Your guide to the best small business accounts in Canada

Starting and running a small business in Canada is an exciting journey, but it also comes with its fair share of financial complexities. One of the first, and most crucial, steps is selecting the right business bank account.

Finding the "best" account isn't about a one-size-fits-all solution but the right fit for your unique business needs. This guide cuts through the noise, providing you with clear insights and data to make an informed decision. We’ll also introduce you to the Wise business account for all your international money transfers at the mid-market exchange rate.

Why does your choice of business bank account matter?

Choosing a business bank account isn't just a formality; it's a strategic decision. A well-chosen account can streamline your finances, save you money, and even support your growth. Studies show that small and medium-sized enterprises (SMEs) are the backbone of the Canadian economy¹², and efficient banking is essential for their success.

The hidden costs of the wrong account

The wrong account can drain your resources with excessive fees. Monthly fees can range from $6 at BMO¹ to considerably higher for premium accounts at other institutions like RBC⁸. Beyond monthly fees, per-transaction costs can quickly add up if you exceed your allotted free transactions. Scotiabank, for instance, offers tiered plans with a set number of transactions per month, with fees applying for each additional transaction².

Beyond the fees: features that matter

While cost is crucial, the best small business account in Canada offers more than just low fees. It’s the package that can make a big change in day to day actions:

• Online and Mobile Banking: 24/7 access to your accounts, transaction history, and the ability to make payments and transfers is essential for modern businesses.
• Integration with Accounting Software: Seamless integration with platforms like QuickBooks or Xero can save you valuable time and reduce the risk of errors⁹.
• Interac e-Transfer® Capabilities: Facilitating easy payments to suppliers and from customers is crucial in Canada³.
• Access to Business Support: Some banks offer dedicated business advisors or resources to help you navigate financial challenges.

What Canadian bank is best for small business?

Yes, the Big Five (RBC, TD, BMO, CIBC, and Scotiabank) dominate the Canadian banking landscape, each with its own set of business account options.

• RBC: Offers a range of accounts with varying features and fees, including digital choice options⁸.
• TD: Provides accounts tailored to different business sizes and needs, from basic to unlimited¹5.
• BMO: Known for its relatively low-fee entry-level accounts¹ and a variety of eBusiness plans¹⁷.
• CIBC: Offers accounts with the potential to waive monthly fees by maintaining a minimum balance⁶, typically ranging from $20,000 to $65,000.
• Scotiabank: Features tiered "Select Account for Business" plans, providing flexibility in transaction limits².

However, the "best" bank depends entirely on your specific circumstances. A high-volume e-commerce business will have different needs than a local consulting firm.

What is the best bank account for a small business?

Yes, several account types cater to diverse small business needs.

• Basic business chequing accounts: These typically have lower monthly fees but also lower transaction limits¹¹. Ideal for businesses with low transaction volumes.
• Unlimited transaction accounts: These come with higher monthly fees but allow for unlimited transactions without incurring extra charges². Suitable for businesses with frequent transactions.
• Specialized accounts: Some banks offer accounts tailored to specific industries or business types (e.g., non-profits, startups).

Which account type is best for small businesses?

Yes, the ideal account is determined by a combination of your business's transaction volume, cash flow patterns, and specific needs.

• Low transaction volume: A basic, low-fee account from a major bank or a digital bank might suffice¹.
• High transaction volume: An unlimited transaction account, even with a higher monthly fee, could be more cost-effective in the long run².
• International transactions: If you frequently deal with international payments, consider accounts with favorable exchange rates and lower international transaction fees.

Which business account is best for small businesses?

Yes, while traditional banks offer robust services, several alternative providers are gaining traction:

• Money Service Businesses (Fintechs): Companies like Wise, Vault and Airwallex often provide more competitive exchange rates and lower fees for international transactions.
• Credit Unions: These member-owned institutions may offer personalized service and competitive rates.

Get your Wise multi-currency business account in a few clicks

Opening a business account at Wise is free, online and easy! With Wise, you don’t lose money to monthly subscriptions or have it held up as minimum balance. You pay only for what you use. Here’s what you get for the essential and complete version for a one-time fee of 55 CAD:

You can always upgrade from the essential features to avail all Wise business features for a one-time payment of 55 CAD

Experience owning a Wise business account
with our demo >>>

It only takes a few minutes to set up your multi-currency account, and make the most of the mid-market exchange rate.

Step 1. Enter information relevant to yourself and your business.
Step 2. Share essential information about your business. This includes

• Business registration
• The business registered and trading addresses
• The industry you’re in
• Online presence
• Name, date of birth, country of residence - for all stakeholders
• Documents proving ownership of the business

Step 3. Enter essential information to verify your identity
Step 4. Set up and make a transfer as indicated on your account. Alternatively, you could pay the one-time fee and get account details in over 10 currencies.
Step 5. Wise sends you a confirmation email within 10 working days.

In case you add team members to the business account, they will need to be verified too.

Wise's has been reviewed and appreciated on public platforms such as:

• Trustpilot Canada: 4.3/5 stars with 256,776+ reviews
• Play Store Canada: 4.7/5 stars with 1.28M+ reviews

How FINTRAC impacts your business account

Canada's financial regulations, overseen by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada), require banks to monitor transactions and report suspicious activity⁷. This means understanding the "24-hour rule" is crucial. Large transactions or rapid sequences of transactions might trigger reporting requirements.

Making the right choice: key considerations

Before selecting an account, ask yourself these questions:

• What is my average monthly transaction volume (deposits, withdrawals, transfers)?
• Do I frequently make international payments?
• Do I need integration with accounting software?
• What is my budget for monthly banking fees?
• Do I need access to credit or financing options?
• Do I value in-person banking or prefer online convenience?

What documents do I need to open a business bank account?

Yes, you need some mandatory documentation. While specific requirements may vary slightly between banks, generally you'll need:

• Business registration documents: This could be your articles of incorporation, business license, or partnership agreement, depending on your business structure¹⁷.
• Government-Issued photo ID: For all owners and authorized signatories.
• Proof of address: For both the business and the individuals involved.
• Social Insurance Number (SIN): May be required for some account types or for interest-bearing accounts.

Wrapping Up

Choosing the best small business account in Canada requires careful consideration of your business's unique needs and a thorough comparison of available options. Don't be swayed solely by brand recognition or the lowest advertised fee. Look at the entire picture, including transaction limits, additional charges, and available features. By prioritizing transparency, understanding your transaction patterns, and comparing options meticulously, you can find a banking partner that supports your business's growth and helps you keep more of your hard-earned money. Remember that a well-chosen account is an investment in your business's financial health.

Sources:

1. Hart Accounting Services
2. Scotiabank Select Account for Business
3. Interac e-Transfer for Business
4. Remitbee Best Business Bank Accounts
5. CIBC Business Accounts
6. FINTRAC 24-Hour Rule
7. Airwallex Business Account Comparison
8. RBC Business Account Fees
9. QuickBooks Best Bank for Canadian Small Business
10. CW Bank Business Account Needs
11. Shopify Choosing a Bank
12. CBA Small and Medium-Sized Enterprises
13. Scotiabank Small Business
14. Spring Financial Best Bank and Accounts
15. TD Small Business Bank Accounts
16. Canada Small Business Financing Program
17. BMO Open a Business Bank Account