Should You Bank With Square?

53 4 minutes read

If you already use Square to take payments, opening a Square Checking account makes sense. It lets you spend your revenue right away, instead of waiting a day or two for funds to transfer to another bank.

But make sure you open a free business checking account at a different bank, too. Having two accounts gives you some flexibility if either institution freezes an account — which is a relatively common complaint among users of online banks.

Square is part of Block. It is a financial technology company, not a bank. Checking services are provided by Sutton Bank, Member FDIC. You’ll access your account via Square’s platform, but your funds are actually held by Sutton Bank.

Square Checking: The basics

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Pros

No monthly fees or minimum opening deposit.

Unlimited fee-free transactions; no overdraft fees.

Instant access to revenue from your Square payment processing system.

Cons

ATM withdrawal limits may be as low as $2,000 per month.

The FDIC issued a consent order to Square’s banking partner, Sutton Bank, in 2024.

If you’ve heard of Square, it’s probably as a payment processor and point-of-sale system. But in recent years, the company has rolled out Square business loans, credit cards and now bank accounts. This is part of an effort to provide small-business owners with lots of services under one roof.

While Square isn’t a bank, Square Checking works the same way as other checking accounts.

Who can open a Square Checking account?

Anyone with a Square account can open a Square Checking account. The company says you can open the account from the Square dashboard, though Square may request additional information.

To be eligible for Square Checking, you must:

Be a U.S. citizen or permanent resident or operate a U.S.-registered business with an Employer Identification Number.
Be at least 18 years old.
Provide your name, birth date, address, email address, Social Security number, legal entity name, employer identification number and beneficial owner information.

How do you add money to your Square Checking account?

Once your account is live, your Square sales will be deposited automatically. Square says this generally happens within 15 minutes after processing. You’ll see them listed among your transactions. You can also make mobile check deposits and ACH transfers.

One differentiator between Square and other bank accounts: You can link a third-party debit card to your Square account. If a bill comes out of your account or you swipe your debit card and you don’t have sufficient funds to cover it, Square will charge your third-party debit card instead.

Overdrafts aren’t possible, but with a linked account, your transaction won’t be declined.

How do you withdraw money from a Square Checking account?

Square will mail you a debit card linked to your account, which it says will arrive in 7 to 10 days. You can use it to make purchases or withdraw cash at ATMs, subject to limits. Square doesn’t charge ATM fees, but ATM operators might. You can order up to five debit cards.

If you want to pay vendors from your Square checking account, you can set up bill pay in the Invoices, POS or Appointments apps.

Does Square have a savings account?

Yes, Square has a standalone business savings account. These accounts are provided by Square Financial Services, Inc. Member FDIC. Deposits are insured by the FDIC for up to $250,000.

Square Checking users can automatically transfer a certain portion of revenue to a linked Square Savings account. The account pays 1.0% APY as of this writing. Like Checking, it’s free to open and has no minimum balance or monthly fee.

If you’re setting money aside for a near-term bill — sales tax payments, for instance — that’s useful. But if you’re saving for longer-term goals, you can get a better APY from a high-yield business savings account.

Who should open a Square bank account?

If you already use Square, it makes sense to open a Square Checking account. It’s free and quick. And it doesn’t hurt to have another way to access your money.

However, we don’t recommend that any business owner put all their eggs in one banking basket. If one of your transactions raises red flags, any bank can freeze your account or place a hold on some funds. That can grind business to a halt until it’s resolved. (This complaint is especially common for neobanks, where customer service might be harder to reach.)

For that reason, if you open a Square bank account, open one at another institution too. You can use your Square account for revenue and short-term expenses. But as you start to stockpile cash, move it to another institution where it can be available for things Square lacks, like wire transfers.

Other online bank accounts to consider

NBKC: Simple, fee-free online banking

NBKC’s online business bank account is straightforward — you’ll get no monthly fee, unlimited transactions, ATM access, checks and wire transfers, but few software features. If all you need is a bank account, this one is a great choice. Read our review.

Bluevine: Invoicing with payment links

Bluevine’s business checking account recently added invoicing — users can send invoices or a QR code to clients and take payments via Stripe. You can set your payout schedule in Stripe. Instant payouts are possible, but cost extra. Bluevine also pays 1.5% APY on balances (terms apply). Read our review.

Found: Tax-planning tools

Found’s business checking account is designed for solopreneurs and self-employed business owners. Its built-in software suite includes invoicing, automatic set-asides for taxes, expense categorization and tools for managing 1099 contractors. Read our review.

North One: Earning interest

North One pays an industry-leading 2.5% APY on its business checking account. Standard transfers from Square should take one business day. You can also pay a fee for an instant transfer. North One offers standard banking features like bill pay, checks and wires. Read our review.

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Should You Bank With Square?

Square Checking: The basics

Who should open a Square bank account?