If you‚Äôre starting a business, one of the first steps to take is opening a business checking account. Being able to make transactions and deposit funds is an essential component of actually doing business, after all.
Every business owner will need different things from their checking account, based on factors like how many transactions you make per month and what kind of minimum balance you can manage. However, these are the basic business checking account features you need to look for:
Since finding the right account can be a chore, we‚Äôve compiled a round-up of the best business checking accounts that are currently available. Every month, we review business checking account rates using data from another LendingTree company, DepositAccounts.com, a database of offerings at more than 17,100 banks and credit unions. We sorted the products by APY, then eliminated institutions that were not available nationwide and did not meet the five criteria above.
To make the cut, the account needed to have minimal fees, a minimum of 50 transactions per month and the option to waive monthly fees if certain requirements are met. While offering an APY wasn‚Äôt a requirement, it was taken into consideration when developing this list.
At first glance, business checking accounts versus personal checking accounts might seem fairly similar. But if you take a closer look, you can understand the key differences. While every account has its differing features, personal checking accounts usually have:
Meanwhile, business checking accounts often have:
If you‚Äôre a business owner, you might be wondering why you even have to open a checking account separate from your personal one. After all, personal checking accounts tend to have lower fees, higher APYs and better features. Why not just skip opening one and ‚ÄĒ when it comes to your checking accounts ‚ÄĒ mix business with pleasure?
There are several reasons why you should keep your work and personal checking accounts from co-mingling. First and foremost: If you operate your business as a legal entity that is separate from you ‚Äď say, as an LLC ‚Äď you‚Äôre legally required to keep your personal and business finances separate. Opening a business checking account is the simplest way to do that.
Another reason why you need a checking account for your business is to protect yourself. If you have structured your business entity as a corporation or an LLC, and you have a separate checking account for your business, you and other shareholders‚Äô personal assets are not likely to be seized for damages your company is obligated to pay when filing for bankruptcy.
There are a number of other benefits associated with maintaining a business checking account, aside from the obvious ones of following the law and protecting your personal assets. Those benefits can include:
When opening a business checking account, you need more than just a spiffy company name and logo. You‚Äôll typically be required to present the following documents:
Opening a business checking account might be one of the first, big business decisions you will make as an entrepreneur. Make sure it‚Äôs an informed decision: Do your research, come with questions and be confident about the account you are opening before signing on the dotted line.