8 Best Banks for Small Businesses in California in 2024

For a small business to thrive, partnering with a dependable bank is essential. With many financial institutions offering a variety of specialized products and services, it's challenging to choose the right one. This guide provides a curated list of the top banks for small businesses in California, helping you find the best fit for your business needs.

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8 Best Banks for Small Businesses in California

• Bluevine: Best Secure Online Bank for Small Businesses in California
• Capital One: Best for Rewards
• U.S. Bank: Best for Its High-Level Financial Services
• Bank of America: Best for Payment Services
• Axos: Best Digital Banking App
• Lili:  Best User-Friendly Business Account
• Oxygen: Best for Freelancers
• Chase Business: Best Bank Account for Merchant Service

Our Methodology

To identify the top banks in California, we evaluated their various services and products, considering the cost of maintaining accounts and the minimum balance required to avoid these fees. 

Additionally, we assessed each institution's banking features, fees for services, and interest rates available to potential customers.

Bluevine: Best Secure Online Bank for Small Businesses in California

Bluevine is a highly regarded online banking system among small businesses. It’s known for its secure platform and flexible financing options catering to various business needs. Besides offering long-term loans and credit lines with favorable repayment structures and competitive interest rates, Bluevine stands out with its zero deposit balance requirement and minimal fees.

Why we chose it: Bluevine is the top choice for business bank accounts for LLCs and other business types, due to its high interest rates, minimal fees, and lack of maintenance requirements.

Pros: 

• High-interest rates
• Very few fees
• No minimum deposit required

Cons: 

• No business savings account
• No ATM fee reimbursement
• Fee for cash deposits

Fees

Bluevine doesn’t charge any monthly fees, making it possible to bank without incurring any costs. However, there are fees for using out-of-network ATMs, so using the mobile app to locate free withdrawal sites is advisable. Cash deposits incur a fee of $4.95, so this service should be used sparingly.

Interest Rates

Bluevine offers up to 2.0% APY on checking account balances up to $250,000 for users who spend $500 monthly with their debit card or receive $2,500 in customer payments. Higher APYs of 4.25% are available with Bluevine Plus and Premier tiers.

Minimum Balance

Bluevine doesn’t require a minimum balance, allowing small businesses to start with little and still benefit from the high interest rate.

Access to Mobile Banking

The Bluevine mobile app makes it easy to manage accounts and track expenses from anywhere. The app is user-friendly and allows for vendor payments via wire or check, with the option to schedule payments for future dates.

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Capital One: Best for Rewards

Banking with Capital One offers various rewards, including cashback, travel benefits, and more. They provide competitive loans, merchant services, and a range of financial tools, such as savings accounts and CDs, to help secure your financial future. Read our full Capital One review.

Additionally, Capital One delivers a top-tier banking experience with advanced technological tools like mobile apps and online banking. You can easily transfer funds and manage your account no matter where you are.

Why we chose it: Capital One allows unlimited digital transfers, offering you the flexibility to keep your money moving without restrictions.

Pros: 

• Unlimited digital transfers
• No overdraft fees
• Extensive ATM network

Cons: 

• Limited physical branches
• Monthly account fees
• Out-of-network ATM fees

Fees

Capital One’s business accounts come with a $15 monthly fee, which may be steep for small businesses. However, this fee can be waived by maintaining an average balance of $2,000 over a 30 or 90-day period. There’s no charge for using one of Capital One’s 70,000 ATMs nationwide.

Interest Rates

Capital One’s business savings accounts offer interest rates of up to 0.20% in your first year on balances up to $5 million, providing small businesses with substantial flexibility. However, none of the bank’s checking accounts earn interest, making the free digital transfers even more valuable.

Minimum Balance

There’s no required minimum balance to keep your Capital One account open, but maintaining at least $2,000 in your checking account will help you avoid the $15 monthly service fee. Extra funds in your savings account can also earn interest on money not currently in use.

Access to Mobile Banking

Given the limited number of physical branches, Capital One’s highly-rated mobile app is essential. It allows you to perform transfers, make digital payments, and deposit checks using your device’s camera. The app also includes Capital One’s CreditWise service, which helps you monitor your credit score and provides helpful tips.

