The 16 best startup banks and banking platforms for high-growth companies in 2024
A review of the best banks for startups – and banking platforms.
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1 minute
September 17, 2024
Choosing a banking platform as a startup founder is a highly consequential decision.
Pick the right one, and you’ll reap the benefits of something you, ideally, won’t ever have to think about. Expense management can reliably be put on autopilot, spending can be kept in check, and you’ll have all the controls you’ll need as you scale.
Opt for the wrong one, and you’ll grow frustrated, risk erroneous spending, and lack the visibility you need early on and as you grow your team.
To help you make the best decision for your business, we’ve pulled together a list of the most popular startup banking platforms on the market today.
Key highlights:
Eliminate annoying banking fees, earn yield on your cash, and operate more efficiently with Rho.
Based in New York, Rho is a business banking platform that helps companies manage all spend and cash, from idea to IPO.
One benefit of Rho is its business banking platform services. You can manage your operating cash, enjoy 24/7 customer support, zero ACH fees, and connect to your accounting software.
Startups and SMBs use Rho to boost their bottom line and operate more efficiently. Rho is a powerful business banking platform backed by an award-winning customer support.
Rho is a great choice for startups that need a single integrated platform for business checking accounts, corporate cards, and AP automation. Startups use Rho to automate busy work, speed up accounting, and control spending — without platform fees.
Qualifying clients earn up to 2.75% APY on Rho Business Savings Accounts. Treasury Management services are provided by American Deposit Management, LLC.
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Rho does not offer cash deposits.
None
None for business banking
Webster Bank, N.A., Member FDIC (checking and credit cards), and American Deposit Management, LLC. (savings).
Rho integrates with QuickBooks Online, Oracle NetSuite, Microsoft Dynamics 365 Business Central, Sage Intacct, Puzzle, and Campfire as well a 50+ HRIS integrations. Rho also supports flat-file CSV exporting, so you can automatically tailor transaction categorization to your business needs.
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Bluevine provides business banking products, loans, and credit cards to businesses.
Bluevine offers a low-cost banking option and the ability to earn an APY rate on larger balances. Customers can make cash deposits for a fee.
Small business owners with minimal banking needs can benefit from Bluevine’s inexpensive banking platform.
Businesses can earn 2.0% APY on balances up to $250,000 by reaching one of two monthly activity goals as of this article’s publishing date.
Customers must spend at least $500 monthly on a Bluevine debit or credit card to reach the goal. The other option is to receive $2,500 or more in customer payments in the bank account.
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None
Bluevine customers pay fees for cash deposits. Bluevine works with third-party firms and allows customers to deposit cash at 1,500+ ATMs and 91,000+ retail locations using the Bluevine debit card. Bluevine charges fees for cash deposits, and there are limits on the dollar amounts deposited.
No overdraft fees
None
Deposits are insured through Coastal Community Bank, Member FDIC.
QuickBooks Online and QuickBooks Desktop
Bluevine offers a low-cost business checking account and attractive APY rates. Still, growing startups may quickly find the platform lacks certain capabilities, such as expense management and AP automation. Rho customers can access corporate credit cards with spend controls, automated expense management and accounts payable, business banking, and treasury management—all without platform fees.
Wells Fargo is one of the largest U.S. banks, offering banking services, lending, investments and wealth management, and investment banking.
Wells Fargo provides many banking services that startups may eventually need, such as SBA loans and merchant accounts. However, the bank may charge higher fees on average due to an expensive legacy infrastructure of physical locations and other assets.
The bank’s checking account options include Initiate Business Checking, Navigate Business Checking, and Optimize Business Checking. The accounts differ based on the services provided to the customer.
Startup businesses that can generate enough activity to avoid monthly service fees may be a fit for Wells Fargo. Wells Fargo can be an option if a startup founder is interested in the bank’s lending or investment services.
Navigate Business Checking pays an APY that varies based on account size. Other checking accounts do not pay an APY rate on balances.
