Episode 28

If you’re gearing up to launch your service-based business, congratulations! That’s a big step, and I’m genuinely excited for you. It’s always a joy to see someone take that leap of faith and move forward with their business idea.

One question that often pops up when you’re getting ready to launch is this:

“Should I open my business account with an online-only bank or a traditional bank?”

Whew. That’s a good one. It’s one of those questions that seems simple on the surface, but there’s actually a lot to consider depending on where you are in your business journey.

Let’s walk through this together, step by step.

First, a Quick Note…

Before we go any deeper, I want to give a little disclaimer:
I’m not a professional accountant or a financial advisor. This is simply based on my experience running a service-based business for over a decade. So, while I’ll be sharing practical insights that have worked for me and others, it’s always best to check with a professional when it comes to financial decisions.

Alright! Now that we’ve got that out of the way, let’s dive in.

Why Not Choose Just One?

Let me be upfront with you—I actually recommend using both an online-only bank and a traditional bank.

I know, that might sound like a lot at first, but hear me out. Both types of banks bring different strengths to the table, and using both can really help you build a more flexible, efficient, and secure banking system for your business.

Here’s what I mean:

---

Perks of Online-Only Banks

Online banks have come a long way. And as technology keeps advancing, they just keep getting better. Here are a few benefits that make online banking so attractive for service-based businesses:

1. Automation is a Breeze

Want to set up recurring payments? No problem.
Online banks often make automation super easy, which is helpful when you’re paying contractors, scheduling transfers, or managing subscriptions.

2. Team Access Made Simple

Let’s say your business is growing and you’ve got a team. With an online bank, you can give different people access to specific parts of the account—like for handling weekly or monthly expenses. It helps you delegate without losing control.

3. Easier to Scale

As your business grows, you’ll probably need more tools and flexibility. Online banks often use cutting-edge financial tech that helps you scale up without a hitch.

4. Perfect for Profit First

If you’re trying to implement the Profit First method (that’s where you separate your income into different categories like profit, taxes, owner’s pay, and operating expenses), online banks usually make this super easy. Many of them let you open multiple sub-accounts at no extra cost.

Perks of Traditional Banks

Now, don’t count out the traditional banks just yet. There are some really important benefits they offer that online banks can’t always provide:

1. Business Loans & Credit Lines

If you ever plan to apply for a small business loan, open a line of credit, or get a business credit card, traditional banks are usually your best bet. Online banks just don’t offer the same access to credit options.

2. Zelle Payments

A lot of clients like to pay via Zelle. That’s something you can only do through traditional banks at this time. If you know Zelle is going to be one of your payment options, then having a traditional bank account is a must.

3. Face-to-Face Support

Sometimes you just want to walk into a bank and talk to someone. Traditional banks give you that option. It can be really helpful if you run into an issue and need help fast.

4. Established Trust

Let’s be honest—some people feel more secure using a bank they can actually see. Traditional banks have been around for a long time, and there’s a comfort that comes with that for many new business owners.

So… Which One Should You Choose First?

Okay, let’s say you’re just getting started and you’re not ready to manage two banks right away. Which one should you go with first?

Here’s a simple way to decide:

• If you plan to use Zelle as one of your payment options → Start with a traditional bank.
  
• If Zelle isn’t important to you and you’re focused on automation, team access, or using the Profit First method → Start with an online-only bank.
  

You can always open a second account later when your business grows or when you need more flexibility.

Recommended Banks for Your Service-Based Business

Now you might be wondering, “Okay, but which banks should I actually use?”

Here are my top picks, based on personal experience:

✅ Online-Only Bank: Relay Financial

Website: relayfi.com

I love Relay Financial for service-based businesses. They’re super user-friendly and offer some amazing features like:

• Up to 20 free checking accounts (perfect for Profit First!)
  
• Up to 50 debit cards (great if you have a team)
  
• Integration with QuickBooks, Xero, and payroll platforms
  
• Super easy setup, no monthly fees
  

Relay makes it really simple to organize your finances from day one. If you’re planning to run a lean, organized operation, this is a great option.

✅ Traditional Bank: Bank of America

If you’re leaning toward a traditional bank, Bank of America is a solid choice. Here’s why:

• They’re great for small business loans and lines of credit
  
• You can build a relationship with your local branch
  
• They offer business credit cards with useful rewards
  
• They’re reliable and well-established
  

They’ve been really helpful for me over the years, especially when I’ve needed funding or help navigating business credit.

Why Using Both Is a Smart Strategy

Here’s the thing: using both an online and traditional bank actually helps you spread your risk. If one bank has technical issues or goes down temporarily, you still have access to funds in the other one.

Also, by using both, you get to enjoy the best of both worlds:

• Automation + advanced tools from your online bank
  
• Credit access + payment flexibility from your traditional bank
  

And honestly? Having both in place sets you up for long-term success. You won’t have to scramble later when your business starts scaling and your banking needs become more complex.

A Quick Recap

Let’s quickly summarize everything we’ve talked about:

• Use both online and traditional banks if you can—that’s the ideal setup.
  
• Online banks are great for automation, growth, and modern tools.
  
• Traditional banks are better for loans, Zelle payments, and in-person service.
  
• If you’re just starting out and need to pick one, choose based on whether or not Zelle is important to your business.
  
• My top picks: Relay Financial for online banking and Bank of America for traditional banking.
  

Final Thoughts

Starting a business comes with a lot of decisions, and choosing the right bank is just one of them. But it’s an important one! The right banking setup can make your life easier, give you more control over your finances, and help you grow with confidence.

Just remember, you don’t have to figure it all out at once. Start where you are. Make the best choice for where your business is right now, and adjust as you grow. You’ve got this!

If you ever feel stuck or unsure, just take a deep breath and remind yourself:
You have all you need to start that business.

If this was helpful, don’t keep it to yourself—share it with a fellow entrepreneur who’s just getting started too! You never know who might be asking the exact same question.

Got more questions like this one? I’d love to answer them. Keep them coming!

And until next time, keep moving forward—one step at a time.