Best Bank for Small Business in California

Which Bank Is Best to Open a Small Business Account? Factors to Consider When Choosing the Best Bank

Before we dive into some of the best banks for small businesses in California, it’s important to go over a few factors you should consider before making your choice. In this section, we cover some of the factors that we looked at before compiling our list of banks. Furthermore, knowing our criteria can better assist you in the decision-making process.

Learn more about some of the most important factors to consider below.

Monthly Fees

Like personal accounts, many banks charge a monthly maintenance fee for business accounts. These fees are charged monthly and come right out of your business account. Typically, the fee is low and not something you’ll notice if you have a lot of cash flowing through the account.

Additionally, some banks will waive the fee if you have a specific amount in your account or flowing through your account.

While some banks charge a maintenance fee, other banks do not. Some banks will let you open and maintain a business account for free, so if you’re just starting, these banks work great for small businesses that are tight on cash.

That said, these banks may offer lower interest rates or less services. While the fee isn’t always fun to pay, it does give banks some more flexibility in California.

Interest Rates

Another factor you want to consider is the bank’s interest rate. While a low internet rate is good for a loan, a higher interest rate is better for storing your company’s capital.

As a small business, you need to make money whenever you can, so having a high-interest rate savings account, also known as a high-yield savings account, is a great way to make a few extra bucks.

Due to a spike in interest rates after the COVID-19 pandemic, many banks offer interest rates that are around 4-5%, but you may find some banks are willing to offer more. Take some time to look at the types of rates a bank can offer. Also, check to see if any CDs or other types of locked accounts can help you earn even more money.

Bonuses

Some banks will offer you a bonus when you open a small business account with them. These bonuses can be a few hundred or even a few thousand dollars, depending on a few factors.

One of the biggest factors that influences the size of a welcome bonus is the amount of money you plan on depositing. If you received funding for your small business and plan on depositing more than $100,000, it might be a good idea to work with a bank that offers you a sizable welcome bonus, even if some of their other features aren’t as good.

On the other hand, if you don’t have a lot of money to store in a bank, you’re better off looking for banks that don’t charge you a fee to open an account. Moreover, you’re better off with an account that has a lower maintenance fee as well.

Free Cash Deposits

Does your small business run on cash? Small businesses that frequently have cash flowing through them can face challenges when trying to find the right bank.

Unfortunately, many banks charge a fee to deposit large sums of cash, especially if you’re doing it multiple times per month. Furthermore, many banks in California have a limit on how much cash you can deposit before you start getting hit with fees.

If your small business takes in a lot of cash from customers, it’s a good idea to choose a bank that allows you to deposit a lot of cash for free.

Overdraft Fees

Overdraft fees are never fun, especially when you’re a small business owner. These are fees that occur when your account goes below zero, but the bank still approves the purchase and covers it for you. Unfortunately, the bank doesn’t do this for free and will usually charge you a $15 to $35 fee if you don’t cover the charge within 24 hours.

Additionally, some banks will continue to attach fees if you leave the account overdraft.

Depending on how often you’ll be low on cash, it’s a good idea to see what overdraft fees a bank has. Choosing a bank with low fees may be the best option to help you save money, but sometimes, you may need a bank to cover overdrafts to keep the lights on. For this reason, this is something you need to consider before choosing a bank.

The Best Banks for Small Business LLC in California

There’s a lot to consider when you’re thinking about your business’s bank – you may be wondering, “What’s the best bank to use for an LLC?” or “What’s the best interest rate?” Let’s face it: some banks are better than others, and this applies to banks for small businesses in California.

You may also notice that some banks are better for specific types of businesses in California. For example, one bank might be the best bank for LLCs in California, while another bank might be the best bank for sole proprietorships or freelancers.

The good news is that any of the banks we cover below can be a good choice, depending on your needs. Learn more about the eight best banks for small businesses in California below.

1. Best Overall Bank for Small Businesses in California: Chase for Small Business

Why We Like It: You can’t go wrong with one of the biggest banks in the world, and Chase has just shy of 1,000 locations in California. Chase also offers comprehensive services and can handle the needs of just about any small business.

Editor’s Rating: 4.5/5

Quick Facts:

• Interest Rates: N/A
• Monthly Fee: $15
• Free Cash Deposits: Up to $5,000
• Overdraft Fees: $34
• Bonuses: $300

Chase is a great bank for everyday banking but also for businesses. The bank has an entire division dedicated to business banking, which has helped them create some of the best business credit cards you can find. Some of them have low interest rates, plenty of points and cash back to earn, as well as low annual fees.

