You have your EIN.
You need to choose a bank.
You want the best option.
You need a comparison.
Online banks. Local banks. Features. Fees. Your decision.
This guide shows you how.
Bank comparison. Feature analysis. Fee evaluation. Your choice.
Read this. Compare options. Choose your bank.
Key Takeaways
- Online banks offer convenience and lower fees—24/7 access, mobile banking, and often lower monthly fees make online banks attractive for many businesses
- Local banks provide personal service and relationship building—face-to-face support, local connections, and personalized service are advantages of local banks
- Consider your business needs—transaction volume, cash deposits, in-person services, and relationship requirements determine the best choice
- Compare fees and features carefully—monthly fees, transaction limits, minimum balances, and service offerings vary significantly between banks
- You can use both—many businesses use online banks for daily operations and local banks for specialized services or cash deposits
Table of Contents
Why Comparison Matters
Comparison ensures the right choice.
What happens without comparison:
- Wrong bank for your needs
- Higher fees than necessary
- Missing features you need
- Poor service experience
What happens with comparison:
- Right bank for your needs
- Competitive fees
- All features you need
- Good service experience
The reality: Comparison saves money and improves service.
Online Banks
Understand online banks:
Online Bank Advantages
What online banks offer:
- 24/7 access from anywhere
- Lower monthly fees
- Higher interest rates
- Advanced mobile apps
- Easy account management
Why it matters: Convenience and cost savings.
Online Bank Disadvantages
What online banks lack:
- No physical branches
- Limited cash deposits
- No in-person support
- Limited relationship building
- Technology dependency
Why it matters: Limitations affect operations.
When Online Banks Work
What makes online banks ideal:
- Low cash transaction needs
- Tech-savvy business owners
- Remote or digital businesses
- Cost-conscious operations
- Simple banking needs
Why it matters: Fit determines success.
Pro tip: Consider online banks. Advantages, disadvantages, fit. See our EIN guide for bank selection.
Local Banks
Understand local banks:
Local Bank Advantages
What local banks offer:
- Face-to-face support
- Local relationship building
- Cash deposit capabilities
- Personalized service
- Community connections
Why it matters: Service and relationships.
Local Bank Disadvantages
What local banks lack:
- Higher monthly fees
- Limited hours
- Fewer digital features
- Geographic limitations
- Less competitive rates
Why it matters: Limitations affect costs.
When Local Banks Work
What makes local banks ideal:
- High cash transaction needs
- Relationship-focused businesses
- Local community involvement
- Complex banking needs
- Prefer in-person service
Why it matters: Fit determines success.
Pro tip: Consider local banks. Advantages, disadvantages, fit. See our EIN guide for bank selection.
Feature Comparison
Compare these features:
Access Features
What to compare:
- Online banking capabilities
- Mobile app features
- ATM access
- Branch availability
- Customer support hours
Why it matters: Access affects convenience.
Transaction Features
What to compare:
- Transaction limits
- Wire transfer options
- ACH capabilities
- Check processing
- Payment processing
Why it matters: Transactions affect operations.
Service Features
What to compare:
- Account types available
- Credit products
- Business services
- Integration capabilities
- Reporting features
Why it matters: Services affect functionality.
Pro tip: Compare all features. Access, transactions, services. See our bank checklist for questions.
Fee Comparison
Compare these fees:
Monthly Fees
What to compare:
- Monthly maintenance fees
- Fee waiver requirements
- Minimum balance requirements
- Transaction-based fees
Why it matters: Monthly fees affect costs.
Transaction Fees
What to compare:
- Per-transaction fees
- Wire transfer fees
- ACH fees
- Overdraft fees
- Foreign transaction fees
Why it matters: Transaction fees add up.
Additional Fees
What to compare:
- Account setup fees
- Check fees
- Statement fees
- Service fees
- Penalty fees
Why it matters: Additional fees increase costs.
Pro tip: Compare all fees. Monthly, transactions, additional. See our bank checklist for fee questions.
Decision Framework
Use this framework:
Assess Your Needs
What to assess:
- Cash transaction volume
- In-person service needs
- Technology preferences
- Relationship requirements
- Cost sensitivity
Why it matters: Needs determine choice.
