Top 9 Startup-Friendly Banks in 2023

This informative piece belongs to a larger collection focusing on Business Banking.

When it comes to startups, the ideal banks should offer them exceptional checking accounts with low or no fees, along with specialized services and support tailored to their needs. These banks also excel in providing lending products such as loans and credit lines that can greatly assist new businesses in securing the necessary funds for growth and expansion.

It's worth mentioning that all the providers featured in this article offer products and services that benefit the growth of all types of businesses, including startups. These offerings have the flexibility to scale and adapt as your company experiences growth.

As of March 10, 2023, Silicon Valley Bank has been excluded from this list. Unfortunately, this renowned provider of funding and support for startups faced regulatory shutdown and entered FDIC receivership on that date. Despite a recent unsuccessful attempt to raise venture capital funding, the FDIC has established a new bank, known as the Deposit Insurance National Bank of Santa Clara, which will ensure the availability of insured deposits starting from March 13.

Without further ado, here are the top 9 banks specifically recommended for startups, each accompanied by a direct link to their services:

- Chase: This bank is widely regarded as the best overall option for startups, offering comprehensive banking solutions.

- Novo*: If you're looking for a digital-only bank that provides speedy access to funds and faster payment processing, Novo is the ideal choice.

- Mercury*: For larger-scale startups that have incorporated their businesses, Mercury serves as the best digital bank.

- Bluevine*: This bank stands out by providing the best business line of credit and offers a great opportunity to earn interest.

- Bank of America: With ongoing rewards and low fees for cash deposits, Bank of America is a popular choice for startups.

- Oxygen*: Oxygen specializes in digital-only banking and offers cash back on debit card purchases, making it a highly attractive option.

- Grasshopper: This digital-only bank excels in integrating free payment software, making it a top choice for startups.

- Brex*: Known for its excellent cash management services, Brex caters to the needs of startups and scaled companies.

- Lili*: For startups requiring assistance with digital tax preparation, Lili is the go-to bank.

It's worth noting that the *marked providers operate as financial technology (fintech) platforms. These platforms have entered into partnerships with various supporting banks, ensuring their FDIC insurance coverage. The respective partnerships are as follows: Middlesex Federal Savings for Novo, Evolve Bank & Trust for Mercury, Coastal Community Bank for Bluevine, The Bancorp Bank for Oxygen, and Choice Financial Group, Inc. for Lili. Additionally, Brex has partnered with 10 different banks, all of which are FDIC-insured, as indicated on their official website.

The Finest Banks to Consider for Startup Businesses

Chase: The Top Choice for Comprehensive Start-Up Banking Solutions

Discover our In-Depth Evaluation of Chase Business Complete Banking

  • If your aspiration is to access the full range of traditional banking products and services
  • If you seek the convenience of both physical branches and online banking
  • If you prefer to have both your personal and business banking consolidated in one institution

For fledgling enterprises in need of a comprehensive traditional bank, Chase stands out as the finest option. It provides three distinct business checking alternatives with the ability to waive monthly fees, allowing your business to effortlessly adapt as it expands. As a result, it has garnered recognition as one of the most exceptional small business checking accounts available today.

Moreover, Chase boasts cutting-edge lending products, including credit cards and lines of credit, along with innovative point-of-sale (POS) and software solutions. J.P. Morgan, in partnership with Chase, offers extensive commercial lending solutions, including loans for commercial real estate. J.P. Morgan additionally provides payment services, cash flow management, commercial credit cards, and merchant services.

Regardless of whether your startup solely requires a business checking account or necessitates a comprehensive suite of business banking products and services, Chase has the capacity to fulfill your requirements.

Novo: Optimal Banking Choice for Immediate Access to Funds and Swifter Payments

Take a Look at Our Comprehensive Evaluation of Novo Business Checking

  • If you employ Stripe and desire prompt access to your funds, since Novo Boost enables faster payment processing than other providers
  • If your business frequently withdraws cash from ATMs
  • If an interest-bearing checking account or obtaining lending products from your business checking account provider are of no interest to you

For startup enterprises that receive regular payments through Stripe, Novo represents an exceptional banking option. Its distinctive product, Novo Boost, expedites the process of receiving payments from your Stripe account, surpassing other providers in terms of efficiency. Additionally, Novo offers Express ACH, which facilitates same-day sending and receiving of ACH payments. This ability to promptly send and receive payments establishes Novo as a superior choice over other financial technology options.

