Best Canadian Business Bank Accounts, Credit Cards & More
- ReInvestWealth
- Dec 20, 2024
- 11 min read
Updated: Mar 21
As a small business owner, you’ve probably asked yourself at least one of the following questions:
Why do I need a business bank account? Can’t I just use my personal bank account?
What's the best business credit card out there?
Why are the fees so high for business banking?
While choosing a bank for your operations can be complicated, it will become much easier after understanding the basics of small business banking. We've created this guide for all you entrepreneurs out there who prefer to bank online, specially when it comes to your business.
NOTE: This article does not contain affiliate links. We made this guide because some banks still don't integrate with financial software making it a pain to do accounting. We tested all the main Canadian financial institutions and here are the best small business bank accounts and business credit cards in Canada.
Table of Contents
Online Banking
Checking Accounts
Credit Cards
Lines of Credit
Accounting for Business
Why Do I Need a Business Bank Account?
A small business bank account is very similar to a personal bank account. They allow you to purchase goods and services, pay bills and save for future investments or emergencies.
However, there are some notable differences. The main advantage of using dedicated business bank accounts is to clearly separate personal and business transactions. This not only helps during the tax season but ensures good accounting practices in case of an audit.
Another important difference is that business accounts are usually geared towards making larger transactions compared to personal accounts. Imagine paying employees. You won’t want to send e-transfers to each employee and manually prepare their pay slip. You will want to use payroll software which will have to be connected to a valid business account.
Online Banking For Your Business
It’s a strange time for online banking. Personal accounts are seeing major improvements thanks to fully digital options such as Tangerine and Neo. But business banking has been a step behind.
Let's face it, most of the current business banking plans are stuck in the past. High monthly fees for sending/receiving checks, for wiring payments and for depositing cash into your account; things most of us no longer do!
Many business accounts also charge for individual transactions, including e-transfers. There are very few options for free business banking because the vast majority of business bank accounts are geared towards old-fashioned cash/check/wire companies built before the digital age. And yes, those companies still exist.
But times are changing and we created this guide to help modern business owners take advantage of online banking.
If you are operating a business that accepts digital payments, such as through a POS terminal or through online invoicing; this guide is for you. If you are looking to operate your business mostly through cash and checks, you may want to consider options other than what we suggest here.
Best Business Checking Accounts In Canada
Checking accounts are at the heart of any business and a debit card is a must to manage cash.
We tested different options from TD, RBC, CIBC, BMO, Scotiabank, NBC, Desjardins and other financial institutions to find the best business checking account.
The lack of accounts designed for online banking is shocking, but we still managed to find 3 great checking accounts for the digital age.
BMO eBusiness Plan
If you’re a new entrepreneur or a small business owner who banks digitally and is looking to pay bills online, use e-transfers and have unlimited electronic transactions, BMO’s eBusiness Plan is the best option for you. The best part is that there are no monthly fees. If you're just starting off or looking to grow your business using free resources, the BMO eBusiness plan is one of the best options.
Things to keep in mind are daily limits of up to $10,000 for e-transfers and additional fees for cash withdrawals/deposits or other non-electronic transactions such as depositing checks at the ATM.
You also get unlimited Moneris transactions for your payment processing needs (keep in mind you will still pay Moneris processing fees). We also recommend using Square for the most simple POS solution or Stripe as the most scalable option.
BMO advertises this account as “the most popular way to manage online business banking.” The great part is that if you require non-digital services in the future, you can always upgrade your account with BMO.
Pros
No fee business account
Free tax filing service
2 free e-transfers per month
Unlimited electronic transactions
Cons
Limited e-transfer limit
Fee for all non-electronic transactions
You can only apply for the account in person at a branch
Wise Business Account
The Wise Business Account is an excellent low-cost digital account that allows businesses to send, receive, and hold money in over 50 currencies. It also offers a free debit card that can be used to make purchases and withdraw cash at an ATM.
Things to keep in mind are that Wise is online only and designed for tech-savvy business owners. The fee structure is a bit complex but significantly cheaper than most traditional banks, especially if your business has international transactions.
Generally speaking, Wise is free for receiving and holding funds. It's also free to spend money using the prepaid debit card when making in-store and online payments. They mainly charge small fees for sending money (like e-transfers and wires) and for converting between currencies. You can access their pricing page for additional details.
Wise is designed to easily support a business that has to deal with multiple currencies. It also happens to work great even if your business only deals in Canada. The main downsides we see with wise is that traditional bill payments are not yet possible (unless you provide your direct deposit information for automatic bill payments) and any outgoing transactions not using the debit card (think e-transfers) always have a small fee.