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U.S. Bank: Best for Its High-Level Financial Services

U.S. Bank is an ideal choice for small businesses seeking comprehensive financial services. They offer a range of flexible loan options, competitive rates, and repayment plans tailored to your needs. Additionally, U.S. Bank provides various rewards and incentives, such as cashback, Edge Cash Reward credit cards, and SBA cash rewards.

Why we chose it: U.S. Bank stands out for its wide array of lending options, making it a reliable choice for small businesses needing additional funds.

Pros: 

• Customized lending solutions
• Specialized merchant services for restaurants, retailers, and service providers
• 2,400 branch locations

Cons: 

• Overdraft fees
• Low APY on savings accounts
• Branches are available in only 28 states

Fees

Small businesses can enjoy fee-free banking with U.S. Bank’s Silver Business Checking package. As your business grows, higher-tier accounts may come with waivable monthly fees. It’s important to monitor monthly transactions to avoid charges if you exceed the transaction limit.

Interest Rates

U.S. Bank’s checking accounts don’t offer interest-bearing options. While their savings accounts provide some benefits, the maximum interest rate is currently 0.01%. Despite being minimal, there’s no cap on the balance amount that can earn interest.

Minimum Balance

U.S. Bank’s Silver Business Checking package has no minimum balance requirement, making it accessible for small businesses. Other checking accounts may have waivable fees if you maintain the required balance. Savings accounts require a minimum balance of $500 to avoid service fees.

Access to Mobile Banking

If you’re not near a U.S. Bank branch, their mobile app allows you to manage your finances on the go. You can seamlessly transfer funds between accounts and stay updated on your financial status. The app also provides customized alerts to keep you informed.

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Bank of America: Best for Payment Services

Bank of America simplifies financial services for small businesses. Their merchant services make it easy for customers to pay via credit and debit cards, ensuring seamless transactions. 

Bank of America is known for offering some of the best merchant services available. They provide fraud prevention tools and cash management solutions to help secure and grow your business.

Why we chose it: Bank of America offers rewards with several benefits, making banking a win-win for everyone involved.

Pros: 

• Preferred Rewards program to enhance interest rates
• Over 17,000 ATMs and 4,300 branches
• Option to waive the monthly fee

Cons: 

• No 24/7 customer service
• Monthly fees
• Transaction fees for using non-Bank of America ATMs

Fees 

Bank of America’s introductory checking account comes with a $16 monthly fee. You can avoid this fee by maintaining a $5,000 monthly balance, spending at least $250 on your debit card, or becoming a Preferred Rewards member. Additional fees may apply for out-of-network ATM withdrawals and for excessive deposits within a month.

Interest Rates

For most small businesses, the interest rate on a Bank of America savings account starts at 0.01%. This can increase to 0.04% with active participation in the Bank of America rewards system. Checking accounts, however, don’t accrue interest.

Minimum Balance

Maintaining an average monthly balance of $5,000 in your checking account will waive the $16 service fee. Similarly, a $2,500 balance in your savings account will help you avoid a $10 monthly fee.

Access to Mobile Banking

Bank of America’s mobile app consistently receives high ratings for its usability. It allows you to manage accounts, pay bills, and transfer funds from anywhere. The app also includes a budgeting tool to help you track expenses and manage spending effectively.

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Axos: Best Digital Banking App

Axos Bank prioritizes its customers by offering top-notch direct banking services. They ensure the security of financial transactions through Federal Deposit Insurance Corporation (FDIC) coverage. For small businesses interested in investment opportunities, Axos Bank provides solutions through its subsidiary, Axos Invest. 

They also offer a range of services, including business banking, digital banking, and personal banking, which feature business checking accounts, savings accounts, and mobile deposit options. Partnering with Axos Bank can be highly beneficial for your small business.

Why we chose it: Axos Basic Business Checking stands out as one of the best business bank accounts due to its free cash deposits and low fee structure.

Pros: 

• No monthly fees and unlimited transactions
• Unlimited domestic ATM fee reimbursements
• Cash deposits are available via MoneyPass and Allpoint ATMs
• Welcome bonus for new customers (terms apply)
• 24/7 customer support

Cons: 

• No third-party app integrations
• Interest checking APY is decent but not exceptional

Fees

Axos Bank Basic Business Checking has no monthly maintenance fees and no minimum balance requirements to keep your account open. Any ATM fees you incur each month are reimbursed, making this account virtually cost-free. However, if you plan to use this service frequently, be mindful of the $35 fee for each wire transfer.

