Best Business Bank Accounts in Canada for 2024
Oct 3, 2024The right business bank account will keep your operation well-oiled while reducing overhead costs.
A business bank account is designed to help businesses manage their day-to-day finances, including cash flow and savings. Based on the type of business, companies may be required to have a business bank account.
We reviewed over 100 business bank accounts so you can choose from our list of top ranking chequing accounts and packages by size, transaction volume and nature of the business. Ultimately, the best business bank account is the one that will help you operate your business most efficiently.
Best bank accounts for small/medium businesses
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Product detailsBest business bank accounts for high-volume transactions
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Product detailsBest U.S. dollar accounts for businesses
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Product detailsGuide to business bank accounts in Canada
What is a business bank account?
A business bank account allows business owners and authorized individuals, called ‘signatories,' to manage the finances under their company’s name. They may use this account to pay bills, receive and make deposits, transfers and for other business-related transactions.
Many Canadian financial institutions, including the Big Six banks and credit unions, offer business banking options for companies of various sizes. You can choose no-fee accounts with few perks or full business banking packages, digital-only or in-branch options, and specialty industry accounts or plans that best suit your business or organization.
Do you need a business chequing account?
While opening a business chequing account is required for corporations, it may not be necessary for every business. For example, if you’re self-employed or have a sole proprietorship and operate your business under your own name, you may use your personal bank account.
However, having a chequing account for business that is separate from your personal bank account can be beneficial in numerous ways, including:
1. Streamlining your taxes: Separating your business income and expenses from your personal transactions helps you keep records and cash flow organized ahead of tax season.
2. Building transaction history: By maintaining your business chequing account, your business is able to show financial responsibility and build a transaction history that is separate from your personal banking activity. Banks check the business transaction history at the time reviewing your business credit card, loan or line of credit application.
3. Features supporting business goals: Business bank accounts often come with valuable features not offered to personal account holders. These features include higher overdraft limits to cover unexpected cash deficits, the scope to add multiple signatories, and the ability to accept unlimited credit or debit card deposits from customers.
Types of business bank accounts
Financial institutions have various kinds of business bank accounts to support different organizational needs. Some banks and credit unions also have a range of plans to suit businesses of all sizes. These offerings typically fall into four categories:
Business chequing accounts are built to streamline day-to-day banking, including your debits, electronic and cheque deposits, e-transfers and Moneris transactions. Explore the top business chequing account options above to make an informed decision.
Business savings accounts are commonly a place to park excess cash flow and earn an interest while still being able to access the funds. Some savings accounts examples include the Tangerine Business Savings account and Manulife Business Advantage.
U.S. dollar and foreign currency accounts are designed for businesses with international transactions. These accounts may be used for savings or making and accepting payments in another currency — such as U.S. dollars, while avoiding foreign exchange fees. Apart from our U.S. dollar account selections, savings account examples include the Tangerine Business US Dollar Savings Account and Manulife US$ Business Advantage Account.
Specialized bank accounts cater to specific types of businesses in various industries, such as those in the non-profit sector or agricultural businesses. In some cases, these specialized accounts come at a lower monthly fee than regular business chequing accounts.
Key considerations when choosing a business chequing account
Selecting the best business chequing account comes down to a number of factors that are unique to the needs of your business. These may include:
Type and size of business: Factors like the number of employees you have or the type of business you run will guide the account features you’ll need, which should inform your choice of account.
Transaction volume: Consider your daily, weekly and monthly transaction volume and needs. Think about how regularly you’ll be depositing and withdrawing funds or e-transferring money — and choose an account package that is a good match with your usage.
Fees and charges: Before signing up for an account, be aware of the bank fees or charges, including monthly account fees, one-time transaction fees or overdraft charges. Depending on the bank and account features, fees for business chequing accounts can range from no monthly fee to more substantial monthly charges for an unlimited banking package.
Banking convenience: Be honest about your banking style — do you need an ATM or in-branch network for transactions? What about your customer service needs? Or are web banking solutions a better match for your business?
Promotions and rebates: Weigh the qualifying criteria to determine the overall value of any introductory offers or rebates on business banking packages. Promotions may include cash offers and credit card or international transfer service fee rebates.
What are the other business services and perks to consider?
While a business chequing account might be the best fit for your needs now, before opening an account, it may be worth seeing if your financial institution offers other features that might be useful to your business in the future. These may include:
Merchant services: If you anticipate needing point-of-sale or ecommerce services, some banks offer payment processing solutions that integrate with your business bank account.
Payroll processing: Check if your financial institution offers access to payroll solutions that can work with your business bank account. As your company grows, adding this service to your package may make it convenient to set up direct deposits to pay your staff.
Business credit cards: Many financial institutions offer business credit cards as part of a business banking package. These may come with benefits and perks such as bonus points or fee rebates that can bring down operational costs.
Lines of credit and loans: In some cases, banks and credit unions offer businesses the opportunity to connect lines of credit or loan facilities to a business account, which can be especially useful to cover unexpected expenses, extend cash flow, and support growth.
How to open a business bank account in Canada
Opening a business bank account can be done online or over the phone, but may also require a visit in-branch to verify your identity. Start by:
Researching and comparing accounts: Explore different business chequing accounts to find the one that has the best features for your business.
Gathering necessary documents: In addition to a piece of government identification for each signatory, your bank will require different documentation to open an account, depending on your business structure. It's best to contact your financial institution for a list of required documents before applying.
Applying online or in-branch: Depending on your company size, the financial institution or type of account, you may be able to apply for a business bank account online. In some cases, you may have to call a representative or visit a branch to complete the application process.
Funding the account: Once your account is set up, it’s time to deposit or transfer funds — this is especially important if you have a minimum balance requirement or have your monthly fee waived when you maintain a certain monthly balance.
Alternatives to business bank accounts
A few alternatives in the fintech space may offer similar or complementary features to traditional business bank accounts offered by financial institutions. These online platforms can be especially worthwhile for tech-savvy freelancers, sole proprietors and partnerships, as well as small business owners.
If you’re looking for payment management services, cross-border payment capabilities or international transaction plans starting at a lower pricing range, you can explore these options:
Alternative service | Pros | Cons |
|---|---|---|
No monthly fee. Multi-currency digital account. Multi-currency debit card for online and in-store purchases. | No cash deposits. Fees for receiving funds in some cases. No credit, overdraft or loan products available. | |
No monthly fee with basic plan. Multi-currency accounts/corporate credit cards. Integrated with accounting systems. | Currency conversion fees for some international transfers. Monthly fee for plans above basic level. | |
Free account options. Multi-currency accounts. Integrated with accounting systems. | Only available for corporations. Monthly fee for plans above basic level. | |
No monthly fees. Integrated with accounting systems. Facilitates cross-border payments. | Currency conversion fees. Transfer fees. |
Frequently asked questions
What’s the difference between a business and personal bank account?
What’s the difference between a business and personal bank account?
Business and personal bank accounts might seem similar on the surface — but business accounts offer a number of specific features that may be useful to entrepreneurs and companies. These features may include higher overdraft limits, the scope to add multiple signatories to the account, the ability to receive debit and credit card payments and add functional services, such as payroll processing.
Which is the best business chequing account?
Which is the best business chequing account?
The best business chequing account for you is likely one that offers the features that are most valuable to your business. For example, if you only do business online in U.S. dollar funds and want to lower foreign exchange costs or monthly fee, you may explore online U.S. dollar account options that fulfil those expectations.
Use our list above to compare the top business bank accounts in Canada.
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