Best Small Business Bank Accounts in Canada With Low Fees

Top Small Business Bank Accounts in Canada With Low Fees

RBC Digital Choice Business Account

The RBC Digital Choice Business Account is designed for small business owners who prefer an efficient and cost-effective banking solution. It provides convenient online and mobile banking tools that allow you to manage transactions effortlessly.

The package comes with flexible features and requires no minimum balance. It also streamlines the bookkeeping and tax preparation processes. With this account, you can easily pay employees or vendors, receive payments, and file taxes efficiently.

The following are the benefits of opening an RBC Digital Choice Business Account:

• Proves the legitimacy of your business to your suppliers, vendors, and customers.
• Keeps your business transactions separate from your personal ones for better financial organization.
• Makes bookkeeping duties easier through efficient management and monitoring of your business expenses.
• Streamlines your tax filing by consolidating all your business transactions in a single place.
• Enables you to deduct account fees as a business expense for added savings.
• Comes with a mobile app that lets you easily track your business spending, check your financial position, and perform daily business tasks, such as balance checking, cheque depositing, or moving money.

Pros of the RBC Digital Choice Business Account:

• No minimum balance is required to open or maintain the account
• Low monthly fee of $6.00
• Includes 10 free outgoing Interac e-Transfers per month
• Unlimited electronic debit and credit transactions
• Unlimited electronic cheque deposits and Moneris deposits
• Access to RBC’s online and mobile banking tools

Cons:

• Fees for cash deposits and paper transactions
• Limited free Interac e-Transfers, with added fees when exceeding the monthly limit
• Not recommended for small business owners who need regular in-branch services

To open this business bank account, follow the steps below:

1. Start the application online. Completing the online application takes less than 15 minutes. Upon completion, you’ll automatically receive your business bank account number.
2. Visit a branch to verify your identity and documentation, and to activate your account.
3. Once activated, your account is all set up and ready to use.

Submit the required documentation to complete your application for an RBC Digital Choice Business Account.

• Sole proprietors operating under their own name are eligible to open this account.
• Provide one of the following government-issued IDs:
  • Canadian Passport
  • Canadian Driver’s Licence
  • Canadian Permanent Resident Card
• Submit a business registration document, such as:
  • Articles of Incorporation
  • Certificate of Existence
  • Master Business License

The following are the ways to bank using RBC Online Banking:

• Pay employees and vendors using this account.
• Request payment from clients.
• Pay your taxes online.

TD Basic Business Plan

Small business owners with minimal banking needs can benefit from a TD Basic Business Plan. This cost-effective, flexible account is designed to help business owners conduct business banking transactions seamlessly.

The TD Basic Business Account features a low monthly fee, anywhere banking, easy deposits, and free services such as online statements with cheque images. This plan is ideal for budding entrepreneurs and small businesses.

Pros:

• No minimum balance
• Low monthly fee of $5.00
• Free transactions and deposit items per month
• Access to TD’s online and mobile banking tools
• Free online statements

Cons:

• Limited number of free monthly transactions
• Additional fees for exceeding transaction of deposit limits
• No advanced features or benefits

Loop Global Banking Account

The Loop Global Banking Account is a cross-border banking solution designed for Canadian entrepreneurs and businesses. It enables clients to open local accounts in the US, UK, and EU and manage international transactions without currency conversions or cross-border wires.

Loop enables businesses to seamlessly manage money around the world so you can access new markets, drive business growth and simplify your business operations through its cross-border banking platform.

Pros:

• Provides seamless cross-border transactions through local account details in the US, UK, and EU
• Enables easy sending and receiving of payments in other countries
• No monthly fees for the basic plan
• Speeds up payment processing through international bank details
• Eliminates international payment fees and double currency conversions
• Helps businesses save up to 5% of revenue on fees
• Provides multi-currency credit cards for flexible spending

Cons:

• Does not have physical branches for in-person banking services
• May require additional time for some businesses to adapt to navigating digital banking
• Provides limited details about fee structures for services outside of the “no fees” category

Scotiabank Right Size Account

The Scotiabank Right Size Account for business is a budget-friendly banking product designed for businesses with minimal transactions. It’s a convenient and cost-effective solution for managing funds seamlessly through online access.

With reduced costs, entrepreneurs only pay for the transactions they make, which enhances their cash flow by eliminating deposit fees. It’s an excellent choice for cost-conscious business owners handling a limited number of transactions.

Pros:

• Monthly fee of $6.00
• No minimum balance
• Low monthly fee of $6.00, with a pay-per-transaction model
• Includes digital or in-branch banking

Cons:

• Fees on transactions
• Additional charges may apply for Digital Banking for business and ScotiaCard

BMO eBusiness Plan

The BMO eBusiness Plan is a cost-effective solution designed to help small businesses streamline financial management. It provides entrepreneurs a straightforward approach to manage their finances using tools tailored for efficient cash flow management.

The plan is particularly suited for businesses looking for convenience and cost efficiency. Features such as online access, ATM deposits, and electronic payments help simplify daily operations for business owners. Additionally, the plan comes with resources to support enhanced bookkeeping and payroll management.