Pros
Very easy to open a bank account
Low fees for international transactions
Competitive exchange rates
Great option for digital nomads
No minimum balance required
Comes with a free Visa debit card
Cons
Can't perform traditional bill payments
Sending money always incurs small fees
No physical branches
Online only customer support
RBC Digital Choice Business Account
Another good option is RBC’s Digital Choice Business Account. RBC advertises this bank account to small business owners who do most of their banking online or via phone. This bank account is very similar to BMO’s eBusiness plan, however there are a few drawbacks placing this option lower on the list.
Unlike BMO, this plan does have a fee of $6 per month.
You get up to a $15,000 daily limit for e-transfers but you only receive 10 free e-transfers per month. There are also additional fees for cash withdrawals/deposits or other non-electronic transactions such as depositing checks at the ATM.
Just like with BMO, you get unlimited Moneris transactions for your payment processing needs (keep in mind you will still pay Moneris processing fees). Again, we recommend using Square for the most simple POS solution or Stripe as the most scalable option.
Pros
Only $6 per month
10 free e-transfers per month
Unlimited electronic transactions
Unlimited mobile & ATM cheque deposits
You can apply for the account online
Cons
Tax filing service has a one time fee of $25 and $2 per filing
Additional e-transfers cost $1.5 per month
Limited e-transfer limit
Fee for all non-electronic transactions
Best Premium Business Credit Cards In Canada
Getting a premium card can be a wise decision if your business spends more than a few thousand dollars a month on a credit card because you get the best rewards, benefits, insurance and protection. Premium cards do have an annual fee but the cards generally pay for themselves if your monthly spend is significant. Here are the top 3 best premium business credit cards in Canada.
American Express Business Platinum Card
If you're looking for the card with the most benefits and rewards, look no further than the American Express Business Platinum Card. This credit card is the most expensive on the list but is fully loaded with benefits. This card is a no brainer if your credit card spend is above $7,000 per month.
Pros
AMEX rewards.
No pre-set spending limit
Up to 55 interest-free days on purchases.
No specific checking account required.
Unlimited airport lounge access for you and 1 guest.
Medical coverage during the first 15 consecutive days of your trip while travelling outside the province or country.
Included travel protection (car rental collision damage waiver, trip cancellation / trip interruption, baggage delay, and more.)
90-day purchase protection and extended warranty protection of up to one additional year on items you charge to the card.
Protection against employee card abuse.
Cons
Annual fee of $799 per year.
No mobile device insurance.
AMEX is not accepted in all stores, such as at Costco. Amex has the 3rd largest network after Visa & Mastercard and will work in most places around the world but you will face merchants that simply do not accept American Express.
Rewards
1.25 AMEX points for every $1 in card purchases.
120,000 welcome points when you spend $15,000 in the first 3 months.
BMO World Elite Business Mastercard
The best overall business card right now is the BMO World Elite Business Mastercard. This card is especially great if your credit card spend is above $3,000 per month.
Pros
BMO rewards points.
Lower interest rate than average.
Protection against employee card abuse.
2 free airport lounge passes a year.
Included travel protection (car rental collision damage waiver, trip cancellation / trip interruption, baggage delay, and more.)
Emergency medical insurance for trips up to 15 days out of Province / Country.
90-day purchase protection and extended warranty protection of up to one additional year on items you charge to the card.
Cons
Annual fee of $149 per year. (waved in first year)
BMO checking account required.
No mobile device insurance.
Rewards
4 points for every $1 you spend on gas, office supplies, phone/internet bill payments.
1.5 points for every $1 you spend on all other card purchases.
50,000 welcome points when you spend $5,000 in the first 3 months
20,000 bonus points when you spend $35,000 in the first 12 months.
RBC Avion Visa Infinite Business
Another good choice is the RBC Avion Visa Infinite Business card. This option is especially great if your credit card spend is more $3,000 but less $6,000 per month.
Pros
RBC avion rewards.
Medical coverage during the first 15 consecutive days of your trip while travelling outside the province or country.
Included travel protection (car rental collision damage waiver, trip cancellation / trip interruption, baggage delay, and more.)
Mobile device insurance.
90-day purchase protection and extended warranty protection of up to one additional year on items you charge to the card.
Cons
Annual fee of $175 per year.
RBC checking account required.
$32 USD per person for airport lounge access.
No rewards after spending more than $75,000 in a year.
Rewards
1.25 avion points for every $1 spent, on up to $75,000 per year.
35,000 welcome points upon enrollment.
