Flagstar Bank Business Account Review 2023

Thinking of opening a Flagstar account for your business, but not quite sure about it yet? We get you.

We can tell you right off that bat that Flagstar offers an impressive ATM network and a healthy spread of accounts and services (including a free checking option). But Flagstar also operates in just five states, has few customer reviews, and doesn’t accept online applications.

Whether you’re a brand-new business looking for its first bank account, a former Wells Fargo customer whose branch was bought out by Flagstar, or an established business looking for a new home for your funds, let’s find out if Flagstar Bank could be the financial institution you’ve been looking for.

Like most traditional banks, Flagstar offers both checking accounts and savings accounts for businesses.

As we discuss these banking options, keep in mind that you’ll have to visit a Flagstar branch to actually open your new account―Flagstar doesn’t offer online account applications. But after that visit, you can take care of most of your banking online with Flagstar Treasury Access (which we’ll talk more about soon).

Read BMO Harris Bank Review.

If you want a business checking account, you can choose from one of four different Flagstar accounts. The right account for you will depend on things like how many transactions you make each month, what kind of account balance you keep, and whether or not you want to earn interest.

If you need a simple but affordable checking account, you’ll like Standard Business Checking. It’s a free business checking account with no monthly maintenance fee (hurray!), and it offers enough free cash deposits and transactions for smaller businesses to get by with no fees.

If you need more free transactions or cash deposits, you should upgrade to Enhanced Business Checking. It gives you twice as many free transactions and five times as many free cash deposits as Standard Business Checking does―though this account does come with a monthly fee. Fortunately, you can waive the monthly fee in one of three ways:

• Keeping a $5,000 average account balance
• Maintaining a $15,000 average balance across your linked Flagstar accounts
• Using Flagstar merchant services with at least $5,000 in deposits per month

But if you keep larger account balances, you might be more interested in Premier Interest Business Checking and the perks that come with it. Aside from giving you tons of free cash deposits and transactions, this account earns interest (no listed interest rates, unfortunately) and gets you a couple free incoming domestic wires each month. Of course, this account has a higher monthly maintenance fee that takes a bit more to waive:

• Keeping a $25,000 average account balance
• Maintaining a $50,000 average balance across linked accounts
• Using Flagstar merchant services with at least $25,000 in deposits per month

Businesses with big account balances may also like Business Analysis Checking. Like any analyzed checking account, you don’t get any freebies. Instead, you offset banking fees with earnings credits, which you earn based on your account balance. That can make analyzed checking accounts very affordable for businesses with high balances―but very expensive for businesses that don’t earn enough credits.

Aside from checking accounts, Flagstar also has a few types of business savings accounts you can pick from. You can choose a standard savings account, money market savings account, or a business certificate of deposit (CD).

Annoyingly, Flagstar doesn’t publish interest rates on any of these accounts. In our experience, that’s usually a sign the rates aren’t that high or competitive. That may not bother you (since you get all the convenience of keeping your money at one bank), but it’s something to keep in mind as you shop for savings.

Business Savings Plus offers the cheapest savings option, though you can’t use checks and it likely earns the lowest interest rates. You can waive the (very low) monthly fee by keeping an account balance of $1,000.

For a (probably) higher rate and more access to your money, you can go with the Business Money Market Account. This account lets you use checks. Unfortunately, Flagstar doesn’t publish many other details about this one.

Finally, you can pick business certificates of deposit (CDs). These are the most restrictive types of savings―you can’t touch your money until the end of your term―but they often have good interest rates.

Here’s the honest truth about Flagstar Bank: It doesn’t have any truly standout features for business customers.

That doesn’t make it a bad bank, to be clear. It has plenty of good things to offer, like several tiers of checking accounts, some decent savings account options, and a range of other business banking products (like loans and credit cards). And for a bank of its size, Flagstar has a sizable ATM network.

But other banks have those things too. And some other banks have knockout features, like high interest rates for checking (from BlueVine) or excellent accounts for nonprofits (from BBVA). Flagstar doesn’t.

On the other hand, Flagstar also avoids the red flags that often pop up with other traditional banks, like tons of government lawsuits or a heap of customer complaints about bogus fees. That’s kind of a feature in and of itself.

So while Flagstar may not be a knockout bank, it does stand up pretty well when compared to the competition.

While Flagstar is a traditional bank (with physical locations), we want to show you how it compares both to other traditional banks and to some online competitors.

First, let’s talk about pricing. Thanks to its free checking account. Flagstar actually offers a cheaper option than most traditional banks. But it does still charge transaction fees and cash deposit fees even on its free account, which makes it more expensive than fee-free online banks. In other words, Flagstar is cheap―but not the cheapest.

