Most of us have a personal chequing account, which we use to move money in and out when we deposit our paycheques and to withdraw funds to spend rather than to save. But what exactly is a business chequing account, and why would you need one?
If you’re an entrepreneur with your own business, you may want to consider having a business chequing account rather than mixing your company’s financials with your personal funds. But with a variety of chequing accounts available for businesses, how do you choose just one?
To help with that decision, we’ve compiled a list of the top business chequing accounts for Canadian businesses.
What Is A Business Chequing Account?
A business chequing account is used much like a personal chequing account, except it’s dedicated to the financial transactions associated with your business. You can use it to pay bills, pay vendors, receive payments from customers, write cheques, withdraw cash, and keep tabs on cash flow, among other things.
The money you deposit into your chequing account is insured by the CDIC, much like funds from a personal chequing account would be. These accounts usually don’t pay out any interest as savings accounts do, and instead are meant for frequent transactions rather than parking your money to save.
Many banks in Canada offer business chequing accounts. When deciding which account to open, be sure to compare different accounts to determine which one works best for you.
Overview Of Best Business Chequing Accounts
|Monthly Fee||Minimum Balance Required to Waive Monthly Fee||Monthly Deposit Limits||Monthly Transaction Limits|
|BMO eBusiness Plan||$0||$0||Unlimited||Unlimited|
|TD Unlimited Business Plan||$125||$65,000||Unlimited||Unlimited|
|CIBC Advanced Business Operating Account||$35||$35,000||$5,000 in cash $500 in coin50 cheques||100|
|RBC All Inclusive Account||$100||$75,000||Unlimited||Unlimited|
|Scotiabank Basic Business account||$10.95||$8,000||Not specified||1 free transaction per $1,500 in the account|
BMO eBusiness Plan
The BMO eBusiness Plan account can help you manage your business’s finances without having to deal with sky-high fees and restricted limits on electronic transactions. Plus, there’s no monthly fee, no minimum balance requirement, and 2 free Interac e-transfers per day.
With the BMO eBusiness Plan, you can accept online payments, view monthly e-statements, manage your payroll, deposit cheques, and withdraw cash from ATMs.
- Monthly fee: $0
- Minimum balance requirement: $0
- Monthly transaction limit: Unlimited
- Interac e-transfers: 2/day, $3,000 limit per transfer
- Other perks: Unlimited Moneris transactions
TD Unlimited Business Plan
With the TD Unlimited Business Plan, you can take advantage of unlimited transactions and additional banking benefits, such as a rebate on the annual fee associated with some of TD’s Visa credit cards. The TD Unlimited Business Plan is just one of 5 business chequing accounts offered by TD, but this is the only one of the 5 that comes with unlimited monthly transactions and items.
- Monthly fee: $125
- Minimum deposit requirement: $65,000
- Monthly transaction limit: Unlimited
- Deposit limits: Unlimited
- Interac e-transfers: Free
- Other perks: Fee rebate with minimum monthly balance; $149 rebate of the annual fee for the TD Aeroplan Visa Business Card or TD Business Travel Visa Card
CIBC Advanced Business Operating Account
CIBC offers 4 different chequing accounts for businesses, including its CIBC Advanced Business Operating Account. You can send and request money with up to 100 Interac e-transfer transactions per month at no extra charge.
There’s also no charge to have e-statements delivered through online banking or SmartBanking for Business. Opening a business chequing account is easy and can be done entirely online without having to make a trip to the bank. You can be up and running in as little as half an hour.
- Monthly fee: $35
- Minimum deposit requirement: $35,000
- Monthly transaction limit: 100
- Deposit limits: Up to $5,000 cash, $500 coin, and 50 cheques per month
- Interac e-transfers: Included in the monthly transaction limit
- Other perks: No charge for delivery of e-statements through online banking or SmartBanking for Business
RBC All Inclusive Account
RBC has 3 business chequing accounts to offer, and each comes with unlimited Moneris deposits. If your business regularly sees mid to high transaction volumes and you’re looking for something that will cover all these transactions with no limits, then the RBC All-Inclusive Account may be worth looking further into. It offers plenty of flexibility to bank both in-person and virtually.
