Finding the best business account in Canada can quickly become a hassle many small business owners would rather avoid. It is possible to think you do not need a business account for your small business. Maybe you’re concerned about the extra paperwork you have to fill or the higher charges that come with a business account.
You may think that you are an excellent record keeper capable of running your business transactions in your personal bank account to save cost and time.
But if your small business has a high volume of transactions, it is a far more convenient proposition to open a separate account. A business bank account for your small business offers you the option of allowing your employees to use debit cards and write cheques with business funds.
You’d hardly see a business owner who’d give their employees access to their personal bank account. It is worth mentioning that opening a separate account is mandatory if the business is incorporated.
Disclaimer: Rates and product offerings are always changing, so this article might not reflect the current market situation. Please contact your financial advisor before making any financial decisions.
Best Physical Banks for Small Business in Canada
If you have never heard of the Big 5, they are the five traditional banks in Canada with a national footprint. These banks control a considerable market share of the banking market. Below are their business banking options for small businesses.
1. Scotiabank
Scotiabank provides multiple business account options, with each account tailored to meet your business’s specific needs. Although Scotiabank has a higher fee than some of its rivals, the bank will waive certain charges when you maintain a lower balance than the competitors require, making it a nice feature.
Scotia Bank Business Account Options
Scotiabank integrates its online banking platform with regular business accounts, so you will not find a free online-only account. Some of the business accounting options are:
Right Size Account
The right size account is the entry-level account for small businesses. It has a monthly fee of C$6, and this excludes monthly transaction fees. On the plus side, there is no minimum monthly balance.
Basic Business Account
This account has a monthly fee of C$10.95 for users with a bank balance of not less than C$8000. Scotiabank also charges a transaction fee monthly, except you have a minimum of C$1500 per month.
Select Account A
The Select Account A carries a monthly charge of $18, which the bank can waive for users with not less than C$15000. Some features of the account are 25 free transactions and 50 deposits monthly.
Select Account B
This business account has a monthly fee of C$35, which the bank will forego for users with a balance not less than C$30,000. Scotiabank provides 70 free transactions monthly and 60 deposits per month.
Select Account C
Select Account C draws a monthly charge of C$70, which Scotiabank will waive for users with a balance not less than C$40,000. The bank provides 125 free transactions per month and 85 deposits monthly.
Select Account Unlimited
This business account has a monthly charge of C$120 waivable by Scotiabank for users with a bank balance not less than C$65000. Deposits and transactions are unlimited monthly.
Professional Plus
This business account has a monthly charge of C$38 with 110 transactions monthly and no mandatory minimum balance.
Business Investment Account
Business Investment Accounts pays a higher interest rate than other business accounts; however, the individual must maintain a monthly balance of C$2500. The transaction fee is also tailored to the user.
Scotia Online Banking Alternatives
ScotiaConnect: Allows customers to transfer funds, automate payments, pay employees, receive wire transfers, and view account details.
Mobile Banking for Business: This online account allows users to make bill payments, view statements, and bank balance as well as handle account transfers via mobile app.
2. Bank Of Montreal (BMO)
BMO small business account has an array of banking options for small businesses, including unique filters that give users a chance to find the account that meets their needs. While the fee structure is slightly on the high side, the bank provides more transactions than its competitors. Customers can also change their business accounts without paying additional fees.
BMO Business Account Options
Business Start
As the name suggests the Business Start account is the entry-level account for small businesses. The monthly charge is C$6, seven transactions each month, and no mandatory minimum balance.
Business Builder 1
The monthly fee jumps to C$22.50, 35 transactions, and no mandatory minimum balance.
Business Builder 2
This has a C$45 monthly fee with 70 transactions each month and no mandatory minimum balance.
Business Builder 3
This comes with a C$80 monthly fee and can be waived for users with not less than C$35000. The bank provides 120 transactions each month and no mandatory monthly minimum.
Business Builder 4
This comes with a C$120 monthly fee and can be waived for users with not less than C$80000. The bank provides 120 transactions each month and no mandatory monthly minimum.
Business Premium Rate Savings Account
Although the monthly transaction fee depends on the individual, the account pays a higher interest rate than other BMO business accounts.
BMO Online Options
eBusiness Plan: this is an online-exclusive business account with no restrictions on electronic transactions, monthly fees, and has no minimum monthly balance. Most BMO business accounts come with free transactions courtesy of Moneris, a digital payment processing platform.
Another good thing about online banking with BMO is that most fees are avoidable when you transact online, ensuring the transactions do not count towards the monthly limit.
3. Canadian Imperial Bank of Commerce
CIBC is replete with a variety of banking services for the small business owner. Although the monthly transaction limits are stricter than most, the fees are also lower than what you’d find with many of its competitors.
CIBC Business Account Options
Basic Business Operating Account
Like it’s competitors, the entry-level account has a monthly C$6 fee, including individual transaction charges. However, there isn’t any mandatory minimum balance.
Everyday Business Operating Account
The second tier has a monthly C$20 charge for DIY service and C$25 for full-service. CIBC will waive this fee for customers with not less than a C$15000 bank balance coupled with 30 transactions each month.
Advanced Operating Business Account
This account’s monthly fee stands at C$35, which CIBC will waive if you have not less than C$35,000 in your bank balance. Customers are entitled to 100 free transactions each month.
Unlimited Business Operating Account
This account’s monthly fee stands at C$65, which CIBC will waive if you have not less than C$45,000 in your bank balance. Customers are entitled to unlimited free transactions each month.