$10 to $75 monthly fee, depending on the type of account. The fee may be waived based on the minimum daily balance and other account activity.
$25
Cash deposits are free for some checking accounts up to a specific monthly amount. Fees are charged above the dollar limit, and the Optimize Business Checking account charges fees on all deposits.
$35
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The deposit was insured by Wells Fargo Bank, N.A., and is a Member FDIC.
Xero and QuickBooks. However, Wells Fargo uses Web Connect to integrate with QuickBooks. This extra step slows down the integration process.
Several financial institutions offer non-accounting third-party integrations, including PayPal and Stripe.
Wells Fargo offers several banking services, but the platform can be very expensive. A startup may quickly exceed the bank’s caps on free business transactions and have to start paying fees.
Rho provides a single platform with fully integrated business checking accounts, corporate cards, AP automation, and treasury services, with no platform fees. As a legacy bank, Wells Fargo does not offer the seamless integrations Rho provides.
Bank of America offers several services for startups, including checking and savings, credit cards, bill pay, lenders specializing in startups, and investing tools.
The two primary business accounts are Bank of America Business Advantage Fundamentals Banking and Business Advantage Relationship Banking. Electronic transactions are free, and each account has a higher limit for cash deposits than many competitors.
Startups that want a national bank with various services and businesses that can meet requirements to minimize fees are a good fit for Bank of America.
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$16 for Advantage Fundamentals Banking and $29.95 for Advantage Relationship Banking. The fee may be waived based on the average monthly account balance or by spending a specific dollar amount on qualifying purchases.
$100
Cash deposit allowances of up to $7,500 for the Advantage Fundamentals and up to $20,000 for the Advantage Relationship account.
$10
Business banking customers can earn extra rewards on the bank’s business credit cards and discounted rates on business loans through the bank.
Deposits insured by Bank of America, N.A., member FDIC.
QuickBooks
Bank of America offers more robust automation than other legacy banks, but monthly and other transaction fees can quickly add up. Rho does not charge platform fees and offers a fully integrated financial services platform that is more user-friendly for startup firms.
Chase for Business offers bank accounts, small business loans, business credit cards, and other services.
JP Morgan Chase offers a wide range of financial services, but startups must be able to avoid fees, which can quickly add up. Customers can access more than 15,000 ATMs and more than 4,700 Chase branches.
Like Bank of America, startups that want a national bank with various services and businesses that can meet requirements to minimize fees are a good fit for JP Morgan Chase.
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Chase checking accounts charge monthly maintenance fees, and the fees decline for customers who carry larger balances. Service fees range from $15 to $95 each month.
$2,000
The first $20,000 in cash deposits during the month are free. Amounts above $20,000 are charged a fee.
$34 fee when the account is overdrawn by more than $50.
Bonuses are available based on a number of factors. The bonuses promoted change over time.
JP Morgan Chase Bank, N.A., Member FDIC
QuickBooks Online
JP Morgan fees can accumulate quickly. Startups may incur monthly account fees, transaction fees, and cash deposit fees, among others. Rho does not charge platform fees and provides an integrated financial platform.
Mercury is a financial technology company that provides business banking services to VC-backed startups. The company offers Mercury business checking and savings accounts, corporate credit cards, treasury services, and venture debt.
Mercury is a go-to starting banking solution for many VC-backed startups.
Customers with more than $250,000 in deposits who want a sweep account to increase FDIC insurance coverage may fit Mercury. Mercury is also a consideration for businesses that want access to venture funding.
However, as entrepreneurs scale, they may need additional capabilities like multi-entity support, AP automation, and other important features of financial operations.
None
No monthly fees
No account minimums,
Mercury does not support cash deposits.
No overdraft fees
None
Choice Financial Group and Evolve Bank & Trust, Members FDIC.
Mercury provides some limited integrations with QuickBooks and Xero and offers “NetSuite-friendly reports” – CSV exports of transactions for reconciliation purposes.
