6 Best Banks for Canadian Small Businesses [Updated 2020]Written by Bernard on September 21, 2016
Let’s start off with a little Canuck humor! Did you hear about the maple syrup company that went out of business? …Those poor saps!
Jokes aside, as a small business owner one of the biggest rookie accounting mistakes you could ever make is to use your business account for personal purchases or vice versa. It’s just way too easy to mix up the two.
The good news is: loads of institutions promise the ideal bank account for Canadian small businesses and entrepreneurs. But with so many options available, pinpointing the best one becomes a difficult task indeed.
Before making your decision, you’ll also want to review things like introductory offers, interest rates, transaction fees and minimum account balance fees for each option.
So many considerations. And if you choose the wrong bank for your small business, you could end up paying way too much in fees and charges.
That’s why, to aid in your quest of separating business expenses from personal ones, today we’re looking at some of the top banks for Canadian small businesses.
Grouped according to traditional business, pay-as-you-go and savings accounts, we explore just what the cream of the crop options bring to the table.
Traditional Business Accounts
A traditional business bank account is an account that helps the business owner keep business transactions separate from personal finances. At its basic level, it’s similar to a personal bank account that’s used only for business income and expenditure.
However free business banking doesn’t really exist in the same way it does for personal bank accounts. To make sure you get a real bang for your buck, here are some of the strongest contenders when you consider opening a Canadian business bank account.
One of the consistently best traditional bank accounts providers is Bank of Montreal.Whether your business is big or small, just starting out or expanding at a rapid pace, they’ve got an account to suit your needs.
And the great news is you can switch plans at any time for free! They make it easy to facilitate your growth.
Business Builder 1
Business Builder 2
Business Builder 3
TD Bank prides itself for providing cost-effective solutions for conducting business banking in Canada. They offer 3 different plans A, B & C with fixed monthly fees to fit a variety of monthly transaction patterns.
In addition to being able to conveniently choose between CDN and USD plans, business owners are able to transact via in-branch, telephone, and internet banking. There are also 2,800 energy-renewable Green Machine ATMs available to use.
Here’s the fee breakdown for each plan option:
Every Day A
Every Day B
Every Day C
For those businesses that don’t do a lot of transactions per month, or not enough to maintain a good minimum balance, the pay-per-use or pay-as-you-go option is great.
This type of banking is ideal for businesses that have a very low or an irregular monthly transaction pattern and want to pay for only the transactions they make.
The Royal Bank of Canada offers this plan for those customers who need to bank in both electronic and branch channels. It’s great for starting small businesses with low to medium transaction volumes.
There are presently 800+ RBC branches and over 4200 RBC ATM locations throughout Canada. This means you’ll always have easy unlimited access to your money by paying a low monthly fee.
|Item Deposits||$0.75 per electronic deposit, $1.25 per paper transaction|
|Cash Deposits||$2.50 per $1,000 (branch), $2.25 per $1,000 (ATM)|
If you’re searching for a budget-friendly solution to help you manage your funds, this is the account for you. You only pay for the transactions you make. Plus cash flow can be heavily improved since there are no deposit fees on payment processing.
With 24/7 online access, over 1000 Scotiabank locations and nearly 3,600 ABMs spread out across Canada, convenient access is guaranteed.
|Monthly fee||$6 (4 included transactions)|
|Transactions per month||Cost per transaction|
Best Business Savings Accounts
When you’ve got some money coming in, it’s important to put that money somewhere. One of the most advisable moves is to put it into a savings account, where your money can earn on surplus funds while continuing to make money.
Canadian banks have some great options to help you save for future business goals, expansion plans, equipment and other key purchases.
Not to mention, having a high interest saving account can help build your credit profile and make it easier to access loans and business financing when needed.
In August 2012, ING Direct Canada was sold to Scotiabank, and in 2014 officially changed its name to the modern though light Tangerine. The name change was meant to highlight its new focus on simplicity and innovation.
It is now one of the best banks for Canadian small businesses helping businesses increase their cash at a prime interest rate. Tangerine’s regular Business Savings Account options is super flexible.
Designed to help reach your business goals faster, there’s even a Promotional Rate of 2.50% for the first five months.
|Minimum balance required||N/A|
|Interest rate||Up to 0.55%|
EQ Bank has been around since 1970. It’s burgeoning in the online space and offers great everyday interest rates. Plus there are no minimum balances or fees and all services like e-Transfers are free.
Business owners can also track their progress by using the Savings Goals tool designed to help you feel good about putting your hard-earned money aside.
|Minimum balance required||N/A|
So which are the best banks for Canadian small businesses?
Although the answer may seem as a cop-out, the best bank is a relative choice for small businesses depending on their situations. Your business size, your monthly transactions, and the amount of surplus money will all determine which bank account you should choose.
Nonetheless, there are all great accounts for your consideration. If you chose one or two out of these 6 best banks for Canadian small businesses, it would be hard to go wrong.
The best thing to do is to research further on the banks’ websites listed above, or to talk to a bank representative either by phone or an in-person consultation.
Avoid becoming a poor sap at all costs!
And if world domination just so happens to be your thing, we also have carefully curated guides for choosing the right SMB bank accounts in the United States, United Kingdom and South Africa. Be sure to check them out in the event your operations start to expand outward.