Small Business Banking: The Best Business Bank Accounts

Business Bank Accounts for Canadian Small Businesses

Small business loan application form
Small business loan application form. Image (c) teekid /Getty Images

For years, the only difference between business bank accounts and personal bank accounts has been that business bank accounts cost a lot more in fees.

But the Cyclopean eyes of Canada's big banks have finally alighted on small business banking and, having decided that small business owners are a worthy market, the banks are actually competing with one another to create business bank accounts that small business owners will find attractive - and that means creating small business bank accounts with lower bank fees.

Here are the best business bank accounts for Canadian small businesses based on their monthly costs. (Note that this article discusses Canadian dollar accounts only.)

Business Bank Accounts for Low-Volume Businesses

HSBC's Business Direct Account may be just the business bank account you're looking for if your Canadian small business doesn't have a high volume of banking transactions and you have Internet access.

As you see on the page linked above, the HSBC Business Direct Account features include:

  • Unlimited free Business Internet Banking, ATM and Business Telephone Banking, including free transfers, bill payments and electronic deposits and withdrawals
  • 20 free cheques deposited per month
  • Write up to 20 cheques free per month

There are charges, of course, for services above what the account offers, but still, a business bank account with chequing and no monthly fee is something a lot of us have been looking for a long time.

Compare Business Bank Accounts

The small business bank account I've found that comes closest to this HSBC Business Direct Account is the Bank of Montreal's Small Business Banking Plan, which can be free if you maintain the required monthly minimum balance of $4000. Otherwise, there's a $9.50 account maintenance fee.

You are allowed 15 monthly transactions and 20 monthly items on deposit; transactions over the limit cost $1.00 each.

The Royal Bank offers an RBC Business Essentials Fixed-Fee Account™. For a monthly business bank account fee of $20.00 you get:

  • Up to 20 debits/cheques each month
  • Up to 15 credits/deposits each month
  • Up to 20 items deposited each month
  • Up to $2,500 cash deposited each month.

Pay-As-You-Go Business Bank Accounts

If your small business doesn't do a lot of banking business each month, you don't regularly maintain enough of a bank balance to possibly get your business bank account's monthly fee waived, and you want to use the services of a bank teller now and again, the most inexpensive business bank account for you may well be an account where you pay by the transaction. Best bets for business bank accounts are:

RBC's Business Essentials Variable Pricing Account™, a pay-as-you-go account that charges $0.90 for each paper-based transaction, $0.60 for each electronic one, and up to $2.25 for each $1,000 deposited, although there is a $6.00 monthly minimum charge.

Online and telephone banking are included with the account.

Scotiabank's Basic Business Account is a chequing account which has an account maintenance fee of $9.00 a month. In addition, you're charged for all your transactions on a pay-per-use basis. Each cheque, for instance, costs $0.85, while each item deposited to your account costs $0.18.

CIBC's Basic Business Operating Account's maintenance fee is $8.00 a month, while each transaction cost $0.90.

On the next page, you’ll find information on what I think are the best business bank accounts for savings and other small business bank accounts with special features that you may want. Click to continue reading.

(Page one of this article on the best business bank accounts for small business banking discusses no-fee and pay-as-you-go small business bank accounts for Canadian small businesses.)

Other Business Bank Accounts

HSBC offers a BusinessVantage Account, an interest-paying chequing banking account package in CAD or USD for $22.50 a month with a suite of small business banking services such as access to Relationship Managers for personalized service, including Trade and Cash Management advice, activity charges waived on up to 40 transactions, and volume-based discounts beyond the monthly transaction allocation.

The Bank of Montreal's Value Assist Plan is very similar to the BusinessVantage Account. It, too, is a chequing banking account package with fees starting at $22.00, although the monthly fee will be waived if you maintain the proper minimum monthly balance ($8,000 in the case of the $22.00 a month business bank account). The $22.00 a month account includes 20 transactions per month.

The CIBC offers an Unlimited Business Operating Account which, as the name suggests, gives you unlimited transactions with a cash, coin and cheque deposit package for a $35.00 monthly fee. Looking at how few monthly transactions are included in most of the more inexpensive business bank accounts and how quickly additional transaction fees stack up, this may well be the most inexpensive option if your business has many monthly transactions.

Savings Business Bank Accounts

ING's Business Investment Savings Account is hard to match if you're looking for a small business banking savings account.

This business bank account has no monthly fees and no service charges with no minimum balance required, and as of the time of writing, is offering a 1% interest rate.

Scotiabank's Scotia Power Savings Account also offers a 1% interest rate at the time of writing. While it's not technically a business account, I don’t see why you couldn't use it as one.

However, you do have to maintain a minimum monthly balance of $5,000 to get this interest rate.

Compare Business Bank Accounts:

The HSBC's Commercial Savings Account, at the time of writing, offers 0.5% interest, and has no monthly fees but does demand a minimum monthly balance.

The Bank of Montreal's Business Premium Rate Savings Account offers 0.250% interest but does not demand a minimum monthly balance.

Small Business Banking Packages

Another thing that complicates the small business banking issue is that some banks offer small business banking packages that bundle banking services.

Scotiabank's "combo" small business banking packages are of particular interest; they offer several business bank accounts that combine a personal and business bank account with other banking services, such as their ScotiaOne Account Plan. Besides the personal chequing and business bank account, the plan includes a business Visa card, a ScotiaCard and electronic banking for business. Fees start at $49.00 per month.

See What Business Bank Accounts Your Credit Union Offers

I've only compared Canadian banks in this article and not mentioned Credit Unions at all until now simply because there are so many Credit Unions operating in different regions in the country. But I urge you to check with your local Credit Union to see what kinds of business bank accounts they offer. Historically, Credit Unions have had a strong interest in small business banking and your local Credit Union probably offers banking accounts and services that are very competitive.

Small Business Banking Isn't All About the Fees

The most important feature of small business banking is the relationship you have with your bank or credit union manager, not the cost of your small business bank account. That being said, however, there's no point in spending money every month on small business banking services you’re not using or conversely, paying relatively high small business bank account fees and not getting the small business banking services you need.

Checking your business bank account and comparing it with the information on business bank accounts above could help you find a small business bank account that's a better fit for your small business and save you money.

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