Mercury is great for startup businesses that are just starting and want access to business banking services built into a technology platform with a good user experience.
As startups scale, more streamlined approvals, a robust expense management solution, and structured workflows become necessary. This is where Rho shines - providing a comprehensive stack of financial tools that allow unimpeded growth without team members needing platform changes.
Visit G2 to learn how Rho’s fee-free business banking and finance platform, business credit cards, and more compare with different startup solutions, including:
Following an initial launch as a virtual reality company, Brex pivoted to become a corporate card provider (powered by Mastercard), challenging American Express. Since then, Brex has added more capabilities like cash management, travel booking, and AP.
Brex may be an option for startup founders who want an inexpensive business checking account and don’t need to make a large number of cash deposits. Brex also provides corporate cards and expense management services.
Brex primarily caters to VC-backed startups, so Brex likely isn’t an excellent option for traditional business owners. In 2022, Brex decided to end support for traditional small businesses that aren’t venture-backed.
A Brex account also generally requires its customers to maintain a cash balance of at least $25,000 to maintain any credit limit.
The business banking account does not pay an APY, but customers can invest in money market funds through Brex.
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None. Brex does not offer a debit card or ATM access.
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Bonus available based on minimum deposit requirements or Brex card spending requirements.
Brex’s business banking services are backed by Emigrant Bank and Fifth Third Bank, NA, both FDIC members.
NetSuite and QuickBooks
While Brex is a popular option among startups, particularly for VC-backed startups, thanks to its appealing perks and benefits, its usefulness tends to taper off as businesses grow.
As startups start to scale, more streamlined approvals, robust expense management, and structured workflows become necessary. Rho is a more advantageous solution for startups than Brex, and Rho does not charge platform fees.
Axos Bank is a full-service online bank that offers business banking products. The company offers checking and savings accounts, CDs, merchant services, treasury, and commercial loans.
Axos is a bank, not a technology company. Axos offers two types of business accounts. Business Interest Checking pays an APY on deposits and charges a monthly fee. Basic Business Checking has no fees and does not pay interest on deposits.
Startups that process a large amount of cash transactions may be fit for Axos. The bank does a better job at facilitating cash deposits than many competitors.
Business Interest Checking pays up to a 1.01% APY on deposits. Basic Business Checking does not pay an APY rate.
Axos Basic Business Checking is free. Business Interest Checking has a $10 monthly fee that is waived if you maintain an average daily balance of at least $5,000.
No minimum opening deposit on the Basic Business Checking account. $100 minimum opening on the Business Interest Checking account.
Cash deposits are available via MoneyPass and AllPoint ATMs, and ATM fees are refunded automatically.
$25
$400 bonus when you open a new Axos business account and maintain an average daily balance of at least $50,000.
Axos Bank, Member FDIC.
QuickBooks. Note that Axos does not offer any other third-party integrations with invoicing software providers or online payment platforms.
Startups that process a large dollar amount of cash transactions may find Axos to be useful. With proper planning, startup founders can minimize costs using Axos. Axos does not provide integrations with third-party software platforms other than QuickBooks.
Rho provides a full suite of banking and financial solutions, without the need to add third-party software providers. Rho does not charge platform fees, and provides a seamless user experience.
US Bank is the fifth largest bank in the U.S., and offers banking, wealth management, and commercial loan services.
US Bank provides the Silver Business Checking account for startups and small businesses. There are no monthly fees for the account. US Bank accepts cash deposits.
You can open the account online, making it a great option for business owners who want the convenience of an online business checking account but the customer support of a traditional bank.
Startups that can meet the requirements to earn the welcome bonus can benefit from a US Bank account. Businesses with a limited number of monthly transactions can avoid transaction fees. US Bank may also be a fit for startups that process a small amount of cash deposits.
None
None
$100
Up to $2,500 in free cash deposits per month
No fees if the account is overdrawn by $50 or less. Customers pay a $36 overdraft fee for larger overdraft dollar amounts.