Pros:

• No monthly account fee
• No required minimum balance
• Includes 2 free Interac e-Transfers per month
• Includes features like eStatements, ATM deposits, and online payment acceptance
• Fewer limits on electronic transactions

Cons:

• Not suited for businesses needing frequent in-person banking services
• Limited to businesses that engage more in electronic or online transactions

Float High Yield Accounts

The Float High Yield Account from Float Financial is Canada’s first high-yield account for businesses. It’s designed to grow funds with interest on CAD and USD balances. Businesses earn 4% interest on their business balance with rates up to 2.7x the Canadian banks.

This Float business account also helps entrepreneurs earn rewards for their business while automating and managing their company’s spending. Additionally, Float Financial, a FINTRAC-registered money services business, provides tools to automate, manage, and streamline financial management.

Pros:

• Offers 4% compound interest on CAD and USD balances
• No monthly fee for Essential plans
• Requires zero balance minimums
• Provides unrestricted access to funds without lockups or penalties
• Includes access to physical and virtual corporate cards in CAD and USD
• Comes with smart spending management software

Cons:

• Does not offer traditional banking services
• Limited to businesses that align with digital financial tools
• May not be suited to businesses preferring conventional banking services

CIBC Basic Business Operating Account

The CIBC Basic Business Operating Account is a low-fee operating account designed for businesses with basic banking needs and low transaction volumes. As CIBC’s most affordable business account, it keeps costs low with its pay-per-use structure.

The account simplifies financial management while offering convenient access anytime, anywhere through CIBC’s online banking platform and mobile banking app. Its straightforward features make the account an ideal choice for cost-conscious entrepreneurs.

Pros:

• Low monthly fee of $6.00
• Convenient banking through CIBC Online Banking and CIBC mobile banking app
• Seamless account management
• Free eStatements (if delivered through CIBC Online Banking or CIBC SmartBanking for Business)
• Pay-per-use transactions lowers the monthly fees
• Offers easy and convenient online account opening

Cons:

• No transactions included
• Not suited for businesses that need advanced banking solutions

Types of Business Bank Accounts

Canada offers various types of business bank accounts to meet the diverse needs of entrepreneurs and businesses. Choosing the right one is essential for managing finances effectively.

• Business Chequing Accounts. Business chequing accounts are used for daily transactions, including deposits, withdrawals, and payments. Features include online banking, cheque-writing capabilities, and debit cards.

• Business Savings Accounts. These accounts allow businesses to earn interest on surplus funds while ensuring easy access to their money. While they provide fewer transaction options compared to chequing accounts, they are an excellent choice for building savings to cover future expenses or emergencies.

• High-Yield Business Accounts. These accounts allow businesses to earn high interest on balances while maintaining access to their funds. They combine savings and operational features, and support occasional payments or transfers.

• Specialized Bank Accounts. Specialized bank accounts are designed to meet unique business needs. Among them are merchant accounts, which help businesses that rely on card-based transactions process credit and debit card payments.

• Online-Only Business Accounts. These are accounts managed entirely online, offering lower fees and enhanced digital tools. They are ideal for businesses operating remotely and entrepreneurs who prefer digital banking over traditional banking solutions.

How To Open a Business Account Online

If you’re launching a new business in Canada, one of the first steps to take is to open a business banking account. Not only does it help you manage your cash flow efficiently and build credit history, but it also establishes your business’s credibility.

To open a business account online, you must first pass the following eligibility requirements:

• At least 16 years old
• A Canadian resident or an individual who is in Canada to work or study
• Opening an account in your own name
• Approves paperless document delivery

You will also need to submit the following documents and information:

• Valid photo identification (driver’s license, passport, or a landed immigrant card)
• Address as it appears on your photo ID
• Date of birth
• Social insurance number

The following are the typical steps to opening a business account online:

1. Choose a bank or financial institution. Research and compare banks offering online business accounts with features and services your business needs. Most major banks, such as RBC, CIBC and BMO, offer this service, as well as fintech companies like Loop and Float Financial.
2. Prepare the required documents. Gather the essential documents, such as business registration certificates and your Canada Revenue Agency (CRA) business number, and prepare to submit them to your chosen bank.
3. Complete the online application form. Visit your bank’s website and navigate to the online application section for business accounts. Fill out the application form with all the necessary information.
4. Review and submit. Double-check the details you entered to ensure their accuracy. Once you have verified all the information, click the “Submit” button.
5. Set up online banking. Once your application is approved, activate your business account and set up online banking tools to start managing your finances.

Application processes may vary slightly between banks, so it’s recommended that you check the website of your preferred bank for the detailed requirements and instructions.

What Is Required to Open a Business Bank Account in Canada

Opening a business bank account in Canada requires that you submit the following:

• Business registration documents, depending on your business type:
  • Sole proprietorship – Business name registration
  • Partnership – Partnership agreement and business registration
  • Corporation – Articles of Incorporation and Certificate of Incorporation
• Business number (BN) from the CRA
  • If applicable, the BN is for tax purposes
• Business details
  • Information about your business, including the business name, address, and type of business structure
• Signing authority information
  • Names and details of individuals authorized to access and manage the account
• Identification for authorized signers
  • Government-issued photo ID (driver’s license, passport, or permanent resident card)
• Proof of Business Address
  • A utility bill, lease agreement, or an official document showing the physical location of the business
• Banking resolution (for Corporations)
  • A document providing details on who is authorized to operate the account on behalf of the company
• Additional requirements
  • Financial statements, business license, or trade name registration  (depending on the bank)

Pros and Cons of Business Bank Accounts