Evaluate Options
What to evaluate:
- Feature comparison
- Fee comparison
- Service quality
- Reputation
- Convenience
Why it matters: Evaluation informs decision.
Make Your Choice
What to consider:
- Best fit for needs
- Competitive pricing
- Quality service
- Growth potential
- Flexibility
Why it matters: Right choice enables success.
Pro tip: Use decision framework. Assess needs, evaluate options, make choice. See our EIN guide for decision support.
Your Next Steps
Compare banks. Evaluate options. Choose your bank.
This Week:
- Review this comparison
- Assess your business needs
- Research bank options
- Compare features and fees
This Month:
- Choose your bank
- Complete account application
- Set up online banking
- Begin using your account
Going Forward:
- Monitor account performance
- Review fees regularly
- Consider additional services
- Adjust as needed
Need help? Check out our EIN application guide for getting your EIN quickly, our bank checklist for appointment preparation, our mistakes guide for avoiding errors, and our registered agent guide for business address setup.
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FAQs - Frequently Asked Questions About Banking Without the Headache: Comparing Online vs. Local Banks Once You Have an
What are the main advantages of online banks for business accounts?
Online banks offer 24/7 access from anywhere, lower monthly fees, higher interest rates, advanced mobile apps, and easy account management.
Learn More...
They're ideal for businesses with low cash transaction needs, tech-savvy owners, remote or digital operations, and cost-conscious operations.
However, online banks lack physical branches, have limited cash deposit options, offer no in-person support, and create technology dependency.
When should I choose a local bank over an online bank for my business?
Choose a local bank if you have high cash transaction needs, prefer face-to-face support, need local community connections, or have complex banking requirements.
Learn More...
Local banks offer personalized service, relationship building opportunities, cash deposit capabilities, and community connections that online banks can't match.
The trade-offs include higher monthly fees, limited hours, fewer digital features, geographic limitations, and less competitive interest rates.
Can I use both an online and local bank for my business?
Yes, many businesses use online banks for daily operations and lower fees while maintaining a local bank account for cash deposits and specialized services.
Learn More...
This dual approach gives you the convenience and cost savings of online banking combined with the in-person services and cash handling of a local bank.
Assess your specific needs for cash transaction volume, in-person service, technology preferences, and cost sensitivity to determine the right combination.
What fees should I compare between online and local business bank accounts?
Compare monthly maintenance fees, fee waiver requirements, minimum balance requirements, per-transaction fees, wire transfer fees, ACH fees, overdraft fees, and account setup fees.
Learn More...
Online banks typically have lower monthly fees and fewer minimum balance requirements, while local banks may charge higher maintenance fees but offer fee waivers based on balance.
Don't forget additional fees like check fees, statement fees, service fees, penalty fees, and foreign transaction fees—these can significantly impact total banking costs.
What banking features matter most for a new business with an EIN?
Focus on access features (online/mobile banking, ATM access), transaction features (limits, wire transfers, ACH), and service features (account types, credit products, integrations).
Learn More...
For new businesses, transaction limits and payment processing capabilities are critical—make sure your bank can handle your expected transaction volume.
Also evaluate integration capabilities with your accounting software, reporting features for financial tracking, and growth potential as your business expands.
What decision framework should I use to choose between online and local banks?
Assess your cash transaction volume, in-person service needs, technology preferences, relationship requirements, and cost sensitivity, then evaluate options against those needs.
Learn More...
Start by listing your specific needs, then compare features, fees, service quality, reputation, and convenience across multiple banks in each category.
Choose the option that best fits your needs at competitive pricing with quality service and room for growth—you can always switch later as your needs evolve.
Sources & Additional Information
This guide provides general information about comparing online vs. local banks for business accounts. Your specific situation may require different considerations.
For EIN application, see our EIN Application Guide.
For bank checklist, see our Bank Checklist Guide.
For common mistakes, see our Mistakes Guide.
For registered agent services, see our Registered Agent Guide.
Consult with professionals for advice specific to your situation.
