What is a Business Bank Account?

If you are a business owner or entrepreneur you may be on the lookout for a bank account that is just for your business. A business bank account is similar to a personal checking or savings account, but instead of holding the name of an individual on the account it is the name of the business which will do transactions through the account. It can be used for small businesses or large business operations.

It helps you to keep your business expenses, income, and reports separate from any personal account and gives you other needed tools to run a business that you can’t find through a regular account. A business bank account helps you and your business find financial stability, so let’s dive into the components of a business bank account.

Key Features of a Business Bank Account

Separate From Personal Finances: As mentioned earlier, one of the most distinct aspect of a business account is that is is separate from any personal finances. This makes it easier to file taxes, report income, and track business income and expenses.

Maintain Business Identity: By setting up a business bank account under your businesses name, you are able to maintain your brand identity financially. This helps you to maintain and build trust with your customers and suppliers who often participate in transactions with your business.

Business Account Options: There are many different types of business bank accounts, including checking, savings, and merchant services accounts. Each of these offers unique features that cater to the financial needs of a business. You can learn more about them here.

Access to Business Loans: Having a business bank account often makes you eligible for a business loan or line of credit if you need it. Oftentimes, it is a requirement to have a business account with at least some credit history to be considered for a loan.

Number of Transactions: Business accounts are created with the capacity to handle more day-to-day transactions than normal personal accounts. This is essential as you want to be able to offer retail transactions that happen frequently in order to build your business.

Business Payment Solutions: With a business account, you can access features like online bill pay, mobile payment, wire transfers and more. This helps you get money where it is needed almost immediately, strengthening your relationships with employees, customers, suppliers, and more.

Extra Services: Because a business needs unique financial help, there are often unique financial services that are offered to business like payroll, or personalized help through a representative.

Key Considerations When Selecting a Business Bank Account

There are plenty of things to consider when you choose the right business bank account for you and your business. In order to help you make more informed decisions, here is a list of several factors you may consider as you look into a business bank account and what it entails:

Account Features: Does this account offer services you may need for your specific business requirements like online banking, mobile banking, or bill pay? You can also look into what additional features they offer. Do they help with payroll, track expenses, or integrate well with any other services your business needs?

Interest Rate: If you expect your business to maintain a balance in a borrowing account, consider the interest rate that the account offers. Different business account types (checking, savings, money market accounts) may offer different interest rates or no interest.

Account Fees: What fees will this account charge? Do they have transaction fees, overdraft fees or ATM fees? Consider which fees may impact how your business operates to ensure you are not losing money to fees. Try to find accounts that offer fee waivers.

Location and Proximity: Will you need to go into the bank or credit union frequently? Will you need ATM access often? Consider the location of the bank you want to bank with if these things are important to your business. Also consider a nation-wide bank if you plan to do frequent business traveling.

Transaction Limits: Does the account have a daily, weekly or monthly transaction limit? Does their limit work well with what you expect from your business transactions?

Incentives or Bonus Offers: Some accounts may offer bonuses or incentives to new customers. The thought of getting some extra cash, waived fees or more may be enticing, but be sure to look into the terms and conditions associated with the incentives.

Customer Support: If you need assistance, what avenues are available for you to contact them? Do they offer phone, email and live chat support? Find an institution that provides you with the option that is best for your business.

Customized Support: Does this institution offer dedicated business account specialists who can help you and provide more specific help with your financial needs? Having access to these types of experts may be helpful if you begin to face financial challenges with your new business.

Always keep in mind that the right business bank account will help you get off on the right foot with your business and provide you with valuable financial freedom. A business bank account is a crucial tool for managing all the financial aspects of your business, and having an understanding of what your account offers, as well as where you can find expert help will be essential.