While Chase is a great bank for small businesses, it tends to be better for small businesses that have a lot of capital. Having a lot of capital is a great way to take advantage of their high bonuses and you have a few options when it comes to accounts.

For small businesses with less capital, the Chase Business Complete Banking account is the best option. It has the lowest fee and caters to small business owners.

It’s also worth noting that Chase will waive the monthly fee for veterans with proof of ID. Chase also has a welcome bonus that may vary based on the account; just make sure you meet the requirements to qualify.

Pros

• You don’t need a minimum opening deposit
• Unlimited electronic transactions without fees
• Credit processing
• The 24-hour grace period on overdrafts
• No fees at 16,000 Chase ATMs at about 4,700 locations

Cons

• There’s a $15 monthly fee
• $5,000 monthly limit on fee-free cash deposits and physical transactions

2. Best Banks for Small Business Loans in California: Live Oak Bank

Why We Like It: We love Live Oak Bank because they know how to help you save. They offer the best high-yield savings for small businesses in California, and they can help you find your small business.

Editor’s Rating: 4.5/5

Quick Facts:

• Interest Rates: 4%
• Monthly Fee: $10/month for checking
• Free Cash Deposits: Digitally-Focused; No Cash Deposits
• Overdraft Fees: N/A
• Bonuses: None

Live Oak Bank has a great business savings account. It’s one of the few accounts that offers around 4% interest on savings. In fact, there are no gimmicks or requirements, so you can start earning with just a penny in your account.

When it comes to small business loans, Live Oak Bank also has your back. They’re the leading lender for the Small Business Association (SBA) and offer loans that range from $10,000 to $500,000. Plus, they won’t hit your credit score when they check for your approval.

Another great feature that Live Oaks offers is a connection between online mobile bookkeeping platforms like QuickBooks. This makes it one of the more flexible options that you can use; plus, you don’t have to worry about paying any extra fees for that type of integration.

While like Live Oak Bank, that doesn’t mean it’s perfect. You’ll find that it has fewer features than many online mobile banking platforms, and you don’t have the physical support like many other banks. Furthermore, the main benefit comes down to saving, and many small businesses spend.

Pros

• Excellent for high-yield savings
• Business checking and savings accounts available, and low monthly limit to waive the fee
• Leading SBA lender
• Excellent integration with QuickBooks

Cons

• Mostly online services
• Limited features aside from loans and savings; the checking account is on the basic side

3. Best High-Yield Savings for Small Businesses in California: Capital One

Why We Like It: Capital One is one of our favorite choices because they make digital banking easier than some online-only banks. Enjoy no limits on digital transfers and not a lot of limitations on their online banking platforms.

Editor’s Rating: 4.5/5

Quick Facts:

• Interest Rates: Up to 4.1% for business savings
• Monthly Fee: $15
• Free Cash Deposits: Up to $5,000
• Overdraft Fees: $35 (sometimes none)
• Bonuses: None

Capital One is an up-and-comer in the banking industry. While they don’t have as many locations as Chase and some other large banks, they are just as competitive and small-business-friendly as the best of them.

A business account with Capital One allows you to reap the benefits of rewards, cash back on purchases, and travel points. Business accounts are highly customizable, and Capital One doesn’t have a lot of requirements or fees to open one.

Capital One also offers a great digital experience. With many businesses being online these days, it helps to have a bank that understands what it takes to be truly paperless.

There’s a handy mobile app, simple online banking, and you can transfer funds between accounts in seconds. You can also check your credit, apply for loans, and enjoy a high-yield savings account when you bank with Capital One.

While Capital One is a great bank for small businesses in California, it’s not perfect for everyone. If you’re someone who needs in-person banking, Capital One’s limited locations might not be ideal for you. Additionally, they don’t offer a bonus like Chase or some other more established banks.

Pros

• User-friendly mobile app and website that’s on par with online-only banks
• Excellent high-yield savings accounts and CDs
• Low monthly fees that can be waived

Cons

• Monthly account fee unless you maintain a $2,000 balance
• Large out-of-network ATM fees

4. Online Bank for Small Businesses in California: Bluevíne

Why We Like It: We love Bluevíne because it’s one of the best places to bank if you prefer the online experience for your small business. Plus, Bluevíne offers some of the best loan and interest rates for small businesses around.

Editor’s Rating: 4/5

Quick Facts:

• Interest Rates: 2%
• Monthly Fee: $0
• Free Cash Deposits: Digitally-Focused; No Cash Deposits
• Overdraft Fees: None
• Bonuses: None

Looking for an online bank for small businesses in California that you can trust? You can’t go wrong with Bluevíne. It’s one of the best online banks for small businesses, and it’s also one of the best banks for small business loans. This is because of their reasonable interest rates on loans and flexible financing.

