The Ultimate Guide to Switching Business Bank Accounts

Randa Kriss

Randa Kriss is a staff writer at Fundera, where she has written dozens of reviews on ecommerce, merchant services, payroll, and human resources solutions. She has a bachelor’s degree in English and Spanish from Iona College. Randa has previously written for the American Kennel Club, Planted, and Serendipity magazine.

As you go about your day-to-day business operations, you may forget just how integral your business bank account is to your small business. After all, you started the account for a reason—and when you stop and think about it—you use it much more than just as a place to store funds. You may use your business bank account to pay your bills, employees, suppliers, or all three. This being said, although you may have an established history with your current bank and account, there may come a time when you might consider a change.

Whether you change your business bank account within the same bank, or transfer to a new bank entirely, you should reevaluate your business bank account and financial needs every few years to ensure that you’re getting the most out of the account you have. So how do you know it’s time to change business bank accounts? And, if you do decide a change is necessary, how do you actually go about switching business accounts?

In this guide, we’ll answer both of those important questions—breaking down signs that indicate it might be time for your business to change bank accounts. Plus, we’ll explain step by step how to switch from one account to another, so that if you do change business bank accounts, your operations aren’t interrupted by the transition process.

Signs You Need to Change Business Bank Accounts

When you chose your business bank account—whether a business checking account, a business savings account, or both—it was an important decision. You thought carefully about what was the best account for your business and what best fulfilled your needs at the time. If it’s been some time since you first opened your business bank account, it might be worth considering a change.

As time has passed, your business has probably changed and grown, and your banking needs might not be the same as they were when you first opened your account. This is why, therefore, it’s a good idea to reevaluate your business’s financial products, like your bank account, every few years. There are a multitude of reasons, as we’ll explain shortly, as to why you might want to switch business bank accounts—and each is as valid as the next for considering a change.

Here are signs to be on the lookout for that might indicate it’s time to change business bank accounts:

You need more than your current bank account offers.

As your business progresses, you might outgrow your office space, accounting software, or even your business bank account. If your business has grown and you feel like you need more than what you’re currently getting from your business bank account, it might be time to switch.

Let’s explain:

If you started your business with an account like Chase Total Business Checking, which has 100 free transactions per month, but you’re now regularly making 200 transactions per month, you might consider switching to an account that offers more free transactions, like Chase Performance.

Not only does upgrading to an account like Chase Performance Business Checking give you more free transactions—and save you the money you were paying every month for transactions over your free limit—but you’ll also receive additional flexibilities that come with this kind of account. A more robust account like, in this case, Chase Performance, can offer greater free cash deposits, monthly free wires, and other beneficial features that you may not have with your current account. If you need more free transactions, free wires, or any kind of functionality that your current account does not supply, therefore, you might consider looking at a different business account your bank offers, or an account from another bank altogether.

Returning to the example of Chase Total Business Checking, if you’re looking for more free monthly transactions, you might consider Chase vs. Bank of America business accounts. Compared to the 100 free transactions with Chase Total, Bank of America’s Business Fundamentals Checking account offers up to 200 free monthly transactions. Moreover, their next level business checking account, Business Advantage, offers 500 free transactions per month.

You’re paying too much in fees.

As a small business owner, costs and spending are always top of mind. If, therefore, you feel like your business bank account is costing you too much money, it might be time to switch. As we mentioned previously, you might be incurring costs with your account from transaction or wire fees, and you have the option to find an account that can offer more features included. On the other hand, you may be facing other fees that you were not aware of when you first signed up for the account and now they’re adding up. Or, perhaps you’re paying a monthly fee on your account and want to find one that doesn’t charge said fee.

Regardless of the specifics, if you’re paying a significant amount each month in fees for your business bank account, it might be time to look for a more cost effective option. If you’re looking for an account with virtually no fees, you might consider an account from an online bank, like Azlo or Novo, both of which are essentially free business checking accounts.

business owner researching to change business bank account

You do the majority of your business banking online.

If you have a business bank account with a traditional brick-and-mortar bank, but don’t actually take advantage of their features—like ATMs, branch access, and cash withdrawals—you might consider switching business bank accounts to a bank designed specifically for online use.

As we mentioned, Azlo and Novo are both examples of online-only banks—both of which have very few fees, allow you to quickly and easily open a business bank account online, and include almost unlimited transactions. Additionally, some online banks, like Azlo, also have ATM networks that you can use if you do end up needing cash access. These online banks are growing and developing quickly, adding more capabilities and features as business owners need them. With this in mind, if you are, in fact, doing most of your business banking online and not using the features associated with your traditional bank, it might be worth changing your business bank account to an online-only bank.