Earn up to a $800 bonus when you open a new, eligible U.S. Bank business checking account online and complete qualifying activities.
U.S. Bank National Association, Member FDIC.
QuickBooks Online
The Silver Business Checking account does not charge a monthly fee, and startup founders with a small number of monthly transactions can avoid processing fees. Startups that grow quickly will incur transaction fees with US Bank.
Rho offers a fully integrated platform to manage business checking accounts, corporate cards, and AP automation. Rho also provides ERP integrations with several accounting software providers, and Rho does not charge platform fees.
Grasshopper provides banking products to small businesses and startups, including VC-backed startups. The business also offers lending services.
Grasshopper has a very specific focus on VC-based startups, and businesses can earn a competitive APY on deposits. Grasshopper business checking accounts can be low-cost if managed properly.
Grasshopper’s business checking account, Accelerator Checking, is available to venture-backed startups with Seed and Series A funding, with some restrictions by industry.
Businesses can earn up to 1.51% APY on a balance of up to $25,000. Customers with balances of $25,000 to $250,000 can earn a 2.25% APY.
No monthly fees
$100
Cash deposits are not available
None
Businesses can earn APY rates on checking accounts that are much higher than rates offered by most FDIC-insured banks.
Balances are insured up to $250,000 by Grasshopper Bank, an FDIC member.
QuickBooks Online and QuickBooks Desktop
Grasshopper provides business banking, loans, and other services that focus on the startup market. As businesses grow and become more complex, startup founders need additional tools to manage AP automation, accounting and spend. Rho’s integration platform offers these services.
LiveOak Bank offers checking and savings accounts, CDs, and several types of business loans. LiveOak provides three different types of business checking accounts:
Includes a $10 monthly fee, and the fee is waived with a minimum $1,000 average daily balance. Charges a $25 overdraft fee.
Ideal for businesses requiring ACH, online wire services or more robust features. Includes a $25 monthly fee, and the fee is waived with a minimum $25,000 average daily balance. Charges a $25 overdraft fee.
Ideal for businesses with high daily balances in need of statement aggregation and broader capabilities. Includes a $100 monthly fee, and earnings credit can offset fees. Customers must contact a salesperson for information on avoiding the $100 monthly fee. No overdraft fees.
LiveOak offers several types of bank accounts, which gives the startup founder a choice based on company needs. Businesses can also earn a high APY rate on savings account balances.
Startups that need a low-cost checking account and startups that can invest excess cash in LiveOak’s savings account.
Earn 4.00% APY on all savings account balances. No APY earned on checking accounts.
None, but startups should consider the average daily balance requirements listed above.
Cash deposits are not available.
The savings account APY is much higher than APYs offered by most banks.
LiveOak Bank, a subsidiary of LiveOak Bancshares, Inc. (NYSE: LOB), is an FDIC-insured bank.
QuickBooks Online
LiveOak Bank offers a low-cost checking account for startups that can maintain the required average daily balance (or offset fees with earnings in the Plus Analysis account). LiveOak is particularly attractive for startups who can earn higher yields using the savings account.
Startups that want full integration to automate business checking, corporate cards, and AP automation should choose Rho. In addition, Rho does not charge platform fees.
Meow is a business banking platform that allows businesses to invest in money market funds. This includes Maximum Checking with up to $125 million in FDIC insurance through partner banks and their sweep networks and U.S. Treasury Bills held in custody at BNY Mellon Pershing.
Meow promotes the high APY rate on the Maximum Checking account and the ability to invest in money market funds. It does not offer many of the other financial services startups may need to operate efficiently.
Meow offers a fairly low-cost business checking account. Startup founders can earn a very competitive APY rate if their business meets deposit minimums.
Earn up to 5.02% APY by meeting deposit minimums.