Ultimately, Bluevíne does what it can to make banking online feel better than the traditional banking experience.

Bluevíne also makes it easy to repay and keep track of your loans. While you might encounter some fees, the payment structure is fair, and you can always work with them if you need more time. Furthermore, Bluevíne makes it easy to apply for and get a loan online.

When it comes to the interface, Bluevíne has one of the best mobile apps you can use. You can move money around, apply for credit lines, and much more, all online.

Pros

• All online, so no need to drive down to the bank
• No minimum deposit is required to open an account
• Partnered with other banks to give you access to more than 37,000 ATMs around the United States
• Multiple account options and upgrades to suit your small business

Cons

• A lot of additional fees if you do business in person or need to upload cash or use an ATM
• No business savings account

5. Best Credit Union for Small Businesses in California: Navy Federal Credit Union

Why We Like It: We love Navy Federal Credit Union because it’s one of the few financial institutions that cares about veteran-owned businesses. Veterans can turn to Navy Federal Credit Union for great interest rates, loans, and lines of credit for their small business needs.

Editor’s Rating: 5/5

Quick Facts:

• Interest rates: .01%
• Monthly Fee: $0
• Free Cash Deposits: First 30 Non-Electric Free; $0.25 Fee Each After That
• Overdraft Fees: $29
• Bonuses: None

Navy Federal Credit Union is one of the best credit union options for small businesses in California and across the United States. While it’s only available for veterans and their families, people who have served can enjoy respectable interest rates on savings, plenty of account options, and even special perks like payroll processing.

Insurance services are also offered by Navy Federal Credit Union, making it a one-stop shop for all of your financial small business needs.

That said, to qualify for any of Navy Federal Credit Union’s services, members of the business need to have served in the military or have family members who did. Unfortunately, this doesn’t make it the best bank for small businesses for non-veterans.

Pros

• Free business checking account that earns interest
• No dollar limits on cash deposits
• Fee-free access to more than 30,000 ATMs in the Navy Federal Credit Union network
• No annual fee on business credit accounts

Cons

• You do need more than $200 on the initial deposit to open the account
• Only available for veterans

6. Best Bonus for Small Businesses in California: US Bank

Why We Like It: US Bank recently ranked 2nd in a J.D. Power Small Business Banking Study. We also love that you can get a free business checking account.

Editor’s Rating: 4/5

Quick Facts:

• Interest Rates: N/A
• Monthly Fee: $0
• Free Cash Deposits: Up to $2,500 per Month
• Overdraft Fees: $36
• Bonuses: $800

US Bank is one of the greats when it comes to banking for small businesses. You can’t go wrong with this bank because if you meet the requirements you can get up to $800 deposited right into your new checking account.

Speaking of checking accounts, US Bank is one of the few banks with physical locations that allows you to open a business checking account for free. This means that you can spend $0, deposit $0, and leave $0 in the account without being charged.

US Bank also takes care of its customers. While there is an overdraft fee, it’s only applied to overdrafts that go over $50.

It’s also one of the leading lenders for the small business association, so they know how to make an impact and help smaller companies. Accounts are easy to set up and there are plenty of locations in California to help you start the process.

US Bank is a great choice, but that doesn’t mean it’s perfect. The biggest issue is that you only have 125 fee-free transactions per month, which can add up quickly once you get off the ground. You may also have to pay fees up to $1 to send money out of the country through ACH.

Pros

• No fees for the Silver Business Checking Account
• One of the biggest welcome bonus opportunities available
• No fees at about 4,700 ATMs, and plenty of branches and ATM locations in California

Cons

• Limits on cash deposits are lower than in some larger banks
• Hard to see all the terms and conditions online
• Fees for sending money outside the country

7. Best Free Cash Deposits for Small Businesses in California: Bank of America

Why We Like It: We’re fans of Bank of America because they’re one of the more balanced banks on this list. While they’re not always the best in a given category, they offer balanced packages for small businesses in California.

Editor’s Rating: 4/5

Quick Facts:

• Interest Rates: N/A
• Monthly Fee: $16
• Free Cash Deposits: Up to $7,500
• Overdraft Fees: $10
• Bonuses: $200

Bank of America is a great choice for anyone who needs a balanced approach to small business banking. There are some great deals that you’ll notice immediately, like the welcome bonus, so you feel valued immediately.

Fees are also low, and maintaining your account is a breeze with online banking options that let you move money around in seconds. You don’t have to worry about any hefty overdraft fees either because they only tend to cost about $10.

