5 Important Reminders When Opening A US Business Bank Account

photograph of buildings with well known banking brand logos visible to illustrate opening a US business bank account
Need to open a US business bank account? As a startup owner, separating your personal and company finances is an absolute must. Check out these top tips:

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When establishing a new business, it’s vital that you learn to handle your finances properly. For example, making sure that you don’t mix your personal and company money is important. In fact, opening a US business bank account is a must.

Sure, it may initially be unavoidable to use your personal account when you’re just starting out. However, you have to know that having a dedicated account for your business makes money management much easier. You get to protect your personal finances and stay legally compliant at the same time.

In addition, you might also want to consider the following benefits:

Advantages of having a US business bank account

It lends instant credibility to your business

People tend to trust startups with their own business accounts because it shows seriousness and professionalism. This is because some find it hard to trust a business that uses a different name for its payment system.

With a business account, customers are able to pay you using credit cards, checks, and other payment methods.

It offers greater protection

With a separate account, your personal assets – such as your house, vehicle, and other properties – remain protected if your business gets into debt.

photograph showing money and padlock signifying business bank account security
Image source: Unsplash

According to the US Small Business Administration:

“Business banking offers limited personal liability protection by keeping your business funds separate from your personal funds. Merchant services also offer purchase protection for your customers and ensure that their personal information is secure.”

It’s a requirement for loan application

Along with your updated financial statements, tax returns, and other requirements, a US business bank account is often necessary for a business loan application. You’ll have little to no chances of getting your loan approved if you do not have a separate account. Plus you get to establish a line of credit for your business, which may be necessary if you ever need extra funds in the future.

It simplifies business accounting and taxing process

Just imagine the nightmare you’ll experience come accounting and tax season if your finances are mixed. A business account allows you to eliminate that type of headache. You get to maintain orderly records since your personal and business funds and expenses do not intermingle. You won’t have to spend long hours combing through your records.

It allows you to monitor your progress

Another great benefit of having a dedicated account is that monitoring your business progress will be pretty straightforward. You will be able to observe and measure your financial growth without any hassle. You can check on your records as often as needed and make appropriate plans for further improvement. 

 photograph showing person using a bank card to illustrate business banking
Image source: Pexels

What to look for when opening a US business bank account

Banks offer different perks and features to attract business owners. You might feel tempted to open a US business bank account with the same bank you use for your personal account. This may seem like the easiest choice, but it’s always better to do research before making a final decision.

Here are some factors to keep in mind:

1.  Introductory offers

At times, banks try to attract business owners to open an account with them by providing attractive introductory offers. 

In a Business News Daily blog, we read:

“Some offers include bonus cash for making an initial deposit of a certain sum and maintaining the balance for a certain period of time (typically a few months). Others offer lower fees to businesses opening new accounts.”

2. Minimum balance requirements

Banks generally require a minimum deposit amount when you open a US business bank account. On top of that, they may likewise require maintenance of a minimum monthly balance. Otherwise, you may end up having to pay them a fee.  

3. Affordable fees

Rates, fees, and features usually vary from one bank to another. As such, you’ll want to look around so you can compare which is best for your business.

Gather information about how much banks charge on their monthly maintenance fees, overdraft fees, and wire transfer fees, among others. Also, try to see if it’s possible to waive certain fees and how this can be done.    

4. Interest rates

Similarly, you’ll want to go with a bank that has good interest rates. Interest makes it possible for you to grow your savings little by little. So it’s really a great idea to check out which bank has the best possible rates out there.

5. Location

Lastly, you should likewise consider the bank’s location. This is specifically important for business owners who often need to do in-person banking transactions.

Some questions you might want to ask yourself should include:

“Are you looking for a bank with a lot of branch locations you can visit? Is it important that you have access to an extensive ATM network?”

Of course, another option for you would be to choose online banking instead.

Conclusion

As you will learn during your research, there are different options available for business accounts namely:

  • checking account
  • credit card
  • savings account
  • merchant services account

Your best bet, of course, is to have a conversation with your top choices. Feel free to contact banks by calling them directly if you have any questions. They’ll be glad to help you out. Other than that, you may also work with professional bank support services to save time and hassle.    

Featured Image: Photo by Expect Best

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