$10
None
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Grasshopper Bank, N.A., and Third Coast Bank SSB; Members FDIC
Meow integrates with QuickBooks, Xero, NetSuite, and Sage.
Aside from being focused primarily on the venture capital and startup market, Meow’s treasury solutions are self-serve, which means you must make investment decisions on your own. If you aren’t comfortable doing that or feel you lack the experience, Meow is likely not a good choice.
Rho offers a seamless platform to manage all cash and spending for companies of any size, as well as treasury solutions that put your cash to work for you based on a policy you select.
NorthOne provides a business banking platform that is integrated with bill payment and bookkeeping tools. NorthOne also offers lending services.
NorthOne customers have two checking account options and must pay a monthly fee to get a higher level of service. NorthOne also provides several ERP integrations for accounting platforms.
NorthOne is an adequate tool for freelancers, contractors, and solo business owners who need business banking, bill payment capabilities, and a QuickBooks accounting integration.
None
A NorthOne Standard account does not charge a monthly fee. The NorthOne Plus account includes a $20 monthly fee and provides priority support and a dedicated relationship manager.
$50
Customers can deposit cash at the POS system at most Walmart, Walgreens, CVS, RiteAid, and 7/11 locations. There are limits on the number and dollar amount of cash deposits made per day.
None
None
Banking services provided by The Bancorp Bank, N.A., Member FDIC. Customer deposits insured up to $250,000.
Accounting integrations with QuickBooks Online, QuickBooks Desktop, Sage, and FreshBooks.
NorthOne provides business banking, bill payment services, and some accounting integrations. Startup founders need a more comprehensive financial platform as the business grows, including treasury management and other tools.
Rho offers a fully integrated financial solution with no platform fees.
Novo provides checking accounts, debit cards, and invoice processing for business finances.
Novo provides a low-cost business checking account, but users cannot send domestic or international wire transfers, and customer support is not available by phone.
Novo is a low-cost business banking option for freelancers, contractors, and solo business owners with limited financial needs. Customer support is very poor compared with other banks, which were reviewed based on third-party reviews, including NerdWallet.
In addition, customers cannot send wire transfers.
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None
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None
Deposits are insured for up to $250,000 through Middlesex Federal Savings, member FDIC.
QuickBooks and Xero
Novo offers freelancers and solo business owners a low-cost business banking option, and ATM fees are refunded to customers. However, Novo’s financial service tools are very limited. Customers cannot send wires, and customer support is not available by phone.
Rho offers a fully integrated platform with customer support by phone, and Rho does not charge platform fees.
Relay provides business checking and savings accounts, AP processing, and receipt management for businesses.
Relay Pro is a basic business checking account solution that does not charge a monthly fee. Relay Pro offers additional features, including same-day ACH and free outgoing wire transfers for a $30 monthly fee.
Relay provides an inexpensive checking account, and the ability to earn attractive yields in a saving account. The software also integrates with QuickBooks. However, Relay’s 6-7 business day hold on deposited checks is much longer than most competitors, and long holds impact cash flow.
Saving account balances pay a 1.00% APY to 3.00% APY rate, depending on the total savings balance.
The Relay bank account does not charge a fee. A Relay Pro account includes a $30 monthly fee.
None
Customers can deposit cash using AllPoint ATMs.
None
Saving account balances pay a high APY rate compared to traditional banks.
Thread Bank, member FDIC, provides up to $250,000 in insurance.
QuickBooks Online and Xero
Relay provides business checking and savings accounts that can meet a startup founder’s needs. As a startup grows, the business will need corporate credit cards, treasury management, and other services in a single platform. Rho offers all of these services with no platform fees.
Arc provides startup cash management essentials, including payment management, treasury services, and financing. Arc can manage a company’s operating account and provide cash reserve account services. Investments are made through BNY Mellon Pershing.
Arc offers checking, savings, and investment accounts. The checking account is a low-cost option, and customer support is effective.
Arc customers can invest in money market funds and treasury bills. Users can set up auto-balancing rules to automatically move funds between operating and treasury accounts.