But then there’s availability. Flagstar operates in only five states, which makes it unusable for the vast majority of businesses. In comparison, online banks operate in all 50 states, and bigger traditional banks offer banking in dozens of states. That makes Flagstar look pretty limited.

And in fact, that’s one of the biggest downsides to Flagstar.

Flagstar might impress us more if it were available in more states. But as it is, Flagstar Bank offers banking services in just five states:

• California
• Indiana
• Michigan
• Ohio
• Wisconsin

That means Flagstar isn’t an option for businesses in most states. (You can always find the best bank for business in your state instead.)

This limited footprint leads to another downside: Flagstar Bank doesn’t have many customer reviews. (But we’ll cover the ones it does have in just a minute.) That can make it hard to get a feel for how good Flagstar Bank really is.

One other downside to consider? Flagstar doesn’t let you apply for a bank account online. That’s not terribly unusual with a traditional bank, but it sure is annoying. Good thing Flagstar gives you more online banking options once you open an account.

We mentioned earlier that it’s hard to get a good idea of what Flagstar business customers think about the bank.

See, Flagstar actually has decent reviews on Trustpilot and Bank Branch Locator―and 2.4 and 3.3 out of 5, respectively.^{1, 2} (Those aren’t bad scores for a traditional bank.) But while those scores come from a few dozen customer ratings, only a handful of people left actual reviews.

One of those reviews is very positive, praising Flagstar’s great customer service. The other four skew negative, with complaints about things like Flagstar charging fees for payments by phone or troubles with a Flagstar mortgage loan.

And speaking of mortgage loans, those come up a lot on Flagstar’s Better Business Bureau profile, where it earns 1.02 out of 5 stars (which is pretty comparable to other banks).3 Almost all of the customer complaints there are about mortgage experiences, with just a few reviews saying Flagstar has poor customer service generally.

In other words, there’s not much from Flagstar bank account customers―much less business bank account customers.

But honestly, you might take that as a good sign. After all, it means those customers aren’t up in arms about common banking issues (like excess fee charges). So we think there’s a pretty good chance you’ll have a decent experience with Flagstar business banking.

We’ve told you plenty about Flagstar Bank by now, but we’re done just yet. It also has things like business loans, credit cards, and merchant services that might interest you.

Flagstar Bank has a few loan products for businesses, including term loans, lines of credit, commercial real estate loans, and SBA business loans.

It doesn’t list interest rates for these loans. But since it’s a traditional lender (as opposed to an online lender), we expect Flagstar has pretty competitive interest rates―almost certainly starting well under 10%.

If you’d like to get a loan or line of credit from Flagstar, you’ll have to meet some qualifications. Flagstar lends only to businesses that are at least two years old, profitable, and have enough cash flow to cover loan costs. It also looks for “satisfactory” personal and business credit (which we’d guess means a personal credit score in the high 600s).

Those are pretty typical borrower requirements for a bank. (But if you’d like a loan that’s easier to qualify for, we suggest going with an online lender like Lendio instead.)

Flagstar Bank offers a handful of business credit cards too. You can choose from one of four Visa cards:

• Visa® Business Cash Card
• Visa® Business Real Rewards Card
• Visa® Smart Business Rewards Card
• Visa® Business Card

If you want low interest rates, stick with the Visa® Business Card. It has the lowest rates of Flagstar’s cards, with the tradeoff that you don’t earn any rewards.

The three other cards all earn rewards on your spending. As you probably already figured out, the Visa® Business Cash Preferred Card gives you cash rewards, while the Visa® Business Real Rewards Card and Visa® Smart Business Rewards Card give you points-based rewards.

As a Flagstar customer, you can also get a few more business services:

• Treasury management
• Payroll services
• Simplified employee pension IRA (SEP)
• Merchant services

So by now, you should know whether or not Flagstar has the bank accounts and other banking products your business needs. But what do existing Flagstar Bank customers think of those accounts and products?

We’ve reached the end of this review, which means it’s time to ask again if Flagstar is right for your business.

We think Flagstar could be a good fit if your business is in one of the few states it operates in, if you like the accounts and other business products it offers (like the free business checking account), and if you don’t need the sorts of standout features some other banks offer (like super competitive interest rates or niche business accounts).

If that describes your business, Flagstar probably has what you need for business banking―even if it won’t knock your socks off with cool extras and makes you open new accounts in a branch.

Not sold on Flagstar just yet? Compare it to some alternatives with our rankings of the best banks for small business.

Before writing this review, we researched Flagstar to find out more about its account options, banking fees, branch locations, customer reviews, and more. After grading it on almost one dozen factors, we calculated an overall score and compared Flagstar to dozens of other banks.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.