Congratulations! You’re going into business for yourself-not anything to sneeze at, regardless of the economic conditions. Being an entrepreneur takes courage, self-determination and vision.
One of the primary questions new business owners have is what kind of bank account they should get. If you are incorporated as a business entity with the State and federal government authorities, your business is its own person. And that person needs a bank account to do transactions.
Reasons business owners need a checking account:
- your business has grown to where you have paid employees and an official payroll.
- you need a checking account to sync with your merchant account(s) in order to get paid by customers/clients.
- you need a separate account for your business to keep an accurate account of your revenue for tax purposes (and to prevent mixing it in with your personal money and spending it).
When shopping for a checking account, the stakes are higher than with a personal account. So you want to make sure you make the best decision possible.
Here are 4 things new business owners should look for in a bank account:
1) A business checking account without a minimum balance. When your account has a minimum balance, it can end up costing you more money in fees if you’re still on the come-up or lack superb accounting skills to ensure you don’t dip below that amount. Businesses have a lot of transactions and your minimum balance can get lost in the shuffle. So having no minimum balance can allow you more flexibility and peace of mind-not to mention saving you a potentially large amount of money in account fees.
2) A business checking account with a low monthly service charge or a $0 charge. This takes some digging as these kinds of accounts are least profitable to banks and won’t be widely advertised to the public, but they are there. To find the best checking business accounts without a monthly service fee (or a low one) near you, click here.
3) A business checking account at a local bank. As we discuss in our article, “Big Bank vs. little bank: Are big banks safer?” local banks are more invested in local businesses and are more likely to offer them loans and better deals than major Wall Street conglomerates. Local business checking accounts with lower or even $0 monthly service charges do exist. A minimum opening balance is typically $250 but there are some that are even lower. You can find one of these accounts at a local bank by just plugging in your zip code and clicking here.
4) A business checking account with a low minimum opening balance. Business accounts require a higher amount of money to open than personal accounts. When first starting out with a new business, money can be tight and putting in a large amount of money can be difficult. It may even dissuade you from getting a checking account at all-even when it looks like you need one. A typical minimum opening balance is $250 but there are some banks that offer accounts for as low as $100 (or even lower). You can find a business checking account with a low minimum balance by clicking here.
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