On the other hand, of course, the reverse is also true. If you signed up with an online bank because the process was simple and accessible, but have found that you need the access of a brick-and-mortar bank, it may be worth transferring your business bank account from your online bank to a traditional one.

You want more offerings from the bank itself.

Just as you may want to switch business bank accounts because you’ve outgrown what your current account offers, you may want to switch banks for a similar reason. If you currently bank with your local community bank, for example, and find that your business has expanded and you need more physical access to your bank, you might decide to switch to a bigger bank for your small business that has more locations. Similarly, you might find that your local bank doesn’t offer as many small business services and solutions as other, larger banks.

If, therefore, you think your business could benefit from finding a bank, like Chase or Wells Fargo, that offers not only bank accounts but also merchant services, loan products, and specific small business assistance, this could be a sign that it’s time to change business bank accounts.

You want to start saving.

If your business finances have grown, you may decide it’s time to start investing and open a business savings account in addition to your business checking account. Similarly, you might consider changing your regular business checking account to a checking account that accrues interest.

In the case of business savings accounts, however, it’s important to remember that not all banks that offer business checking accounts offer business savings accounts as well. Some of the online banks we mentioned, like Novo and Azlo, for example, don’t offer savings accounts. This being said, if you have a business checking account and want to add a savings account, you might decide to reconsider both of your accounts so that you can find a bank that can bundle these services for you.

Furthermore, some banks, like Chase for example, offer certain benefits for businesses who have both a business checking and savings account with them. If, therefore you want to open a business savings account to add onto your business checking account, you should consider your options both inside and outside your current bank.

You’re dissatisfied with the service of your current bank.

Another sign that indicates it’s time to change business bank accounts is that you’re simply dissatisfied with the service of your current account and bank. With all of the options available to you and your business, it’s always worth considering what else is out there, especially if you’re unhappy with your service. More than likely, as you explore different business bank account offerings, you’ll be able to find something that not only meets your needs, but also that offers you the important services you feel you’re lacking in your current situation.

Whether you’d like better customer service, more access to support, a more reliable mobile app, or a more robust online banking experience, it’s always worth researching and reading the reviews of other banking products as well as talking to other business owners and professionals about what they use and recommend. At the end of the day, if some part of your business bank account service is negatively impacting you and your business operations, it’s time to see what else is out there.

business owner researching to change business bank account

How to Transfer Business Bank Accounts: Step-by-Step Instructions

Now that we’ve gone through some of the signs that it might be time to change business bank accounts, let’s break down how to actually go about switching your account.

Step 1: Research your business bank account options.

Before you can actually switch your business bank account, you need to decide what bank or alternate account you’re going to change to. In order to make this decision, you’ll want to prioritize what you need most out of your business bank account and research the options on the market to see which account and provider will work best for your business.

Through this process, you’ll not only want to focus on your current needs, but consider the future—thinking about how different accounts will be able to accommodate your business’s advancement and growth as well.

Once you’ve identified accounts that you’re interested in, you might want to contact those banks and ask for specific information—including account fees, rates, and additional services they offer for small businesses. Along these lines, it might be worth asking about funding options, like if the bank has an SBA loan program, as well as if they offer account or branch managers and how their accounts integrate with accounting or other business software. If you’re not sure where to start looking, consider asking your CPA, business lawyer, or other business advisors for their suggestions and advice.

Step 2: Apply for and open your new business bank account.

Once you’ve completed your research and decided on your new business bank account, the next step will be to actually apply for that account. Here it’s worth noting that the process for changing business bank accounts within the same bank will be different than changing from one bank to another. For clarity’s sake, we’ll discuss the more in-depth process of switching your business account to a new bank in full, and then explain how to execute this change within your current bank.

This being said, when you apply for a new business bank account, you’ll complete the application just as you did when you applied for your current account. Depending on the account you’ve chosen, you’ll apply either online or in person and supply various business identifying and financial documents to complete the application.

After you’ve been approved for your new business bank account, you’ll want to confirm everything is operating correctly before making any changes to your old account. You’ll want to make sure you have access to your new bank account online, on your mobile device, or in person, as well as that you’ve received any business debit cards and have tested transferring funds.

Step 3: Ask your new bank about a transfer kit and begin the transfer process.