Moreover, Novo excels in catering to businesses that regularly withdraw cash from ATMs, as it reimburses all ATM fees at the end of each month. It also provides up to 10 reserve accounts, unlimited invoicing, and superb integration with accounting and payment software. While the option to order checks is not available, Novo does enable sending of paper checks through its application.

Cash deposits do not incur any charges, though a money order must be purchased and deposited through the app. Money orders can be acquired from United States Postal Service (USPS) locations at a cost of up to $2.40 for money orders up to $1,000.

The sole drawback is that Novo does not offer any lending products. Nevertheless, it is an excellent option for startups, particularly those that engage in frequent ATM withdrawals.

Mercury: The Optimum Digital Bank for Larger Incorporated Startups

Discover the Extensive Assessment of Mercury Business Checking

Choose Mercury for Convenient and Fee-Free Digital Business Banking

  • Entrepreneurs who prefer a virtual business bank
  • Companies that don't handle cash deposits
  • Startups and tech companies seeking a no-fee business banking solution

Mercury is a fintech banking service designed specifically for startups and tech companies. Its checking and savings accounts come with no charges and no minimum deposit or balance requirements.

Moreover, Mercury now introduces Treasury, an account that earns interest. This account is exclusively available to customers who maintain a minimum of $250,000 in funds in their Mercury accounts. At present, Treasury offers an annual percentage yield (APY) of up to 4.50%. However, as the prime rate increases, the bank expects the APY to also rise.

In addition to the comprehensive banking features, Mercury now offers the IO Mastercard, a credit card that provides 1.5% cash back and unlimited virtual cards.

Furthermore, Mercury provides exceptional software integrations and presents a perks page where businesses can promote exclusive deals on the Mercury website. Most US-incorporated businesses are eligible for an account, except sole proprietorships and trusts.

You can access more than 55,000 Allpoint ATMs without incurring any ATM fees. Nevertheless, please note that while Mercury does not charge for out-of-network ATM withdrawals, third-party fees may still apply.

The only downsides are the unavailability of cash deposit options and the absence of lending products, other than the credit card and a venture capital term loan program. Nonetheless, for startups in search of a fully digital bank, Mercury is an outstanding choice.

Bluevine: Optimal for Earning Interest and Obtaining a Business Line of Credit

Read our Detailed Review of Bluevine Business Checking

Find Bluevine Perfect if:

  • Your company desires to earn interest on its checking account, satisfying the specified requirements set by Bluevine
  • You require a line of credit, as Bluevine provides the best small business line of credit on the market
  • You prefer a bank that operates solely online

For startups that prefer an exclusively digital financial provider, Bluevine is an excellent choice. It offers interest-bearing checking accounts with an attractive annual percentage yield (APY) of 2.0% on balances up to $250,000. To qualify for this APY, spend a minimum of $500 each month using the debit card or receive customer payments of $2,500 or more in a month.

Bluevine appeals to startups due to its absence of monthly fees, transaction fees, minimum opening deposit, and minimum balance requirements. It also boasts excellent software integrations and provides two free checkbook orders per year.

For cash deposits, there is a $4.95 fee per transaction, and they can only be made at Green Dot retail locations. Furthermore, Bluevine applies a $2.50 charge for out-of-network ATM withdrawals, in addition to any third-party fees. If your business primarily conducts digital transactions and does not heavily rely on cash, Bluevine is an exceptional choice.

Bank of America: Ideal for Ongoing Rewards and Low Cash Deposit Fees

Read our In-Depth Review of Bank of America Business Checking

Look Towards Bank of America If:

  • Your business engages in significant cash deposits on a monthly basis
  • You desire to earn rewards from your checking account
  • You prefer the convenience of both branch and online accessibility

For businesses that deal with substantial cash deposits, Bank of America is the optimal choice. It also provides the opportunity to earn rewards through its checking accounts. Additionally, Bank of America offers the convenience of both branch and online access, providing flexibility to suit your needs.

Here is an alternative rephrased version of the provided text:

  • Bank of America is an exceptional traditional bank that offers a variety of checking options and comprehensive business banking products and services. When comparing Chase and Bank of America, Bank of America emerges victorious in multiple categories.
  • Bank of America provides two distinct business checking accounts that come with monthly fees, although it is possible to have these fees waived. You can collaborate with your business banking advisor to determine the appropriate time for transitioning between accounts. Furthermore, Bank of America offers up to $500 in combined cashback and credit card statement credits as part of its ongoing rewards.
  • With its preferred rewards program for business, you can earn bonus rewards ranging from 25% to 75% on credit cards and obtain a 5% to 20% higher interest rate on business advantage savings accounts.
  • Bank of America also excels in offering noteworthy business savings, CDs, lending products, and financial analysis through Merrill financial advisor. Additionally, you can conveniently check your business credit score through the app in collaboration with Dun & Bradstreet. Bank of America encompasses all the essential products and services that your startup requires to thrive.