Best Free Business Credit Cards in Canada
You don’t have to pay for a good credit card! There are many great options available for getting cash-back or reward points without spending a dollar on annual fees. Here are the 3 best free business credit cards available in Canada.
RBC Business Cash Back Mastercard
One of the best options for a free business credit card is the RBC Business Cash Back Mastercard, especially if you also have the RBC Digital Choice Business account. This credit card has no annual fee and 1% cash back on all your purchases.
Pros
No annual fee.
Cash back rewards.
Best free card for RBC Digital Choice Business Account.
Mastercard is accepted everywhere including Costco.
Cons
RBC is generally stringent on credit limits and credit approval. You will likely receive a lower credit limit compared to other choices in this list.
RBC checking account required.
Rewards
Earn 2% cash back on purchases made on your card in the first 3 months.
Earn 1% cash back on purchases made on your card after 3 months.
BMO CashBack Business Mastercard
Another great option is the BMO CashBack Business Mastercard. You also get cash back on all your purchases, plus you pay no annual fee. This card is a good option if you decide to go with a BMO eBusiness plan.
Pros
No annual fee.
Cash back rewards.
Best free card for BMO eBusiness Plan.
Mastercard is accepted everywhere including Costco.
Cons
BMO checking account required.
Rewards
10% on gas, office supplies, phone/internet bill payments in the first 3 months.
1.75% when you pay at the pump or shop in-store at Shell.
1.5% on gas, office supplies, phone/internet bill payments.
0.75% on all other card purchases.
Best Business Lines of Credit In Canada
A business line of credit is a non-dilutive financing option that allows a business to borrow money up to a pre-determined limit as needed. The main benefit of a business line of credit is that it provides a source of liquidity which a business can use as needed. This is in comparison to a loan which requires you to borrow a fixed amount all at once and make fixed monthly payments.
BMO Credit Line For Business
The BMO Credit Line for Business is essentially a line of credit that comes with a card you can use to make purchases. Based on our research, this BMO product is the easiest and fastest way to obtain a line of credit for a Canadian business. BMO's instant approval process is very quick and perfect for businesses that need financing right away. It is also recommended to open the BMO Credit Line at the same time as opening the BMO eBusiness checking account as the application process is greatly simplified this way. If you open the Credit Line after the eBusiness account, you may be asked for additional information which will slow down the process.
Pros
No annual fee.
Instant approval process
Lenient approval process
Comes with a Mastercard
Competitive Interest Rate
Cons
Primary checking account must be with BMO
Interest accrues right away unlike a traditional credit card
No rewards
Rewards
None
RBC Visa CreditLine for Small Business
Similar to BMO, the RBC Visa Credit Line gives you the functionality of a line of credit combined with the convenience of a credit card. Typical with RBC, this product is more difficult to obtain because of RBC's strict verification and approval process. The RBC Visa Credit Line is usually offered only 12 months after being an RBC client.
Pros
No annual fee.
Comes with a Visa card
Competitive Interest Rate
Cons
Primary checking account must be with RBC
Stringent approval process
Interest accrues right away unlike a traditional credit card
Visa is not accepted at Costco.
Rewards
1 Avion point for every $2 spent in net purchases.
Online Banking and Accounting Software Integration
It’s necessary to understand your business financials in order to find the most suitable business bank account and credit cards. Accounting software is key in understanding your business's financial situation and making smart choices.
One of the most critical factors to consider is whether your business bank supports integration with accounting software like ReInvestWealth. Seamless integration with accounting software saves time and reduces errors by automatically syncing your transactions. If your bank doesn’t offer this capability, you’ll be forced to handle bookkeeping manually, which can be time-consuming, error-prone, and take your focus away from growing your business.
All the bank accounts and credit cards listed in this guide have been tested with ReInvestWealth's accounting software. In just a few clicks, you can easily connect your banking information and simplify your tax filings.
How ReInvestWealth Helps Canadian Business Owners with Accounting
Commonly known as “the language of business," accounting serves as the method of communication that is used to comprehend financial data and pass on key information to directors, investors, partners, clients and beyond.
The need for automation to increase efficiency in accounting and decrease the potential for manual time-consuming errors is greater than ever. Startups and businesses in Canada seeking smart accounting tools can signup for ReInvestWealth's accounting software to help simplify and automate traditional accounting processes.
Disclaimer
The content of this blog post is for informational purposes only and does not constitute accounting, tax, business, or legal advice. While ReInvestWealth offers professional accounting and tax advice through paid consultations with a CPA, the information provided here is general in nature and may not be applicable to your specific circumstances.
