What to Look for When Choosing a Business Checking Account

While this guide focuses mostly on bank accounts, we do want to point out that banks offer way more than just checking and savings accounts. Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business What To Look For In A Bank For Your Business bank accounts and software for small to medium-size businesses. She lives on what’s almost a farm in northern Wisconsin with her husband and three dogs. Businesses interested in opening a merchant services account to process debit and credit card transactions should provide their bank with details of their average monthly credit card revenue.

Since smaller community banks are the ones that provide most small business loans these days, start fostering a good relationship with your local bank, making sure you earn their trust and goodwill. For example, you might get more personalized service at a small, local bank or credit union.

Does a side business really need a bank account?

At first blush, using the same account for your business and personal finances seems like the simplest, least expensive option. Just as with personal checking accounts, choosing a business bank account comes down to finding one that offers the right combination of features, benefits and cost. You may be able to receive merchant services from the bank where you have your business bank accounts. In fact, we think you should consider opening a merchant account with your bank. You may decide that’s the best route to take, but you might also realize that choosing a different merchant service provider offers advantages your current bank can’t match. A full explanation of merchant services covers a lot, but for starters let’s say that merchant services allow you to accept credit and debit card payments from your customers.

• This will outline each owner’s rights and responsibilities as well as how the business will operate.
• That’s especially true if you’re anticipating being in the market for a loan over the next few years.
• Navy Federal and USAA, for example, are two well-reviewed personal banks that don’t offer any business accounts.
• Keeping all of your business accounts in one place could help you simplify the way you manage business finances.
• She has worked with many small businesses over the past 10 years, from video game stores to law firms.
• Business banking fees range widely from free to thousands of dollars per month.

Here are seven steps to take when applying for a business loan from the bank. Marco Carbajo is a credit specialist and owner of Business Credit Insiders Circle. His expertise includes guiding businesses and start-ups in securing funding without putting personal assets at risk. He previously worked as a credit analyst for Credit Education Services. Business finance expert Imani Francies of FreeAdvice.com highlights transaction fees as one example. You may not anticipate many daily transactions right now, but if you sign up with a bank that imposed strict and costly limits, you may regret your choice later. You may benefit from utilizing these 10 deductions to lower your taxable income.

Types of business bank accounts

Their pace of business is also frequently slower, which can make a difference in certain industries. The https://wave-accounting.net/ Federal Deposit Insurance Corporation covers your deposits for up to $250,000 for any FDIC-insured bank.

• Your transaction volume can add up fast if you make a lot of sales each month, so lookout for low limits.
• Opening a separate bank account will help demonstrate the credibility of your business, keep your books organized, and ensure your business and personal lives remain separated.
• For example, for businesses heavily involved in many Spanish-speaking countries, BBVA is a more convenient option than, say, 1st Bank Yuma.
• The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities.
• You can also switch banks over time as your business grows and your needs change.

When opening a business, many business owners choose to set up a limited liability company or a corporation to limit their personal liability in the business. Having an LLC or a corporation separates your business and personal assets. But to keep this liability protection intact, you need to follow certain rules. Otherwise, you could be at risk of “piercing the corporate veil”—a situation where you could be personally liable for your business debts. After checking your credit report and ensuring that it is okay, it is time to research and come up with a list of banks that are viable to extend the type of loan you are in need of. Choose the bank that offers loans at low interest rates and offers the most flexible approval guidelines.

Digital debit cards

At the end of the day, most business checking accounts are fairly similar. What sets them apart is the financial institution that offers them, the services they offer, and how you plan to use your account. If you just want to run a small, solo business, a local bank or credit union is probably fine.