Customers can also diversify deposit balances across Arc’s banking partners and receive up to $5.5 million in FDIC coverage and $500,000 in SIPC insurance.
The Arc Operating account (business checking) does not earn an APY rate. Customers can earn 4.00% APY with the Arc Reserve (savings) account.
$0
None
None
None
None
Evolve Bank and Trust, an FDIC-insured financial institution
Arc provides an integration with QuickBooks.
Arc does not currently offer a mobile app, which may slow down user productivity. Arc’s standard treasury account does not offer automated cash balancing.
Rho offers a fast and reliable platform for treasury management, and the solution is integrated with AP, expense management, and commercial banking. Also, Rho provides a mobile app and does not charge platform fees.
After securing a term sheet, startup founders need a secure banking platform to store the cash they raise and pay vendors and employees. Business owners also need a partner to meet more complex needs as the business scales while remaining financially stable.
For example, many startups use Rho’s business banking platform to manage their operating accounts, earn yield on cash, and automate key parts of their financial operations.
Neobanks differ from traditional banks based on business structure, services offered, and the direct regulatory environment.
A neobank is a term some analysts use to describe financial technology companies – that are not banks (i.e. do not have a banking charter) – that partner with regulated banks to offer business banking services.
Neobanks primarily offer digital and mobile banking products (with banking services provided by partner banks) but often extend beyond the capabilities of a traditional brick-and-mortar bank.
For example, the Rho business banking platform also offers expense management, AP automation, and accounting integrations that speed up the month-end close process – capabilities you wouldn’t expect from a bank.
Some neobanks also partner with other entities to provide physical ATM or cash drop-off locations – capabilities some smaller businesses may find beneficial.
Neobanks may offer various financial services, including banking, payment processing, lending, and investment management. These firms use technology to provide innovation, more convenience, and a better customer user experience.
Traditional banks serve customers through physical branches and online, but many are slow to adopt new technologies and far less innovative. Neobanks operate online and through mobile apps and embrace innovation to meet customer needs.
Neobanks continually update their platforms to offer new features based on market trends and customers' unique needs.
Banking is a heavily regulated industry, and traditional banks must comply with several regulatory requirements. Neobanks, however, face fewer regulatory hurdles, especially if they partner with a regulated bank to provide banking services.
Traditional banks have high operating costs for maintaining physical bank locations, ATMs, and legacy infrastructure. Banks may also charge higher fees and offer lower deposit interest rates to recover these costs.
Neobanks can offer financial services with lower fees and more competitive rates because they have a lower cost structure than traditional banks.
Did you know? Rho Business Savings Accounts are built on a network of over 400 FDIC-insured banks, allowing you to access up to $75M in FDIC deposit insurance per entity. These Treasury Management services are provided by American Deposit Management, LLC.
Founders of new businesses need banking services, including bank accounts, access to loans, and the ability to invest excess cash to earn higher yields.
Owners also need a suite of financial tools to manage cash, payables, and other activities. Responsive customer support is also important. Here are some features and benefits business owners should evaluate:
These extra services help the startup to automate more tasks, increase productivity, and reduce the risk of errors:
AP automation software digitizes and automates the end-to-end accounts payable process, allowing businesses to capture, code, match, and approve accounts payable data using fewer manual tasks.
Cash management is the process of monitoring and forecasting cash inflows and outflows. The goal is to generate sufficient cash inflows to pay all required cash outflows and maintain adequate financial health. The software automates cash flow monitoring and forecasting.
Make the payment process as seamless as possible. Send invoices to customers electronically and give customers the option to pay invoices online.
Treasury management involves managing cash flows, optimizing investment returns on available cash, and planning liquidity to fund business operations.
Treasury management and business banking are interconnected. Bank accounts are used by treasury teams to move funds in and out of treasury investment accounts.
