As you start your business, it’s important to consider how you’ll track and manage your finances. Opening a business bank account makes it easier to keep your business and personal finances separated. If you want to apply for a business loan or credit card, you’ll need a business checking account.
Many business checking accounts are available, and you’ll find that they vary in features, fees, balance requirements and more. When choosing a business bank account, it’s important to take the time to find an account that’s a good fit for your business needs and goals. Read on to learn what to look for in a business bank account.
Factors To Consider When Choosing A Business Checking Account
With so many business checking accounts available, deciding which is right for your business can be difficult. Considering these key factors can help to narrow down your options and help you to choose the best account for your needs.
1. Account features
It can be helpful to make a list of the account features that are most important to your business. For example, a strong mobile banking app, the ability to access a debit card, and the availability of safety deposit boxes and bill payment services might be essential in running your business.
It might also be helpful if you can create business retirement accounts through the same bank. Finding a bank and a checking account that fits all of those needs can be a convenient choice that may simplify your banking.
2. Fees and requirements
To determine if a checking account could be a good fit for your business, take the time to review the account’s fees and requirements. Many banks require that business accounts maintain a minimum balance to avoid additional fees. Consider whether it’s practical for your business to keep that balance month to month.
Review the other fees that you’re likely to pay, too. Transaction fees, early-termination fees, maintenance fees, ATM fees, and deposit fees are all common. You may be able to avoid some of these fees, such as by limiting the number of deposits or transactions you make per month, but again, consider your business needs and whether any transaction or deposit limits are practical for your needs.
3. Branches and ATMs
As you narrow down your options, look up each bank’s local branch locations and consider whether you can quickly get to a branch when you need to. ATM availability is also important. If ATMs in your area are limited, consider the fee you’ll pay for withdrawing money from another institution’s ATM.
If you’re considering an online bank, then the availability of local ATMs becomes even more critical. You should also look into customer service availability for an online-only bank.
4. Integration
Look for a business checking account that can integrate well with your existing financial processes. For example, an account that integrates with your accounting, payroll or tax preparation software can help make that transition smoother and save your staff time and potential headaches.
5. Growth Opportunities
Your needs for a business checking account today may differ five or ten years from now. If a financial institution offers growth opportunities, you could remain with that bank as your business grows and your needs change. In addition to finding a checking account that works for your current needs, research the products that a bank offers that might fit your future needs, like accounts with perks for higher balances, business loans, interest-bearing accounts, and more.
6. Introductory Offers
While it’s important to choose the business checking account that’s the best fit for your needs, if you’re choosing between several good options, bonus offers might help you decide which account to open. Many banks provide introductory offers that could give you a cash bonus for opening a business account with a specific minimum opening deposit.
Be sure to carefully review any introductory offer’s terms and conditions. Ask any questions before you open your checking account.
7. Account Insurance
Finally, make sure you’re choosing a financial institution insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). The FDIC and NCUA insures checking accounts for up to $250,000 each. Confirming that the financial institution is insured can give you peace of mind knowing your money is protected.
Advantages Of A Business Bank Account
If you haven’t opened a business bank account, now is probably the time to start. There are many benefits of opening a business bank account:
- Prove Business Legitimacy: Opening a business bank account is an excellent way to establish your business as a legitimate operation. If you’re audited, a business account will look more professional to the IRS, and it may help to prove that you’re not commingling business and personal funds.
- Improve Bookkeeping Ease and Accuracy: Your bookkeeping becomes easier with all of your business’ funds and transactions in a single account. These factors make it easier to prepare your taxes, and if you are ever audited, having all your finances in one location makes retrieving the information you need easier.
- Make Your Business More Professional: Paying for invoices with a business check enhances the professionalism of your business. This can be particularly helpful when you’re just starting and are working to build your business’ reputation.
- Build Your Business Credit: Opening a business checking account could help you build your business credit rating, which will be important if you ever decide to apply for business financing or a credit card. You can build credit by carefully managing your account and not overdrawing it. Plus, if you choose to apply for a business credit card, most lenders require you to have a business checking account.
- Apply for Business Loans: A business checking account is also a common requirement for applying for business loans. Opening an account now will give you time to establish your financial history and the bank statements most lenders want to review with your application.
- Establish a Bank Relationship: If you anticipate needing business funding, like a business loan or credit card, opening a business bank account allows you to establish a relationship with the bank. When you have a history with a bank, you’ll have higher odds of being approved for financing.
Choose From A Range Of Checking Options Tailored Toward Your Business Goals
Whether you’re starting a career as an independent contractor or preparing to launch your startup, choosing a checking account tailored to your business goals can contribute to your success. Arizona Central Credit Union offers a business checking account that might be the perfect fit. Learn more, then contact us if you have any questions.