Business Investment Growth Account
This account’s transaction fees are tailored per individual with no monthly charge, monthly minimum balance, and a slighter higher interest rate than the other accounts.
CIBC Online Banking Options
Smart Banking for Business: this is a tool that allows customers to integrate payroll data and other accounting information from any accounting software.
CIBC Online Banking for Business
This option gives customers access to account information, enabling them to make money transfers and pay bills from one user interface.
CIBC Mobile Banking App
The mobile banking app gives users some control over their business banking accounts. The app is available on smartphones and tablets.
One standout feature of CIBC is that it allows users to make transactions that don’t reflect on the limit, particularly e-transfers through Interac.
4. Royal Bank of Canada
Also known as RBC, the Royal Bank of Canada provides simple business solutions for small business owners.
RBC Business Account Options
Some of their banking options include:
Flexible Account Package
This package is the beginner level account for RBC. It has a monthly C$6 charge, no minimum balance requirement. Fees are charged individually for full service with a discount on self-service.
All-inclusive Account Package
The all-inclusive package has a monthly fee of C$100, which RBC will waive for users with a bank balance not less than C$75000. The account has no minimum balance requirements and up to 100 free paper transactions each month.
Basic Business Savings Account
The Basic Business Savings Account charges a transaction fee for full-service deposits while providing two free debit transactions monthly. There isn’t any monthly minimum balance, and the account offers slightly higher returns compared to RBC’s business chequing accounts.
Maximize Your Interest Account
This account provides two free debit transactions monthly coupled with a transaction fee for full-service deposits. To earn interest, users will need to have a minimum of C$100,000 monthly. The account makes higher interest than any other RBC business chequing account, including the Basic Business Savings Account.
RBC Digital Account Package
This account package has a monthly fee of C$5 with unlimited electronic transactions each month. However, there is a charge for individual transactions using full-service deposits.
RBC also provides e-transfer transactions courtesy of Interac and deposits via Moneris, which do not affect your account transaction limits.
5. TD Canada Trust (TD)
Small business owners like you can rest easy with TD what with the different bank accounts with features that you need.
TD Business Account Options
TD has numerous business accounts, which includes:
Basic Business Plan
TD’s entry-level account has a slightly lower charge than others, with customers paying C$5 monthly. TD provides five free deposits and five transactions monthly with no minimum bank balance.
Everyday Business Plan A
If you prefer this account, prepare to pay a monthly fee of C$19, which TD will waive if your bank balance is not less than C$20,000. The account comes with twenty free transactions and fifty deposits monthly.
Everyday Business Plan
The Everyday Business Plan has a C$39 fee every month. TD will waive this fee if you have nothing less than C$35000. The account lets you make fifty free deposits and sixty transactions monthly.
Everyday Business Plan C
This account comes with a C$72 fee waivable for customers with a minimum bank balance of C$45000. The account has 120 free transactions and 50 free deposits monthly.
Unlimited Business Plan
The Unlimited Business Plan is an account that has a monthly fee of C$125 waivable with a C$65000 bank balance and unlimited deposits and transactions each month.
Business Savings Account
This account has a deposit and debit transaction fee. However, there isn’t a minimum monthly balance, and it pays higher than the typical TD business account.
TD Online Banking Alternatives
Some accounts enable you to enjoy free transfers through the Interac platform without counting such transactions against your monthly limit. TD does not provide a designated digital account for small businesses; however, it does have a mobile banking app.
Best Online Banks for Small Businesses in Canada
If you’re comfortable with the thought of operating an online-only bank account for your small business or sole proprietorship, you should check out the best banks below:
6. Tangerine Bank
Tangerine Bank provides chequing accounts for individuals and savings accounts for both individuals and businesses alike. The Tangerine Business Savings Account combines well with your business chequing account with another bank.
Tangerine Bank Business Account Options
Chequing
This Tangerine Business Account has no debit or deposit transaction fees, unlimited Interac electronic transfers, and no minimum monthly balance. It also pays a slightly higher interest compared to the business chequing account of traditional banks.
Business Savings
The Business Savings Account has no debit or deposit transaction fee and no minimum monthly balance. The interest rates are slightly higher than what you’d find in most traditional banks.
7. Wealthsimple
Wealthsimple is much more than a Robo-advisor. It also provides some essential banking services, as seen below:
Wealth Simple Business Account Options
Invest for Business Basic
This account is for business owners with up to C$100,000 bank balance. It has no rebalancing fee, transfer, or trading fees and automatic reinvestment of returns. The maintenance fee is 0.5%.
Investment for Business Black
This account is for business owners with more than C$100,000. It has no rebalancing fee, transfer, or trading fees and provides an automatic reinvestment of returns. The maintenance fee is 0.5%.
8. Motusbank
Motusbank provides online-only savings and chequing accounts. The accounts are not explicitly designed as business accounts but can be used by sole proprietorships.
Motus Bank Business Account Options
Chequing
The chequing account has no deposit or debit transaction fee, no monthly minimum balance, no bill payment fee, and unlimited transfers courtesy of Interac. The interest rates are higher than those offered by the Big 5 lenders.
Savings
The savings account has no deposit or debit transaction fee, no monthly minimum balance. The interest rates are higher than those offered by the Big 5 lenders.
Conclusion
The term “best bank” is subject to the needs of the small business owner. Your monthly volume, surplus cash, and business size will ultimately determine what bank is best for your business.