These additional tools help startup businesses with spend management and other tasks:
A corporate credit card helps companies manage their business expenses and budgets. It’s often used for expenses like travel, digital ads, client entertainment, cloud computing, SaaS software subscriptions, and more.
Did you know? The Rho corporate credit card offers up to 1.25% cashback on all purchases, and Rho has zero platform fees.
Spend management encompasses organization-wide spending, accounting for invoice (accounts payable) and non-invoice (T&E) spend. Spend management software automates these tasks:
Rho can automate payables, expenses, banking, and treasury with ease in one platform.
Many businesses reevaluated their FDIC deposit insurance risks after the Silicon Valley Bank (SVB) crisis in March of 2023. Business owners need to understand how much FDIC insurance protection they have clearly, the cost of business banking, and how quickly they can access cash balances.
Companies need a platform to monitor total balances in each bank account and move funds if the balance exceeds the threshold for FDIC insurance coverage.
SaaS startup Superfiliate is disrupting affiliate marketing in e-commerce. Discover why their co-founder transitioned from Silicon Valley Bank (SVB) to Rho.
A Gartner 2023 survey reports that setting a finance technology strategy is a top priority for CFOs. Startup founders need a fully integrated platform so that every cash transaction can be tracked and reviewed in real time.
Transfers between bank and investment accounts are fully automated, and month-end reconciliations are performed electronically. The platform also integrates with the customer’s ERP.
Startup founders wear many hats and must manage the business, deal with investors, and continually innovate to succeed.
The banking service provider you choose may not seem like a critical decision. However, as the business grows and becomes more complex, your financial services platform can facilitate company growth — or slow it down.
Here are some banking factors to consider:
Regarding banking, startup founders have dozens of options, including legacy financial institutions like Chase or Bank of America.
Business banking fintechs offer the same basic services as legacy banks, including checking, wire transfers, lines of credit, and investment options. Scaling the business creates complexity, and you need an innovative platform that can meet your needs.
Here are three reasons why you should consider a more sophisticated online platform.
As you grow, your chart of accounts becomes more complicated. You may add new product lines, additional company divisions, or purchase a competitor.
Founders need a platform that can manage a complex general ledger and a system that supports multi-level spending approvals.
It’s important to reimburse employees quickly and provide a smooth process for submitting expenses.
A manual system leads to misplaced receipts, lost invoices, unread emails, and approval delays. Implement an automated system to review and approve expenses in less time.
Vendors need an automated process to submit invoices, check on an invoice’s status, and receive payment promptly. With automation, you can easily store a vendor’s preferred payment method, banking details, and other important data.
Use a financial services platform to manage complexity as you grow your business.
Technical debt is the cost of reworking a task when an easier but limited tool is used to complete it. Alternatively, a business could choose a better approach and avoid the time and expense required to rework a task.
Many startups use point solutions for financial services. If the point solution isn’t integrated to other software in your financial stack, you’ll invest more time and money to complete a particular task.
Say, for example, that your corporate card provider isn’t integrated with your bank’s software. At the end of the month, the AP staff must manually compare card transactions to the credit card statement. This process is time-consuming and generates manual errors.
A better solution is to use a corporate card provider that uploads the credit card statement into your bank’s software. Reconciliations are automated, saving your team hours of time.
When you use multiple software solutions, costs, and transaction fees can rise quickly. Find a single financial solution to control costs and simplify business operations.
A banking platform requires an experienced, responsive customer support team that solves problems quickly. Customer support teams that cannot be reached by phone are not effective.
G2 and other software review sites have dozens of complaints from users who can only reach customer support by chat or email. Financial platform challenges are complex, and resolving a problem quickly requires a phone call.
Dutzendes of banking platforms are available for startups. To evaluate vendors, consider what financial tools you need, the platform’s cost, and the software company’s ability to implement the solution promptly.