- Monthly fee: $100
- Minimum deposit requirement: $75,000
- Monthly transaction limit: Unlimited
- Deposit limits: Unlimited
- Interac e-transfers: Unlimited
- Other perks: Unlimited Moneris deposits
Scotiabank Basic Business Account
Scotiabank offers 3 business chequing account solutions, including the Basic Business Account that provides entrepreneurs with a streamlined way to manage incoming and outgoing funds in both Canadian and US dollars. The Scotiabank Basic Business Account comes with a minimal monthly fee of just $10.95, which can be waived if $8,000 is deposited in the account at any time.
- Monthly fee: $10.95
- Minimum deposit requirement: $8,000
- Monthly transaction limit: 1 free transaction per $1,500 in the account
- Deposit limits: Not specified
- Interac e-transfers: $1 – $1.50 each
- Other perks: Get access to cash the next day with Chase Merchant Services
Main Features To Consider When Opening a Business Chequing Account
When looking at different business chequing account options, there are a few key features to consider, including the following:
The vast majority of business accounts charge monthly fees, though they can typically be waived if minimum deposit or transaction requirements are met.
If your business conducts many transactions per month, you may want to look for a business chequing account that offers unlimited monthly transactions. At the very least, look for an account that charges a small fee per transaction, or offers a certain amount for free before charging per transaction.
Some online-only banks offer business chequing accounts but keep in mind that there are no brick-and-mortar branches to visit. If you prefer to have a physical branch to visit, consider a traditional bank. Otherwise, you may find the convenience of online-only banking sufficient for you, especially if you conduct the majority of your work online.
To entice you to open a chequing account, some banks may offer bonuses, such as rebates on annual fees for business credit cards.
Requirements To Open A Business Chequing Account
To open a business chequing account, you’ll need to provide certain pieces of information:
Business Registration Documents
The bank will want to see evidence that you have a legitimate business and that you are opening a business account to conduct financial transactions associated with your company. Your business registration papers should be enough proof for the bank.
To prove your identity, you’ll need to provide a piece of identification with your photo on it, such as a driver’s license or passport. The name on the ID should ideally match the name as it appears on your business registration documents.
Proof Of Canadian Residence
One of the requirements to open a bank account in Canada is to be a Canadian resident or citizen. As such, you will need to provide some proof of your residency.
Information On Account Users
If other people will be granted access to the account, the bank will also need their personal information.
Benefits Of Opening a Business Chequing Account
You probably already have a personal chequing account, so why would you want to open a business account? Here are a few perks to having an official business chequing account:
Separate Your Personal And Business Finances
It would be much more difficult to keep tabs on your business’s revenue and expenses if the funds are mixed with your personal funds. You could also place your personal assets at risk if your business is ever the subject of a lawsuit. Further, having your business and personal deposits separated makes filing your taxes a lot easier.
More Credibility With Clients
Having an official business chequing account will allow you and your business to appear more professional. It would seem rather sketchy if your cheques had your personal name and address on them instead of your business’s name, for example.
Features Specifically For Business Owners
Business chequing accounts come with certain traits that you won’t find with personal accounts. These features make running the financial side of your business easier. For instance, you may have access to a line of credit and payroll integrations that you wouldn’t get with a conventional bank account.
Allows Others To Access And Manage The Account
A business chequing account will allow you to add multiple users so that business partners and employees can get access to the account as required. You can also customize how much access and authorization each person has according to your needs.
What About A Business Savings Account?
While a business chequing account will be used predominantly to move money frequently, a savings account is designed specifically to park your money and allow it to grow with every deposit made, along with interest collected. You may consider a business savings account to provide you with a secure spot to hold liquid assets and save for costly expenses and purchases or a rainy day.
Should You Add A Business Credit Card?
If you are planning to open a business chequing account, you may also want to consider opening a business credit card at the same time, if you don’t already have one. For the same reasons why your business should have its own chequing account, it should have its own credit card, too.
Business credit cards are linked to bank accounts that are used specifically for business expenses. Not only can they help you track your cash flow, but many also come with rewards that you can accumulate with every purchase you make. Plus, every timely payment made is good for your business credit score.
If you run a business, you should have a business chequing account to accommodate your company’s incoming revenues and outgoing expenses. Assess the monthly fees, minimum deposit requirements, and transaction limits prior to opening an account to make sure it closely matches your needs. By having a business chequing account in place, you can keep tabs on your business’s finances and streamline your taxes.