Oxygen: Optimal Digital-only Provider for Debit Card Cash Back

Access our Oxygen Business Checking review

  • Startups, freelancers, and individuals in creative fields who desire to manage their personal and business finances with a single provider can rely on Oxygen, as it is one of the few fintech companies that offer both personal and business banking services.
  • Businesses that frequently make debit card purchases can benefit from Oxygen's 5% cash back rewards program.
  • For businesses contemplating a transition to an LLC, Oxygen facilitates this process through its user-friendly app.

Oxygen presents an excellent choice for startups, freelancers, and creative professionals, as it is a digital-only bank designed specifically for them and other small businesses. It enables a 5% cash back reward on all debit card transactions.

Moreover, Oxygen caters to small businesses seeking a unified solution for personal and business banking needs. It stands among the few fintech companies that offer both banking services.

Additionally, Oxygen targets business owners considering the incorporation of their businesses. Through the Oxygen app, powered by CorpNet, Inc., it facilitates nationwide creation of LLCs. Please note that certain fees are associated with this service.

Oxygen also provides a business bank account that does not impose monthly fees, minimum balance requirements, or transaction limits. Deposits can be made through Green Dot locations for a fee of $4.95 per transaction, or via in-app mobile check capture, ACH, or Plaid from an external account. The FinTech Breakthrough Awards recognized Oxygen's app as the Best Overall FinTech Mobile App of 2021.

Furthermore, Oxygen offers a business savings account with a 1% APY on balances up to $20,000. However, it does not support outgoing or international wire transfers, and the app does not allow the configuration of multiple users. Oxygen only permits a single sign-on (SSO) per account, which places it behind many other fintech companies mentioned in this guide.

Grasshopper: Leading Digital-only Bank for Integrated Free Payment Software

Explore our Grasshopper Bank Business Checking review

Grasshopper: The Ultimate Choice for Interest-Bearing Business Checking

  • If you desire a business checking account that earns interest, Grasshopper is the perfect solution. It offers an uncapped APY of up to 2.25%, with no minimum balance requirement.
  • Enjoy cashback rewards on both online and in-store purchases made with your debit card.
  • Experience the convenience of a digital bank that seamlessly integrates with QuickBooks and payment software, such as Autobooks, provided to you free of charge.

Grasshopper caters specifically to startups, providing a digital-only banking experience. It stands out among other fintech options by offering the highest interest rate for checking accounts. With Grasshopper, you can earn up to 2.25% APY, without any minimum or maximum balance limits. That's not all – you also receive 1% cash back on every online and in-person debit card purchase.

To enjoy the benefits of Grasshopper's interest-earning feature, there is no requirement for a minimum or maximum balance. However, customers must maintain an average balance of at least $10,000 and ensure no NSF (nonsufficient funds) items are recorded within the preceding 12 calendar months.

In addition, Grasshopper allows unlimited transfers, including free wire transfers, both domestically and internationally. Monthly fees and transaction limits are non-existent.

Apart from its remarkable features, Grasshopper has excellent integrations with QuickBooks, as well as complimentary access to Autobooks. You can easily manage your finances and enjoy the convenience of free ATM withdrawals at over 45,000 MoneyPass and SUM ATMs. Their mobile app is equipped with modern APIs, making it the perfect tool for powering your startup.

Grasshopper even provides specialized financial services such as SBA lending, commercial real estate lending, yacht lending, venture capital, and private equity lending.

The only drawback worth mentioning is that Grasshopper does not accept cash deposits. However, you only need $100 to open a business checking account, and there are no minimum balance requirements after the account is opened.

Brex: Unleash the Power of Cash Management for Startups & Scaled Companies

Discover the Impressive Capabilities of Brex Cash

  • If you frequently transfer money, Brex is the ideal choice with free ACH, check, and wire transfers.
  • No need to deposit cash as Brex does not accept cash deposits.
  • No ATM withdrawals required as Brex's debit card does not allow cash withdrawals.

For startups, Brex is the go-to digital-only bank. Their checking product, Brex Cash, offers a range of benefits. It has no opening deposit requirement, no minimum balance requirement, no limit on free monthly transactions, and no monthly fees. The standout feature is the absence of wire fees, saving you significant money on regular wire transfers.