What makes Bank of America unique is how it handles cash deposits. While the lowest-tier checking account gets you up to $7,500 in free cash deposits, some of their checking options allow you to deposit up to $20,000 for free. This is much more than most banks, so for businesses that handle a lot of cash, Bank of America is usually the right choice.

While Bank of America is a great bank, it’s not for everyone. Sure, the welcome bonus is great, but their accounts don’t offer the high-yield savings that some other banks offer. Loans and lines of credit also aren’t Bank of America’s strong suit compared to bigger lenders like Chase.

Pros

• Some of the best options for fee-free cash deposits
• Free electronic transactions
• You can open an account in person, on a laptop, or even in the app
• Welcome bonuses tend to be available

Cons

• You need to deposit a minimum of $100 to open an account
• The fee for using an out-of-network ATM is higher than other banks
• No free checking account options

8. Best Local Bank for Small Businesses in California

Why We Like It: We love that California Bank and Trust (CB&T) is a local solution for small businesses in California. They understand the market well and we love that they help the community.

Editor’s Rating: 4/5

Quick Facts:

• Interest Rates: Up to 5% in a CD
• Monthly Fee: $15
• Free Cash Deposits: No Information
• Overdraft Fees: $30
• Bonuses: None

When you’re looking for a local bank, California Bank and Trust is hard to beat. The bank has been around for almost seven decades and continues to be a leader in banking solutions in California. You can open checking, savings, and even credit accounts with this bank, so you don’t have to worry about limiting yourself just because you went local.

Plus, there are more than 80 branches in the state, so for the most part, you shouldn’t have an issue finding a location if you need to meet with someone in person. However, you may have trouble finding one in less-populated areas.

We also love the way that customer support and the team handle interactions with their customers and the public. California Bank and Trust hosts events, donates to local charities, and works with small businesses in California to help them get off the ground.

Moving your money around between accounts and building your savings with a high-yield savings account are also options when you bank with CB&T.

CB&T isn’t for everyone, though. It’s a great choice for local small businesses, but for larger companies, CB&T may struggle to offer anything competitive.

Pros

• Local bank that understands the community and market well
• Plenty of banking options and account flexibility
• Online and in-person customer support
• Lending options are available

Cons

• More limited than some national banks
• You might have trouble finding branches in less populated areas
• Not the most competitive interest rates or checking and savings accounts

The Best Bank for Small Business in California FAQ

Have more questions about the best bank for small business in California? We have answers to the most common questions below.

Is It Better to Go with a Credit Union or Bank for a Small Business?

Banks and credit unions are great choices for your small business, but the best option for your situation depends on your needs. Banks tend to charge more in fees and offer lower interest rates, but they may have more credit card and loan options.

On the other hand, credit unions might not loan you as much, but they offer better interest rates on savings and loans as well as lower fees. For these reasons, you have to outweigh the costs and benefits of your specific business.

Which Bank Is Mostly Used in California?

The two most popular banks in California are Chase and Wells Fargo. Both banks have more than 1,000 locations in the state, which makes it easy to find help with your small business needs wherever you go.

If availability is what you’re looking for, you can’t go wrong with either of these banks. These banks are also the most common for personal and business use.

What Bank Is Best for LLC Non Residents in California?

We recommend choosing a bank that’s available in California and your home state, so don’t limit your choices to only California’s banks.

Having an account with a big bank like Chase, Wells Fargo, Capital One, or Bank of America has serious benefits. It puts you in a good place to have the flexibility you need to operate in your home state and California without having to open more accounts.

As for the best bank for LLC non-residents in California, our top pick is Wells Fargo. Not only will it work for people who are out of state, but Wells Fargo also makes it easy to open an account if you’re a non-U.S. citizen.

Is a Local Bank Better for Small Businesses?

Ultimately, whether or not a local bank is better comes down to your situation. Local banks and credit unions have a more intimate relationship with the area, so they have insights about the market that might affect loan amounts or interest rates.

Furthermore, some local banks and credit unions may participate in local programs that supply small businesses with funding. It all depends on your circumstances – you might have better luck with a large bank like Chase or Wells Fargo if you just want the best deals and the best all-around service.

Bank With the Best Bank for Small Business in California Today

When you start a small business in California you have to make a lot of decisions. You have to choose the entity, structure, create a plan, look for funding, and much more. While this can make the process complicated, the good news is that you shouldn’t have any more issues if you’re looking for a banking solution.

Any of the banks that we covered in our list of the best banks for small businesses in California can be a suitable option, depending on your needs.

Choosing a bank is important, but so is getting your business off the ground. If you haven’t done so already, make sure you learn how to start a business in California before you choose a bank. The type of business, the industry you’re in, and how many people there are can all influence your choices for the best banking options.