Introduction
Selecting a bank is a critical decision for any business. Many business owners start by Googling "best business bank," but that approach often leads to affiliate-driven recommendations rather than tailored advice.
"I remember my first business when I started to set up, I just Googled ‘what are the best banks for small business’ and just walked through that list. And it took me forever to find the right bank for me. That was a mistake."
This article will help you think like a CFO when choosing a banking partner, ensuring your decision supports your business’s financial health.
The Pitfalls of Googling “Best Business Bank”
A simple Google search often leads to affiliate pages that push banks with high referral payouts rather than the best options for your needs.
"Most of the top-ranked articles that you find are mostly affiliate pages. They’re pushing you towards big banks with the biggest referral payouts. Shocker."
Instead of relying on biased rankings, business owners should evaluate banks based on their actual needs and operations.
Evaluating Banking Options
Banking choices range from large national banks to credit unions and neo-banks, each offering different benefits. Consider these key factors:
Transaction and Integration Ease
"Does this work well with the tech stack that I've set up? Does it work well with QuickBooks? Does it work well with Xero? How easy is wire processing, ACH transfer, and bill pay?"
A good banking partner should integrate seamlessly with your existing financial tools.
Fee Structures and Hidden Costs
Fees can add up quickly, particularly for businesses with high transaction volumes.
"If you're sending a wide variety of payments each month, those wire fees can really add up."
Neo-banks often have fewer fees but may offer lower yields than traditional banks.
Customer Service and Relationship Management
Even digital-first banks should provide strong customer support.
"Even with neo-banks, you want to know somebody at the bank. Relationships still matter."
Traditional banks may provide dedicated bankers, whereas neo-banks often use customer success teams.
Access to Capital
"Can you get financing through the bank? Does this bank understand the needs of my business?"
Businesses with high working capital needs, such as e-commerce companies, should ensure their bank understands their financing requirements.
Security and FDIC Insurance
Since the collapse of SVB, FDIC insurance and fraud protection have become top priorities.
"You’re seeing the Mercury’s, the Rho’s, the Brex’s of the world have access to sweep networks that spread your money across multiple banks to increase FDIC insurance coverage."
Business owners should verify where their money is held and how much of it is federally insured.
Recommended Banking Options
Mercury
"Really good for growth businesses, particularly fully digitally native businesses. They’ve got a great UI, no fees, and strong customer support."
Rho
"Great for high-growth businesses with an emphasis on cash management tools and low-cost wires."
QuickBooks Checking
"Integrated directly with your accounting system, and offers a solid high-yield account for idle cash."
Other Options
- Brex & Relay – Digital-first banking solutions.
- Chase, Bank of America, Wells Fargo – Good for businesses needing physical branch access.
Choosing a Banking Strategy
There’s no one-size-fits-all solution, so consider:
- Spreading funds across multiple banks – One for operational needs, another for idle cash.
- Using separate accounts – Allocate accounts for taxes, payroll, and operating expenses.
- Regularly reviewing fees and transfer times – Ensure cash moves efficiently.
"Don’t pick a bank just because it’s convenient or has a local branch. Avoid the mistake of not reviewing your bank fees and transfer times regularly."
Conclusion
Your banking relationship should support your financial operations, not hinder them. Thinking like a CFO when selecting a bank can prevent costly mistakes and ensure smoother financial management.
"If your bank’s not satisfying your needs, start evaluating how you can create a better banking relationship to build a more profitable, sustainable, and healthier business."