Brex has recently updated its qualification requirements, targeting startups and scaled companies. To qualify for a Brex account, you must meet one of the five criteria listed on their website. If you do not meet the criteria, fret not, as there are alternative options available that can perfectly serve your business needs.

Besides its exceptional checking account, Brex also provides a money market account with impressive interest rates of up to 4.13%. They also offer a business credit card with uncapped rewards, comprehensive spend management, expense tracking, bill pay, and financial modeling tools. Moreover, the Brex app seamlessly integrates with a variety of business and finance applications.

When it comes to security, Brex has partnered with 10 banks, each insured for up to $250,000 through the FDIC. These partner banks ensure that your deposits are spread out, providing FDIC insurance coverage of up to $1 million for your company.

Best Option for Startups Needing Digital Tax Assistance: Lili

Check out our Lili Business Checking review

  • If you require tax preparation assistance, Lili is the perfect choice as it offers a tax optimizer integrated into its app, enabling automatic creation of your Schedule C
  • If you want to generate invoices directly within your banking app, Lili's Pro account provides unlimited invoice creation at no extra cost
  • If you prefer to handle your own accounting, Lili Pro allows you to create invoices, accept payments, and scan receipts all within the app

Another exceptional option for startups and freelancers is Lili, offering an excellent business checking solution and an impressive app-based tax optimizer. By upgrading to Lili Pro, you gain access to the tax optimizer, enabling you to track potential write-offs, allocate funds to a tax bucket, scan receipts, complete your Schedule C within the app, and generate quarterly and annual expense reports.

Lili Basic is the free checking product, while Lili Pro is available for per month, providing 1% cash back rewards, fee-free overdrafts up to $200, a savings account with a 2.0% APY, and the ability to create and send unlimited invoices.

Both accounts offer a debit card, early direct deposit for faster payment, built-in expense tracking, and transparent fee structures.

In addition to the Lili app, you can now access your Lili account through a browser login. Furthermore, Lili now allows multi-member LLCs, S-corps, general partnerships, and limited liability partnerships to sign up, in addition to sole proprietors (with or without a DBA) and single-member LLCs who were already eligible.

However, B-corps, C-corps, and non-profit organizations are currently not eligible for an account with Lili.

Regrettably, Lili does not support wire transfers, nor can you order or send checks through the app. Cash deposits can be made, but only at Green Dot retail locations for a fee of $4.95 per transaction.

Our Evaluation Process for Selecting the Best Banks for Startups

During our review of the top banks for startups, we took into account the following factors:

  • Monthly fees
  • Required opening deposits and minimum balance requirements
  • Transaction limits before incurring fees
  • ACH and wire transfer fees
  • ATM fees and availability
  • Cash deposit fees and availability
  • Potential interest yields
  • Additional perks offered with checking accounts
  • Integration with software platforms
  • Other available business services and lending products
  • Quality of customer service
  • Feedback from customers

Requirements for Opening a Startup Business Bank Account

Each provider on our list may have different document requirements for opening a business bank account. Generally, you will need the following:

  • Employer identification number (EIN) or Social Security number for sole proprietors
  • Certificate for fictitious business name or doing-business-as (DBA)
  • Documents related to your business formation
  • Organization documents, including ownership agreements
  • Business licenses
  • A valid government-issued photo ID, such as a passport or driver's license

Frequently Asked Questions (FAQs)

Which bank is the best choice for a startup business?

Chase is considered the top traditional bank for startup businesses due to its waivable monthly fees, scalable checking options, and comprehensive range of business support products and services.

Can I use my personal bank account for my small business?

While some small businesses, especially startups and freelance ventures, may be tempted to use personal bank accounts for their business expenses, it is not recommended. Opening a business bank account allows for clear separation of personal and business finances, facilitates the establishment of business credit, and simplifies tax management, among other benefits.

Do banks offer financial assistance to startups?

Startups can obtain startup business loans, but banks are more inclined to provide loans to startups that already have an existing relationship with the bank. This highlights the importance of opening a business bank account, as it helps build credit and reputation, improving the chances of securing a loan. Otherwise, startups may find themselves resorting to easy business loans, which often come with high interest rates and fees.

Final Thoughts

The financial institutions listed here can effectively meet your startup's banking needs during its early stages. They offer exceptional business checking solutions in addition to a range of other products and services. When selecting the right provider for your business, consider the specific products and services you require from a business bank, and choose accordingly to ensure your needs are met.

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