Online banking can be an incredibly helpful resource for small business owners. 💰 High-interest rates, mobile apps, secure cash transfers, low fees, and other features make online banking a much more convenient alternative to traditional banking. 💻
I, myself, made the switch to online banking several years ago and haven’t looked back. 😌
But not all online banks are created equal. To get the best rates and features, it’s essential to research and compare different options to find the best online bank for your small business.
So, how can you find the best online banking option for you? 🤔
Fortunately, I’ve already done some of the research to help you get started. Below are five of what I’ve found to be the best online banking options for small businesses.
🏦 If you’re ready to ditch your traditional bank account, keep reading to see how your business can benefit from making the switch from conventional to online banking.
What’s the Difference Between Online Banking & Traditional Banking?
On the surface, it might seem like traditional and online banks are more or less the same, with the apparent exception of accessing one through the internet.
However, online banks offer several additional useful features that you might not be able to find at a regular bank.
Traditional banks, for example, generally have much higher fees than online banks. Whereas a traditional bank might have overdraft fees and minimum balance requirements, online banks are often wholly fee-free.
Additionally, the ability to manage your bank account and debit cards online and through mobile apps is incredibly convenient and helps protect against theft.
For instance, I recently lost my debit card. 😅 As you might expect, I was concerned that someone might have found or stolen it. Fortunately, though, I was able to quickly open up my banking app and freeze my debit card while I waited for another one to be delivered.
You’ll also be able to transfer money more quickly, monitor account activity, get high-interest rates, and get exceptional customer service with an online bank.
The only thing you’re likely to miss when you switch to an online bank is the ability to quickly deposit cash as most online banks don’t have any physical locations. However, you will still be able to deposit checks online, and you may be able to deposit cash via other methods, if necessary.
Ultimately, online banks offer many of the same features as traditional banks, as well as a variety of other additional benefits. But…
Are Online Banks Safe and Trustworthy?
Short answer: Yes, online banks are just as safe and trustworthy as traditional banks.
While some people may be skeptical regarding the security of online banks, rest assured that they are held to the same standard as traditional banks.
Just make sure that the account you decide to open is FDIC-insured (all the banks recommended below are), and your money will be just as safe as it would be in any other bank.
Which banks have the best online security?
Rest assured, all online banks have top-of-the-line online security. Some of the measures banks use to maintain your money and information safe are:
- Anti-virus and anti-malware protection
- Firewalls (these help keep unsafe and unauthorized people out of your account)
- SSL encryption (this is a cryptographic protocol to keep communications secure)
- Cookies (they help the bank’s website recognize the computer you regularly use to log in)
- Multi-factor authentication
- Biometric authentication (this allows you to log into your account using your fingerprint or through a facial recognition software)
Online banks also offer the same, if not better, security features as traditional banks, including:
- fraud detection and prevention
- card management
- secure encryption
- and more
The 5 Best Online Banking Options
If you need help choosing the best online banking option for your small business, I’ve got you covered.
Below are my picks for five of the best online banks available today due to their competitive interest rates, great online banking features, customer service, and more.
Ally is one of the most popular and best online banking options available thanks to its competitive high-yield savings accounts, interest checking accounts, great mobile app, and exceptional customer service.
Ally offers a wide range of products, brokerage services, and features to make it perfect for small business owners.
Products: Interest Checking, High-Yield Savings, CDs, IRA Online Savings, Money Market
Rates: 0.50% on savings, 0.10 to 0.25% on checking
Fees: $25 overdraft fee, $10 excessive transaction fee, $7.50 returned deposit item fee, $15 expedited delivery fee, $20 outgoing domestic wires fee, no monthly fee for savings ($10 monthly reimbursement for fees charged by ATMs)
2. TIAA Bank
TIAA Bank is a particularly good option if you plan to have a checking account with a high balance.
This Florida-based bank offers a small business checking account with a current interest rate of 1.21%. You’ll have a tough time finding a checking account with a better interest rate.