Some banks, like PNC, offer business bank account transfer kits, specifically designed to make the process of changing business bank accounts more seamless. If your new bank offers a transfer kit, you’ll want to take advantage and follow the process as outlined in their kit. Generally, however, you’ll want to begin the transfer process by identifying recurring transactions that you need to change and notifying parties that your business works with of your bank account change.

Identify Transactions Applicable to Business Bank Account

One of the first steps involved in the process of changing business bank accounts is to identify the transactions that currently go through your existing account that you’ll need to update. A benefit of transfer kits, if your bank offers one, is that they often include a checklist to help you identify these kinds of transactions. However, transactions that you may need to update include:

  • Payroll and direct deposit for employees
  • Payments to suppliers, software providers, etc.
  • Payments to business advisors or consultants—these individuals might need to know about the change for their participation in your business operations as well.
  • Automatic invoices or transfers for customers

Notify Relevant Parties of Change in Business Bank Account

Once you’ve identified the transactions where you use your business bank account on a regular basis, you’ll want to notify the relevant parties of your bank account change. In these cases, your bank may be able to provide you with an account transfer letter, or similar form that you can send to the parties with whom you do business. This letter will inform them of the change, instruct them not to file payments through your original bank account, and provide them with your new bank account information.

A particularly important part of this notification process to keep in mind is timing. If you’re switching your payroll, for example, you’ll want to time the switch accordingly, to ensure that your employees are still being paid on time. Along these lines, it may be beneficial to let your employees, as well as other parties, know that there may be delays or issues that could occur through the transition process. This way, everyone is not only aware of the process that is occurring, but they’re also prepared in case any problems arise and can contact you for help if necessary.

change business bank account notification letterExample of business bank account change letter from PNC Transfer Kit. Source: PNC

Step 4: Stop using your old business bank account.

After you’ve made all the necessary notifications and you start to receive and make payments through your new business bank account, you’ll want to stop using your old account. In doing so, however, you’ll want to give time to allow payments to clear in your new account and ensure your business financial operations are running smoothly. It may help to leave some funds in your old account throughout the transition process, just in case you miss a notification or timing is delayed.

Step 5: Inform your old bank that you’re transferring to a new bank and cancel your account.

When everything has been set up through your new business bank account and operating correctly, you’ll want to inform your old bank account that you intend to close your current account. Despite your reasons for leaving, you’ll want to make the notification brief and professional and, if you so choose, explain honestly why you’ve decided to move to another bank.

The manner in which you can cancel your account will depend on the bank. You may be able to call to cancel your account, or you may have to go to a branch as well as submit a cancellation notice in writing. When notifying your bank, you’ll want to review all cancellation processes with them and ensure that you’ll be able to access any funds you have left and transfer them to your new business bank account. After these processes are complete, you’ll officially be transitioned to your new account.

How to Switch Business Bank Accounts Within Your Current Bank

As you can see, changing business bank accounts between different banks is an involved process. If, however, as we mentioned earlier, you choose to switch your account within the same bank, the process is going to be much simpler. Calling back to our earlier example of upgrading from a Chase Total Business account to a Chase Performance Business account, to make this switch, you would contact Chase directly, either over the phone or in-person and a representative would be able to help facilitate the changes.

Unlike switching to a whole new bank, your current bank will be able to make the changes to your business account and instead of having to apply for a whole new account, the features of your account with that bank will simply be updated. You’ll be able to keep your account number—and therefore, you will not have to notify all of your business parties regarding the change.

Similarly, if you want to add a business savings account onto your already existing business checking account within the same bank, you, again, can contact a representative at your bank to be able to do so. The exact process of updating your account within your current bank may differ depending on who you’re banking with; however, working directly with a bank representative will be the easiest way to get the change made quickly and smoothly.

Switching Business Bank Accounts: The Bottom Line

At the end of the day, there are many reasons as to why you might decide to change your business bank account. Regardless of the sign or reason, it’s up to you to determine how and when to transfer your account and to choose the new business bank account that will best meet your needs. With all of the constantly changing bank account options available to business owners, it’s worth evaluating your business’s financial services on a regular basis. This being said, if you do ultimately decide to transfer business bank accounts, you’ll want to work with your bank and set up a process to enable as seamless a transition as possible.

Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone. They haven’t been reviewed, approved, or otherwise endorsed by any of the companies mentioned above. Learn more about our editorial process and how we make money here.

Randa Kriss

Randa Kriss is a staff writer at Fundera, where she has written dozens of reviews on ecommerce, merchant services, payroll, and human resources solutions. She has a bachelor’s degree in English and Spanish from Iona College. Randa has previously written for the American Kennel Club, Planted, and Serendipity magazine.

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