Here are just a few questions you should consider as you evaluate different offerings:
Rising interest rates have an impact on startup banking. The impact depends on the startup’s stage, the financial health of the business, and financing needs. Consider each of these factors:
Higher interest rates increase the cost of borrowing for both lines of credit and longer-term loans. If your startup has a variable-rate loan, your interest expenses will increase as rates go up. When a business pays more interest expense, profitability declines, and cash flow is impacted.
When interest rates rise, so do monthly payments on newly originated loans. Higher payments increase the risk of loan default, and startups may have more difficulty securing financing. Startups with a limited credit history or poor financial health will have the most difficulty.
When banks are more selective and underwrite fewer loans, startups may consider alternative funding sources. Startup founders may pursue venture capital, angel investors, crowdfunding, or peer-to-peer lending.
Alternative funding sources may offer more flexible terms than a traditional bank loan.
When the cost of borrowing increases, startup founders in capital-intensive industries may reassess plans to expand the business, due to the higher cost of funds, major purchases and product development initiatives may be delayed.
On the other hand, startups with excess cash or profits benefit from earning higher interest rates on savings and investment balances.
If higher interest rates are accompanied by inflation, startups will face increased labor, materials, and professional services costs. Higher costs lower profit margins, and startup founders may not be able to increase prices to offset the impact of inflation.
Higher interest rates can generate volatility in the financial markets, including the stock and bond markets. Startup founders and employees often experience fluctuations in the value of their equity holdings during market volatility.
For all these reasons, startup founders should monitor changes in interest rates and consider the business impacts if rates increase. The best business managers monitor changes in economic conditions and make adjustments.
This article points out that some banking options offer low-cost banking services and platforms, and others offer a limited number of integrations. Fees vary widely depending on the services offered.
Rho is the best platform for startups that need business banking and is an integrated platform with AP automation, corporate cards, and treasury services. Rho does not charge platform fees.
The Washington Post explains that Silicon Valley Bank (SVB) is now owned by First Citizens Bank, which bought the deposits and branches out of bankruptcy after the March 2023 SVB collapse. Eighty-one percent of customers still have accounts at SVB.
Most SVB customers now have multiple bank accounts and do not rely completely on SVB’s management team. Many startup founders are spreading deposits between various banks to protect company assets.
Yes. Many financial institutions now have systems that transfer bank balances to other FDIC-insured banks when the total balance in one bank is higher than the $250,000 FDIC insurance limit.
Companies that spread deposits between multiple accounts are less risky if one bank has financial trouble.
A founder should open a bank account when the startup is legally organized as a business entity. The sooner a founder opens a bank account, the faster they can build a banking relationship and a business credit history.
Many startup founders need additional capabilities, such as multi-entity support, AP automation, and other important financial operations features. The best startup banks and fintechs offer great service at a low cost.
Rho's scalable platform offers an end-to-end solution encompassing corporate cards, expense management, AP automation, business banking, and treasury management under one roof.
This means startup businesses do not have to juggle multiple services as they grow, saving time and streamlining operations.
Schedule time with a Rho expert today to learn more about Rho!
Competitive data was collected as of September 13, 2024, and is subject to change or update.
Rho is a fintech company, not a bank. Checking and card services provided by Webster Bank, N.A., member FDIC; savings account services provided by American Deposit Management Co. and its partner banks.
Investment management and advisory services provided by RBB Treasury LLC dba Rho Treasury, an SEC-registered investment adviser. RBB Treasury LLC facilitates investments in securities: investments are not deposits and are not FDIC Insured. Investments are not bank guaranteed, and may lose value. Investment products involve risk and past performance does not guarantee future results. Registration with the SEC does not imply a certain level of skill or training. Treasury and custodial services provided through Apex Clearing Corp. Treasury and custodial services provided through Interactive Brokers LLC for clients with accounts opened prior to July 2024; IBKR rates may vary from Apex rate shown above.
¹Deposit accounts at Rho are FDIC insured by Webster Bank, N.A., Member FDIC (checking and credit cards), and American Deposit Management, LLC. (savings).