Square Business Banking Review: Pros And Cons

Square offers a suite of business banking products and services.

Small business owners have to wear a lot of hats. The juggling act is simply a part of building a business.

But having to to keep track of multiple financial accounts for your company can add unnecessary hassle and stress to your life as a business owner.

What if most of your business banking needs could be handled in one place? That’s where Square Business Banking comes in. It can simplify your business banking experience to keep your money to-do list tasks at a minimum?

Let’s take a closer look at what Square Business Banking can offer you.

What Is Square Business Banking?

Square was founded in 2009 with the goal of helping business owners of all sizes seamlessly collect payments and manage their business finances. The company also entered the peer-to-peer payment space in 2013 with the launch of Cash App and has consistently added to the app's capabilities over time.

In more recent years, Square has begun to expand its offerings to business owners. Instead of only collecting payments from customers, Square wants to provide a suite of banking solutions for businesses as well.

The beginning of this expansion into banking kicked off with a debit card offering in 2019. Since then, the business banking offerings have expanded to include a checking account, savings account, and small business financing options on a single platform.

What Does It Offer?

Here’s what stands out about Square Business Banking.

Checking Connected To Your Square Sales

If you're using Square to collect payments from customers, you'll find the banking platform especially useful. As your Square sales are processed, the funds will be immediately available in your checking account and can be spend via your debit card.

The best part is that this process happens automatically. You won’t have to find the time to shift funds around. Instead, you can instantly access your sales inside your Square Checking account as soon as the transactions come in.

The Square Checking account has no minimum deposit or balance requirements. Customers receive a routing number that can be used to set up bill pay and they can withdraw cash from ATMs. However, the Square debit card doesn't earn any cash back or rewards.

Savings With A Competitive Yield

Square Savings is designed to help you keep your funds working for you and your business. Instead of your company's cash collecting dust in a checking account, you can store these business savings in a connected high-yield savings account.

The APY on this account is currently 1.75%. That’s a worthwhile perk for users of the Square Business Banking platform.

You can also set your business savings on autopilot. Just let Square know exactly what percentage of your sales you want to save. With each sale, Square will automatically transfer the appropriate percentage.

As you build your savings, you can track your progress towards specific goals. Or you can choose to pause the automatic savings whenever you need to.

Loans With Flexible Repayment

Square Business Banking doesn’t stop with a checking and savings account. You’ll also be able to take out loans for your small business through Square. Depending on your eligibility, you can take out small business loans that range from $300 to $250,000.

If you take out a loan with Square, you'll pay a flat fee of 10% to 16%. But, importantly, there is no ongoing interest rate.

The repayment process is unique. Square will be automatically be repaid through a percentage of your daily card sales (usually 9% to 13%). With that, you’ll pay less on slow days and more on high-volume days. You’ll need to make a minimum payment at least every 60 days though.

These loans come with 18-month terms. And if you only make minimum payments every 60 days, you'll have 50% of your loan remaining to repay at the end of those 18 months. However, you can pay off your loan at any time. There are no prepayment penalties.

Are There Any Fees?

Square Business Banking makes it a point to provide an affordable banking experience for its sellers. There are no monthly fees, overdraft fees, foreign transaction fees, or minimum balance requirements. And you won't be charged a fee to have your Square sales instantly funded.

Square doesn't charge any ATM fees itself, but it also isn't part of any ATM network. That means you can expect to pay fees to the ATM operator whenever you withdraw cash from your Square account. Unlike some of its competitors, Square doesn't reimburse any of these third-party ATM fees.

As we've already covered, you’ll have to pay a flat fee on any loans you take out from Square. But you won’t run into late fees added to the amount you owe and there aren't any penalties for paying off your loan early.

How Does Square Business Banking Compare?

The Square Business Banking platform is only available to business owners that process sales with Square. So if you're a business owner who doesn't receive Square payments, this won’t be the right business banking platform for you.

If you're a freelancer, you might want to consider Novo or Lili. But if you'll need to make regular cash deposits, a traditional brick-and-mortar bank like Chase Business Complete Banking might be a better option. 

You can see how Square Business Banking compares in the quick table below. Or you can check out our best business bank accounts to compare a larger list of the top accounts available right now.

How Do I Open An Account?

Square Business Banking makes it easy to open an account. Start here. If you're already a Square seller, you can have a checking account up an running with Square in less than two minutes. 

Importantly, you won’t need to pass a credit check or share any of your banking history to move forward. However, you’ll need to be on Square as a seller before you can move forward with the banking accounts. 

Is It Safe And Secure?

Square itself is not a bank. But its banking products are provided by Sutton Bank, Member FDIC. With that, your funds will be insured for up to $250,000. That means you can breathe easily when you work with Square Business Banking.

How Do I Contact Square Business Banking?

You can connect with Square by live chat, email, or phone. The customer service number is 855-897-1838. You'll need to provide your customer code at the beginning of the call which you can access from your account dashboard.

Additionally, you can reach out on Twitter, Facebook, or Instagram @Square. In general, customers seem to enjoy working with Square. Although the banking products are relatively new, the company overall has earned 4.2 out of 5 stars on Trustpilot out of more than 3,400 reviews.

Why Should You Trust Us?

I have been writing and researching banking and personal finance products since 2009. At The College Investor, we've been comparing and reviewing banks since 2018, and track the best banks for savings and money market accounts daily from a list of over 50 major banks and credit unions.

Plus, we're small business owners too - and we're always looking for products and services that can make our business banking needs better.

Furthermore, our compliance team reviews our rates every weekday to ensure that we are accurately showing the correct rates and terms so you can make an informed decision about where to open a savings account.

Square Business Banking could help you streamline your financial operations if you're already working with Square. The integrated banking features could absolutely make it easier to manage your cash flow.

However, not everyone needs to use Square to accept payments. If you don’t, then Square won’t work for you. And that’s okay! There are plenty of worthwhile business banking options out there that offer helpful features and low fees. See our favorites here >>>

Square Business Banking Features