Capital One Business Checking Review [Basic vs Unlimited]

I banked with Capital One for many years—ever since Capital One purchased ING Direct. Though I have generally been very pleased with their ease of use and excellent customer service, I still only have those same personal savings accounts and checking accounts with Capital One that I started with many years ago.

With my long history with Capital One, I decided to see how their business accounts stack up against my experience with personal banking.

What I discovered is that more and more, the Capital One Business Checking Account (formerly Capital One Spark Business Checking) is becoming just like the other big bank business checking accounts. Not good.

Here’s what you need to know about Capital One’s business checking:

Capital One Business Checking Account Features

As with its other banking products, Capital One used to leverage the fact that it is an Internet-based banking institution. This created low-fee structures for its Business Checking accounts. Not anymore.

Basic Checking has a $15 monthly fee, and Unlimited Checking has a $35 fee.

However, the account provides several features fee-free, which makes it a decent checking account for anyone starting a new business or who needs to run a lean operation.

The specific fee-free features you can count on include:

• Unlimited free transactions
• No minimum balance (provided you otherwise maintain at least $2,000 in the account over a 30- to 90-day period or if you carry two additional business products from Capital One)
• No ATM fee at more than 39,000 Allpoint ATMs nationwide
• No cash deposit fee for up to $5,000 in deposits per month
• Free debit card
• Free electronic invoicing and bill pay
• Money management, including remote check deposit, with the mobile business app
• Earn among the highest interest in the nation for business accounts. (Rates vary, so check Capital One’s site for the current rate)

While the account does offer a great deal for no fees–which already puts it above any number of business checking accounts that charge fees left and right–it is essential to know the fine print when it comes to any potential fees you might face.

Capital One Business Checking Fees

While there is no official minimum balance, if you let your account balance drop below $2,000 over a 30- to 90-day period and do not have two additional business products, you can expect to pay a $15 monthly service fee. Same for the Unlimited checking with its $35 monthly fee.

This means there is a de facto minimum balance of $2,000, although that minimum is relatively low, and it is pretty easy to avoid the fee.

In addition, small businesses that deal with a lot of cash may hit the cash deposit fee for depositing more than $5,000 in cash per month. That fee is $1 for every $1,000 over $5,000.

For many businesses, this will be a non-issue, but any business that deals primarily in cash may find the dollar-per-$1,000 deposit over $5k to be onerous.

Finally, there are fees for wiring money. Incoming wires have a fee of $15, outgoing domestic wires have a fee of $25, and outgoing foreign wires have a $40 fee.

What Works Well for Business Owners

Between the Business mobile app, the 39,000 Allpoint ATMs, and the more than 700 brick-and-mortar Capital One branches, the Business Checking account offers great flexibility and convenience.

You can make check deposits from your phone or tablet with the mobile app, deposit money at an ATM or branch, or even mail a check to a branch for deposit.

The well-designed website also makes it easy and seamless to handle your banking online if you cannot make it into a branch office.

Until I wrote this review, I had no idea Capital One maintained any physical branches. I have never had a transaction or problem that could not be handled on their excellent website or over the phone with their helpful customer service team.

In addition, Capital One does a great job of integrating with independent accounting software. Between that and the free electronic invoicing and bill pay, you can easily track bills and business expenditures and reconcile your accounts every month.

In addition to branches, Capital One offers its cafes in cities across the U.S.

Potential Downsides of Capital One Business Checking

Though the Business Checking account is an okay choice for most small business owners, the fact that free cash deposits are limited to $5,000 could be limiting for certain types of businesses.

Also, though it should be relatively easy to avoid paying the $15 monthly service fee that is triggered if your balance dips below $2,000 for 30 days, I would personally prefer it if Capital One said there was a minimum balance of $2,000 but also stated there were easy ways to avoid the minimum balance fee.

Saying there is no minimum balance while having a de facto minimum of $2,000 seems a little disingenuous.

However, the numerous benefits offered by this account may outweigh any potential downsides for you.

How to Open a Capital One Business Checking Account

To open a business checking account with Capital One, you must have some business entity in one of the following categories:

• Sole Proprietorships
• Partnerships
• Limited Liability Companies (LLCs)
• Corporations
• Not-for-profits and small organizations

If you meet these criteria, you can open an account online or in person at one of the Capital One branches.

The bank often offers intro bonus promotions, such as a higher introductory interest rate for a year. These promotions are updated frequently, so be sure to ask what kinds of promotions you can take advantage of when you sign up.

The Bottom Line on Capital One Business Checking

Over the years, Capital One has proven itself to be a solid online option for personal banking, but it’s slipping into mediocrity with its business product offerings.

But if you need a business checking account that integrates seamlessly with your accounting software, offers convenient technology and excellent customer service, and provides unlimited transactions and fee-free invoicing and bill pay should look further into Capital One Business Checking.

Ultimately I would suggest looking for a free online business checking account.