Death by a Thousand Cuts: How Some Banks Use Hidden Fees to Peck Away at Your Finances

Banks love their customers. Right? That’s why their advertising campaigns are so appealing; they know us. They see us. They understand us.

But in some cases, they might understand us a little too well. While many traditional banks claim to offer free business accounts — pandering heavily to small-business owners in the process — it turns out that’s rarely the case. Instead, many banks are slipping in fees here and there that customers don’t even know they’re paying.

Seed recently conducted a survey to find out what small-business owners get from their current banks, and what they’d love to see done differently. And some of the results were… disturbing.

Many entrepreneurs believe that they can trust the bank with which they hold a personal account for their business needs as well; in fact, 63 percent of our respondents use the same bank for both. But that’s not always the best choice.

Many large banks charge fees for not holding a minimum balance — and if you’re just starting out, those balances can be hard to maintain.

You’ll Get Punished for a Low Balance

Seed looked at fee structures for a number of major banks and found that what looks like a good deal entirely depends on how much money you already have in the bank. Let’s start with JPMorgan Chase. The Wall Street conglomerate offers three types of business accounts, which require customers to hold between $1,500 and $100,000 at all times. Should you drop below that, you get hit with fees ranging from $12 to $95 a month.

Wells Fargo isn’t much better; while it offers a business account that doesn’t require a minimum balance, it comes with an automatic $20 monthly fee. The other three business accounts require minimum holdings of $500 to $25,000, charging between $10 and $40 a month if customers drop below. For established companies, these can be non-issues, but for freelancers and startups with fluctuating accounts and expenses, these fees can sting.

Bank Minimum Balance Monthly Fee Does Minimum Balance Waive Fee?
Chase Total Business Checking $1,500 $12 or $15 if paper statements Yes
Chase Performance Business Checking $3,500 $30 Yes
Chase Platinum Business Checking $100,000 $95 Yes
Bank of America Business Fundamentals $5,000 $13 Yes
Bank of America Business Advantage $1,500 $29.95 Yes
Wells Fargo Business Choice Checking $7,500 $14 Yes
Wells Fargo Platinum Business Checking $25,000 $40
Wells Fargo Simple Business Checking $500 $10
Wells Fargo Analysed Business Checking N/A $20 N/A
CitiGold $200,000+ in eligible linked deposit, retirement and investment accounts. None N/A
Citi Priority $50,000+ in eligible linked deposit, retirement and investment accounts. $30 Yes
Citi Bank Account $10,000+ in eligible linked deposit, retirement and investment accounts. $25 Yes
Basic Banking $1,500+ combined average monthly balance in eligible linked accounts. $12 Yes
Affordable Access $1,500+ combined average monthly balance in eligible linked accounts. $10 Yes
US Bank Platinum $25,000 $25
US Bank Gold $10,000 $20 $10,000 average collected checking balance or $25,000 average collected checking balance on interest bearing option

—- or —-

$20,000 in combined average collected deposit balances or $50,000 in combined average collected deposit balance on interest bearing option

—- or —-

$50,000 combined average collected business deposits and outstanding business credit balances15 OR $75,000 in combined business deposit and outstanding business credit balances on interest bearing option1.

US Bank Silver $1,500 None
US Bank Premium None $20 tax/fee for OR can’t be waived Analyzed account; maintenance and transaction fees can be offset by an earnings credit based on account balance.
Capital One None None N/A
PNC Preferred None $50 yes, or $3,000 net monthly purchases, or have a CC.
PNC Plus $25,000 $20 yes, or $2,000 net monthly purchases, or have a CC.
PNC $5,000 $12 yes, or $1,000 net monthly purchases.
SVB $1,500 None N/A
First Internet Bank – Small Business $10,000 $25 Yes
First Internet Bank – Commercial Premium $25,000 $15 Yes
First Republic – Simplified Business Checking $15,000 $30 Yes
First Republic – Business Interest Checking $15,000 $30 Yes
SmallBusinessBank None None N/A

Hidden Fees Are Tucked Into a Bunch of Bank Services

Monthly fees aren’t the only ways that big banks make money from their small-business customers. In our survey, we found that **37 percent of entrepreneurs pay a fee to complete wire transfers; 16 percent are charged for paying bills through their bank; and 13 percent pay the bank for ACH transfers (direct deposit)**. That’s a lot of money going back into the hands of bankers, often in ways that aren’t obvious at the outset. And unless you’re tracking every single transaction at all times, it’s entirely possible that these fees are slipping by unnoticed.

So, the return for all this extra money shelled out must be pretty amazing, right? Not necessarily.

Nearly a third of our respondents aren’t able to pay their bills online or on their phones (and, as we noted, many that do are charged for the opportunity).

Up to 84 percent weren’t able to access any kind of meaningful cash flow data via their phones.

And for entrepreneurs looking for financial advice? Go somewhere else. Up to 76 percent of the folks we talked to don’t get any type of assistance in managing their business.

Seed freelance banking

We Believe in the Customer

That’s what we’re hoping to fix with Seed. Customers are offered an account with no monthly service charge (and $25 per outgoing wire), and effective bookkeeping and reporting tools, along with awesome customer support, to help keep your business running smoothly. We believe in making things easy for your small business — because we’re a small business too.




Seed is fast, free, easy online banking for the creative freelancer. As a freelancer with little overhead, you can move fast; and as a freelancer hustling for jobs, you’ve got to move fast. Traditional banks can’t keep up. We combine the technology of a big bank with the one-on-one accessibility of a community bank. We want to be transparent so that our customers understand the banking process, feel like they can reach out to us with any questions, and feel comfortable trusting us.