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    • 16 Best Small Business Bank Accounts in Canada

    When starting a small business, opening a business bank account is a crucial step to separate your business and personal finances and ensure legal compliance. In Canada, there’s a wide range of options offered by both traditional banks and financial technology companies, each catering to different business needs. In this guide, we’ll explore the best small business bank accounts available in Canada to help you make an informed choice.

    What is a Small Business Bank Account?

    A small business bank account is a specialized account designed to manage all your business transactions, from handling deposits to making bill payments and receiving customer payments. Opening a small business bank account is essential for several reasons:
    1. Separation of Finances: It separates your personal and business finances, making it easier to manage both effectively.
    2. Professional Image: Having a dedicated business account lends your company a professional appearance.
    3. Tax Compliance: It simplifies tax reporting by keeping clear records of business transactions.
    4. Official Transactions: You can conduct banking activities in your company’s name.
    5. Record Keeping: It helps in maintaining comprehensive records of all business transactions.
    6. Tax Separation: It allows for a clear distinction between personal and business transactions.
    Now, let’s delve deeper into the details of the best small business bank accounts in Canada, highlighting their specific features and benefits in each category:

    Best Unlimited Small Business Bank Accounts:

    1. Alterna Small Business eChequing Account

    • Monthly Fee: $5 (waived with a $3,000 minimum balance)
    • Key Features: This online-only bank account caters to small businesses seeking unlimited transactions and deposits. With access to over 3,000 ATMs, it offers both convenience and flexibility. Notably, it provides free unlimited electronic debit and credit transactions, free incoming Interac e-Transfers, and up to six free Interac e-Transfer Send or Request Money transactions per month.

    2. RBC Digital Choice Business Account

    • Monthly Fee: $6
    • Key Features: Designed for online businesses, this account offers unlimited electronic transactions. It is a cost-effective solution for businesses primarily operating in the digital space. With electronic cheque deposits and Moneris deposits, it streamlines your online banking experience.

    3. Scotiabank Unlimited Account:

    • Monthly Fee : $120 (waived with a balance of $75,000)
    • Key Features:The Unlimited Account by Scotiabank is a premium offering that provides unlimited transactions and deposit items. Additionally, it offers access to ScotiaConnect Digital Banking, making it a suitable choice for established businesses. The monthly fee can be waived with a substantial account balance.

    4. CIBC Unlimited Business Operating Account:

    • Monthly Fee : $65 (waived with a $45,000 minimum balance)
    • Key Features:Tailored for medium to large businesses, this account comes with a comprehensive deposit package that includes a $15,000 cash deposit, a $1,000 coin deposit, and 100 cheques per month, all without extra charges. It encompasses unlimited transactions, including Interac e-Transfers, withdrawals, account transfers, and bill payments.

    5. TD Unlimited Business Account:

    • Monthly Fee : $65 (waived with a $45,000 minimum balance)
    • Key Features: Tailored for medium to large businesses, this account comes with a comprehensive deposit package that includes a $15,000 cash deposit, a $1,000 coin deposit, and 100 cheques per month, all without extra charges. It encompasses unlimited transactions, including Interac e-Transfers, withdrawals, account transfers, and bill payments.

    Best Business Accounts for Smaller Businesses:

    6. TD Basic Business Plan:

    • Monthly Fee : $5
    • Key Features: The TD Basic Business Plan is ideal for startups and small businesses with fewer monthly transactions and deposits. It includes five free transactions per month and five free deposit items per month. The convenience of banking anywhere and making deposits through TD Mobile Deposit simplifies day-to-day financial management.

    7. RBC Flex Choice Business Account

    • Monthly Fee : $7
    • Key Features: The RBC Flex Choice Business Account is designed for businesses that prefer a combination of online and in-branch banking. It allows you to save on transactions made through RBC Online Banking, the RBC Mobile app, and RBC ATMs. Additionally, it offers exclusive access to offers and support from various services, enhancing your banking experience.

    8. Scotiabank Right Size Account:

    • Monthly Fee : $6
    • Key Features: The Right Size Account is a budget-friendly solution for small businesses, offering convenience, lower costs, and better cash flow. With this account, you pay only for the transactions you make, based on a tiered pricing structure. It’s a practical choice for businesses aiming to manage costs effectively.

    9. Scotiabank Right Size Account:

    • Monthly Fee : $22.50
    • Key Features: Tailored for businesses with moderate transaction volumes, the BMO Business Builder Account provides advanced digital banking solutions. It includes two free Interac e-Transfer transactions per month, 35 free transactions each month, unlimited Moneris transactions, and free monthly eStatements, making it an efficient solution for growing businesses.

    10. CIBC Everyday Business Operating Account:

    • Monthly Fee : Varies
    • Key Features: The CIBC Everyday Business Operating Account is a cost-effective solution for small businesses. It encompasses 30 transactions per month and offers a monthly fee waiver based on self-service or full-service access. Additionally, it provides free access to CIBC Online Banking and CIBC SmartBanking for Business, along with a deposit package that includes up to $3,000 in cash, $300 in coins, and 25 cheques deposited each month.