Products: Checking, CDs, Money Market
Rates: 0.12% on Small Business Checking, 0.05% on Business Money Market, 0.50 to 0.10% on Business CDs
Fees: No monthly fees
3. Capital One
You’re probably familiar with Capital One as a credit card company, but did you know it also offers some of the best online banking products currently available?
In addition to offering a variety of products, a great online banking experience, and other features, Capital One is one of the few online banks that do have physical locations, which can be very helpful in a pinch.
Products: Checking, Savings, Merchant Services, Escrow Express
Rates: 0.20% on savings, 0.20% to 0.75% on checking
Fees: No monthly fees on savings, $15 monthly service fee on checking
4. Discover Bank
Like Capital One, you might only know Discover Bank as a credit card company, but its online checking and savings accounts are great for small business owners.
Discover is unique in that it offers 1% cashback on up to $3,000 in monthly debit card purchases. Additionally, excellent customer service, a fantastic mobile app, and premier security features make Discover a leading online bank.
Products: Checking, Savings, Money Market, CDs, IRA CDs
Rates: 0.50% on savings, 0.35% to 0.40% on Money Market Accounts, 0.50% on CDs, 0.20% to 0.60% on IRA CDs
Fees: No monthly fees
5. CIT Bank
CIT Bank is a highly reputable online bank that offers great options for savings, CDs, and money market accounts.
Competitive rates, great online banking features, and no fees make CIT Bank a premier online banking option for small business owners.
Products: Savings, eChecking, Money Market, CDs
Rates: up to 0.45% on Savings Builder accounts, 0.10 to 0.25% on eChecking, 0.50% on Money Market
Fees: No monthly fees
How to Choose an Online Bank
There are a lot of online banks available, so it’s essential to be thorough before choosing one.
To find the best online banking option for your small business, be sure to consider these tips:
First and foremost, make sure your online bank account is FDIC-insured. The Federal Deposit Insurance Corporation is an agency that ensures your assets in case the bank fails. If your account is FDIC-insured, your money is protected up to $250,000.
FDIC insurance is standard at traditional banks, so be sure to check that your online bank offers it as well.
Review the App 📱
Online banks only exist online, so they must offer great web and mobile banking experiences.
If you’re like me, you’ll be doing most of your bank account management through the bank’s mobile app, so be sure to read reviews and ensure that your online bank’s app offers the features you need.
Be sure to look for helpful features, such as:
- Mobile check deposits
- Mobile bank transfers
- Card management features
- Budgeting tools
- Mobile customer service portal
These features are standard nowadays, so be sure your online bank offers them.
Interest Rates 🔣
Many traditional checking and savings accounts don’t offer any interest, which means you’re essentially missing out on free money.
When you own a small business, every dollar counts. So, be sure to look for an online bank that offers high-interest checkings and, or savings accounts.
Ally is probably the most popular online bank that offers a high-yield savings account, but most online options will provide competitive rates.
By keeping your money in a high-yield online bank account, you can earn hundreds or even thousands of dollars in interest every year.
As I mentioned earlier, traditional banks often charge excessive fees that can add up over time.
My old savings account charged a $5 monthly maintenance fee, for example. While this might not seem so bad, there’s no point in paying these fees when there are other options available.
Make sure to find an online bank account that guarantees no fees so you can put more of your money back into your business.
ATM Reimbursement 🏧
Lastly, check to make sure your online bank offers ATM fee reimbursements.
Since online banks don’t have physical locations, they often don’t have any ATMs. Instead, many online banks offer to reimburse you for any fees you rack up from using out-of-network ATMs.
So, if your business uses cash often, make sure to choose an online bank that reimburses ATM fees.
Are You Ready to Have Your Bank Inside Your Smartphone?
Choosing the best online banking app is an important decision to make as a small business owner. High-interest rates, convenient online bank account management, quick customer service, and other features can make a huge difference.
It’s also important to reiterate that it’s crucial for you to have a bank account to be able to start creating a credit history.
As a small business owner, you have to make crucial decisions like this all the time. That’s why our blog and newsletter are part of our effort to live up to our motto, “No Business Left Behind.”