Interest Rates

This account doesn’t offer an Annual Percentage Yield (APY), focusing instead on business benefits. If you have extra funds, you can open one of Axos’s interest-bearing business savings accounts to earn interest.

Minimum Balance

Axos Bank doesn’t require a minimum balance for its checking and savings accounts. This feature particularly appeals to small business owners who may not have substantial funds to maintain their accounts.

Access to Mobile Banking 

Axos Bank provides a comprehensive mobile banking app that enables customers to manage accounts, deposit checks, transfer funds, pay bills, and initiate wire transfers directly from their mobile devices. The app also includes account alerts and budgeting tools to help customers manage their finances.

>> Start Banking With Axos Bank >>

Lili: Best User-Friendly Checking Account

Lili provides an all-in-one, user-friendly business checking account that simplifies your financial management. Designed specifically for freelancers and small business owners, Lili offers a seamless online checking account that helps you manage taxes, make payments, and handle other business transactions, all in one place.

With no fees or minimum deposit requirements, Lili makes managing your finances both easy and cost-effective, putting control of your funds right at your fingertips.

Why we chose it: Lili’s low fees and tax optimization software help businesses retain more of their hard-earned income. If you're seeking an online business checking account with no credit checks, Lili is an excellent choice.

Pros:

• No fees, minimum balance requirements, or minimum opening deposit
• Unlimited fee-free transactions
• Fee-free ATM access via the MoneyPass network, with the ability to deposit cash through the Green Dot network
• Integrated tools for managing expenses and tax planning
• Early payment feature with direct deposit, allowing you to receive funds up to two days earlier than with traditional bank accounts

Cons: 

• Cash deposits at Green Dot locations carry a fee of up to $4.95 per deposit
• No checkbooks and no options to send or receive wire transfers
• Limited business features, such as no joint accounts, multiple business debit cards, or third-party integrations

Fees

Lili stands out for its free tax software, lack of account, and overdraft fees. You also won’t be charged for foreign transactions or when using over 38,000 in-network ATMs across the U.S. However, out-of-network ATM usage will incur fees ranging from $2.50 to $5.

Interest Rates

Lili’s Business Checking account doesn’t earn interest. For those willing to upgrade, a savings account with a 1.5% APY is available, though maintaining a balance of at least $34,000 is required to offset the monthly fee.

Minimum Balance

Lili has no minimum balance requirement for its checking account, meaning you don’t need to maintain a specific balance to avoid fees. This feature is especially beneficial for new businesses or those with fluctuating income.

Access to Mobile Banking

Lili offers a mobile banking app for freelancers and small business owners. The app allows you to manage finances, control expenses, save for taxes, and manage payments all from your mobile device. Additional features include instant payment notifications, budgeting tools, and the ability to make mobile check deposits.

>> Open Your Lili Account Today! >>

Oxygen: Best Bank for Its Business Offerings

Oxygen has established itself as a standout in the FinTech world by offering an exceptional banking experience and service. For those looking to minimize banking costs, Oxygen is an ideal choice, as it charges no fees for monthly maintenance or overdrafts. 

Their mobile banking platform allows you to manage your account from anywhere, and you can easily fund your business checking accounts through mobile check deposits, direct deposits, and mobile transfers.

Why we chose it: Oxygen caters to modern business owners, offering trendy and innovative banking features. It’s also one of the best checking accounts for sole proprietors.

Pros: 

• Tailored for modern business owners
• 5% cashback rewards
• Ability to create virtual, single-use debit cards

Cons: 

• Not fully mobile-friendly
• No multi-user access
• Higher fees for certain services

Fees

Oxygen advertises itself as fee-free, but it’s important to note that out-of-network and international withdrawals may incur charges. There are no fees for ACH transfers or for keeping your account open.

Interest Rates

Although Oxygen’s business checking accounts don’t earn interest, they offer a business savings account where balances of $20,000 or less accrue 1.0% interest. Higher balances still earn interest but at a reduced rate.