    Best Online Small Business Bank Accounts

    11. Tangerine Business Account

    • Key Features: The Tangerine Business Account offers an online-only business savings account with competitive interest rates. One of its standout features is the absence of minimum balance requirements and monthly fees. This account serves as an ideal complement to your existing business chequing account, providing an opportunity for your business to earn more from its savings.

    12. Wise Business

    • Key Features: The Wise Business account is a versatile online multi-currency international business account. It is designed for businesses involved in international transactions and currency exchange. It offers low fees, convenient money transfer options, and the ability to hold over 40 currencies in your account. However, it does not provide a traditional chequing account, making it more suitable for businesses primarily focused on international payments and currency management.

    13. Caary

    • Key Features: Caary is a corporate credit card powered by Mastercard and a financial platform designed for small- and medium-sized businesses. It offers easy and accessible credit with no personal credit checks, automated expense management, no-fee cards, and no personal liability. With the ability to keep real-time control of business spending and offering physical and virtual cards, Caary provides a practical solution for businesses seeking to streamline their financial operations. It’s free to use and comes with no annual fees and no foreign exchange fees for purchases made outside Canada. However, businesses need to maintain an average balance of $35,000 in a business bank account to qualify.

    14. Loop

    • Key Features: Loop is a digital platform designed for small and medium e-commerce businesses in Canada. It offers multi-currency accounts that allow you to receive payouts in USD and convert them to CAD. The platform offers two account types: Loop Currency accounts, which let you hold money and convert funds in different currencies, and Loop Bank accounts, which include bank account details for receiving local payments. Opening an account with Loop is free, with no minimum deposit or monthly fees. Additionally, Loop provides a Corporate Card for international use, featuring zero FX fees and no annual fees. This account is particularly well-suited for e-commerce businesses looking for cost-effective international payment solutions. However, it may not be the best fit for businesses with more hands-on financial management preferences, as the platform offers automated features.

    15. Vault

    • Key Features:Vault is an online banking platform that caters to small to medium-sized businesses seeking local accounts in different currencies, including USD, CAD, GBP, and EUR. It offers real-time exchange rates that are often significantly more cost-effective than those offered by traditional banks, making it a suitable choice for businesses involved in international transactions. Vault customers do not need to maintain minimum balances or pay monthly or annual fees. Deposits and withdrawals, as well as incoming and outgoing transfers and wires, are all free. However, it’s important to note that Vault operates as an online-only platform, which means it may not be the best choice for businesses that prefer in-person banking and face-to-face interactions with bank personnel.

    16. PayPal for Business:

    • Key Features: PayPal for Business is a widely used payment processing platform that allows small and medium-sized businesses to send and receive payments online and in person. It is known for its ease of use and seamless integration with various shopping carts and e-commerce platforms. Some of its advantages include the ability to set up instant payments, easy-to-set-up recurring payments, and the acceptance of multiple currencies. However, it’s important to be aware of potential downsides, such as high chargeback fees and fees that may be higher than those offered by traditional merchant accounts. The specific fees associated with PayPal for Business can vary, so it’s advisable to review the detailed fee structure on the PayPal website for a comprehensive understanding of the costs involved.

    Do You Need a Business Bank Account?

    While technically not mandatory for sole proprietors in Canada, there are several compelling reasons to consider opening a business bank account:
    • Business Records: If you need to provide detailed business records, such as when applying for a business loan, having a dedicated business bank account enables you to showcase your business’s expenses, cash flow, and revenue effectively.
    • Taxes: A business bank account makes it significantly easier to separate your personal and business expenses, simplifying the process of filing taxes at the end of the year.
    • Payroll Solutions: Many business chequing accounts come equipped with direct deposit and payroll features, making it simpler for you to pay your employees, suppliers, or contractors efficiently.

    How to Open a Small Business Bank Account:

    The process of opening a small business bank account typically involves the following steps:

    1. Choose the Right Bank

    Research and select a bank that offers business accounts suited to your specific needs. You can explore options from traditional banks and online financial institutions.

    2. Gather Required Documents

    Prepare the necessary documents for the application process, which typically include:
    • Personal information: Name, address, birthdate, phone number, and email address
    • Business information: Business name, business address, business registration number, date of operation, basic financial information, and a summary of the business
    • Two forms of identification, including one with a photo ID
    • A document verifying your business address

    3. Complete the Application

    Depending on your bank and business setup, you can apply for a business account online or by visiting a local branch. Be sure to provide all the required information and documents during the application process.

    4. Review Account Features

    Carefully review the features and fees associated with the business account you’re considering to ensure it aligns with your business’s needs and budget.

    Small Business vs. Personal Bank Account

    The primary distinction between a small business bank account and a personal one is that the former is designed for business-related transactions, providing separation from personal assets, allowing multiple signatories, and often requiring a higher daily average balance.

    Pros and Cons of a Small Business Bank Account

    Pros:

    • Separation of personal and business finances
    • Streamlined tracking of business expenses
    • Payroll solutions included
    • Facilitates business accounting and CRA audits

    Cons:

    • Limited monthly transactions.
    • May come with extra fees
    • Typically offers lower interest rates

    Should You Open a Small Business Bank Account?

    Yes, it’s highly recommended to open a small business bank account. The benefits of clear financial separation and simplified accounting outweigh any potential drawbacks. When choosing an account, consider your business’s specific needs and the features provided by different banks to make an informed decision.
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