reduced car rental rates.

If you can find a credit card with longer payment terms, it will give you longer periods to pay off your card between statement cycles. For example, if you have a payment period of 60 days and spend $1,000, you'll have 60 days to catch up on your card before interest accrues.

Few or no monthly fees

Bank accounts often have fees, even if they're labeled something like "free business checking account." Check the fine print and look for an account with as few of the following as possible:

  • Monthly service fee or monthly maintenance fee
  • ATM fees
  • Transaction fees
  • Bill pay fees

Many bank accounts will have some kind of fee, so don't completely rule out a promising account if there are a few small fees. But, too many fees can add up quickly and add on to your business expenses. Think about your business and how you plan on using your account. For example, if you don’t travel a lot, you may not need an account with free ATM access. This would free you up to look at accounts with ATM fees, but better interest rates or lower monthly fees, and so on.

Multiple account holders

If you're a multi-member LLC, you need a bank that makes it easy to have multiple account holders. This will allow you to monitor your account balance on the go, utilize multiple business debit cards or credit cards, and manage your online banking with multiple people. It's also a good idea to ensure the bank has a solid mobile banking option if you need multiple account holders, as the multiple account status will do you no good if the mobile experience is poor.

Business savings availability

If you're opening a small business checking account, consider opening a small business savings account as well. This will allow you to grow your money based on an APY rate. Best of all, many savings accounts cost nothing to operate. That being said, some banks will offer higher APY accounts that have a minimum balance requirement or minimum deposit requirement, otherwise they generally require a monthly fee. This makes these accounts difficult to obtain for businesses with little cash flow, or not as sensible if they can’t meet the minimum balance requirement and have to pay a fee.

Again, every feature on this list isn’t an absolute must. If you find an account or bank you’re partial to, don’t let a feature’s absence drive you away. Every LLC has different needs. If you feel an account is going to meet those needs, consult with any other members of your LLC or a financial consultant, and go for it.

Another option: Cash management account

If you want the ability to grow your funds but the functionality of a checking account, a cash management account could be a great fit. A cash management account is not a bank account, but allows you to go beyond a business checking account or business savings account, and gives you the functionality of both. Essentially, a cash management account is an umbrella account, offering you a single view of your finances with the ability to make transfers, write checks, use a credit card, and grow your money in a high-yield account.

A cash management account is different from a money market account. While both allow interest-based growth, a cash management account allows money to be moved freely without daily limits.

If you're interested in a cash management account, Brex Cash offers a versatile account protected by the Securities Investor Protection Corporation (SIPC) with no monthly fees. Partnered with a Brex Card, you can grow your funds while earning great rewards.

The best business bank account for your LLC

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No single bank account will ever be the right fit for every LLC. But, with enough research, you can find the best business bank account for your LLC. Think about how you'll be using your business account, and consult any other members of your LLC or speak to a financial advisor. Then, start hunting.

If you wind up with an account you're not happy with, remember: A bank account is not a permanent commitment. You can continue your search and find another bank. We're fortunate enough to live in the age of online banking, which has given us countless options. One of them will be just right for you.

Brex Cash is offered by Brex Treasury LLC, a registered broker-dealer and member FINRA and SIPC. Brex Cash is a program that allows you to elect to automatically place your cash balances into certain money market mutual funds. Brex Treasury LLC is not a bank, your Brex Cash account is not a bank account, and it may not offer all of the services and protections that banks may offer. The cash you deposit into your Brex Cash account will not be stored at a bank.

You could lose money by investing in a money market mutual fund. Although the fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund and you should not expect that the sponsor will provide financial support to the fund at any time.

Brex Treasury LLC is not an investment adviser, and therefore investors should consider the investment objectives, risks, and charges and expenses carefully before investing. See program disclosures and the applicable fund prospectus for details and other information. Contact us for a copy of the fund prospectus and recent performance data. You should read the prospectus carefully before investing.

Brex Treasury LLC does not charge transaction or account fees. However, money market funds bear expenses and fees. Fees are subject to change. Yield is variable and may fluctuate as market conditions change.

Brex Treasury is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org. Securities in your account are protected up to $500,000. For details, please see www.sipc.org.

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