Minimum Balance

Oxygen Bank doesn’t require a minimum balance for its checking and savings accounts. There are no monthly fees, even if your account balance is zero, so you don’t need to worry about maintaining a specific amount to avoid charges.

Mobile Banking Features

Oxygen provides a mobile banking app designed to help small business owners manage their finances. The app allows you to deposit checks, pay bills, and generate account statements from your mobile device. It also offers spending insights to help you track and manage your finances effectively.

>> Open Your Oxygen Bank Account Today! >>

Chase Business – Best Bank Account for Merchant Service

Chase Business offers a variety of business services, including payment collection and fraud protection, plus a $300 bonus just for signing up. With the Chase app, you can even accept credit card payments directly into your account. While there’s a monthly service fee, there are multiple ways to waive it.

Why we chose it: Chase Business goes beyond basic banking, offering a wide range of additional business services to meet your needs.

Pros: 

• No minimum opening deposit
• Unlimited fee-free electronic transactions
• Integrated credit card processing
• Welcome bonus for new customers (terms apply)
• No overdraft fee unless the account is overdrawn by more than $50, with a 24-hour grace period for larger overdrafts

Cons:

• $15 monthly fee
• The monthly limit on fee-free cash deposits ($5,000) and physical transactions (20)
• Fees for using out-of-network ATMs

Fees

While the monthly service fee might be a drawback compared to fee-free accounts, there are several ways to waive it. You can avoid the fee by maintaining a $2,000 minimum daily balance, making $2,000 in net purchases on a business card, or receiving $2,000 in deposits through the Chase QuickAccept app.

>> Open Your Chase Business Account Today! >>

Methodology for the Best Banks for Small Businesses in California

We evaluated various factors to identify the best banks for small businesses in California, focusing on elements that impact account opening and management. We meticulously analyzed these criteria to ensure accurate recommendations.

• Fees: Small businesses often operate on tight budgets, so avoiding banks that impose numerous fees is crucial. We prioritized banks that either don’t charge maintenance fees or offer easy ways to waive them. We also looked for institutions that minimize costs on essential transactions and transfers that businesses regularly perform.
• Interest Rates: While business accounts are primarily for operational needs, earning interest on your balance is a valuable bonus. We highlighted banks offering competitive interest rates on checking and savings accounts, with some options exceeding the national average.
• Minimum Balance: Many banks will waive maintenance fees if you maintain a certain balance, but small businesses might need more substantial funds early on. We focused on banks with low balance requirements to help you avoid fees. Some banks also have minimum balances that unlock interest rates or other rewards.
• Access to Mobile Banking: In today’s fast-paced environment, having comprehensive mobile banking options is essential. We considered banks with robust mobile apps that allow you to manage your finances and make payments on the go. Even traditional banks are enhancing their mobile platforms to stay competitive.
• Ease of Use: We ensured that the features of our top banking picks are user-friendly, from transferring funds and making payments to opening an account with just an EIN. A business bank account should be straightforward and convenient.

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Best Banks for Small Businesses in California Frequently Asked Questions (FAQs)

What Are the Requirements to Open a Business Account in California?

To open a business bank account in California, you’ll typically need business documentation, personal identification for all owners or authorized signers, and a minimum deposit. Some banks may also require additional documents, such as proof of address or a business plan.

Can I Open a Bank Account With My EIN Number?

Yes, opening a bank account with your EIN number is advisable. Any business with at least one employee requires an EIN for tax purposes, and banks use this number to register your account. If you’re the sole employee, you can use your Social Security Number (SSN), but this can blur the line between personal and business finances.

Can I Open a Business Bank Account Without an EIN in California?

No, most banks in California require an EIN to open a business account. You can apply for one through the IRS website if you don't have an EIN.

How Much Should a Small Business Have in a Bank Account?

Setting aside at least six months’ worth of operating expenses as a safety net for any business slowdowns is recommended. Aim to add at least 10% of your profits each month to grow your savings.

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Bottom Line

If you own a small business in California, opening a business bank account is a wise move. It helps manage your finances more effectively, strengthens customer relationships, and facilitates transactions. While Bluevine topped our list, all the banks reviewed offer valuable services.

Always consider factors like ease of banking, available products, and the services offered. You're on the right track if these align with your financial goals.

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