Why Choose A Business Bank Account

If you’ve been struggling to open and start using a personal bank account, particularly for your business, you're on the right track to scale higher. Firstly, let’s look at why you

If you’ve been struggling to open and start using a personal bank account, particularly for your business, you're on the right track to scale higher. Firstly, let’s look at why you need a business bank account.

A business bank account is often used for different business transactions, such as the payment of vendors and employees and accepting payments from prospective clients. So, finding a rightful bank account isn’t a challenge, especially if you know what you're seeking and which question to ask.

Other business empires aren’t allowed to open a business account, which makes them enjoy unlimited personal liability. Here we'll concentrate on the small business leaders who understand why they should open a business bank account and how to find the best business bank account for small businesses.

What is a business bank account for?

A business account is used for personal and business finances.  But opening a business bank account separate from your finances is an ideal step because it allows you to track your expenses flawlessly and makes your business outlook appear professional.

Further, it lets you enjoy tax deductions and credits, eventually boosting your business process. But remember, fees, amenities, and services offered by business account banks vary from bank to bank.

In addition, business accounts have different banking options.  And that’s why you need to find one that matches your business needs. In this segment, we'll highlight factors to consider when looking for the best business bank account for LLC.

Let’s get started!

When should I open a business bank account?

According to U.S Small Business Administration statistics, the right time to open a   business bank account is when your business has acquired an employee identification number from the Internal Revenue Service. The organization requires that all businesses in the United States have a business bank account.

That rule applies to almost any business, either partnership, corporation, or sole partnership. Whether it’s a sole unincorporated or partnership, the right choice is to have a business bank account.  The account can help you get business loans easily and quickly.

Lenders often disbursed the loans to individuals or businesses with a business bank account, so it's time to do so if you haven't opened one. However, you may think that you don't need a business loan, but a circumstance might push you to have one, especially if you want to propel your business growth.

The good news is that when you’ve a business bank account, it’s easy to secure a loan and avoid rejection.  Also, if you deal with merchandise services that require credit card payments, consider having a business bank account.

Moreover, if you're running a retail business, you must apply for a business bank account to do your transactions via your point-of-sale system.

Why do I need a separate business bank account?     

Besides complying with Internal Revenue Service, having a business bank account is more advantageous and beneficial than using a personal bank account to manage your finances. The account also comes with various protections for business, like protecting your assets by carefully separating your business and personal transactions and the ability to take advantage of credits and tax deductions.

The following are the benefits of opening a business bank account:

·       Financial protection for both business and owner

The general rule is to keep all your business finances from personal by creating a business bank account that protects your personal and business funds. For example, if you're operating an LLC business, your assets won’t be used to cater for debts even if your business can't settle them within a stipulated timeframe. Further, your credit score won't be highly affected when you become bankrupt

·       Bank account offers a structured and organized way to handle expenses.

Monitoring expenses, tracking spending, and even avoiding impulsive buying define the success rate of any competitive business. Ideally, it also allows you to separate your business bank account from your account without much hustle. Besides, it lets you produce trusted statements and reports that reflect your empire's current status.

·       Reduces tax deployments

If you want to take control of your business tax deductions without affecting an audit, consider separating your business expenses from your one.

·       Professionalism

A business bank account is the best account option because it allows clients and customers to create checks for their prospective businesses flawlessly. So, as a business owner, you won't be paying your debit or credit, especially if you have a business bank account. And that means that you’ll establish a more professional business.

What are the types of business bank accounts?    

Like any other bank account, business bank accounts have different categories. These include savings accounts, cash management accounts, and traditional checking accounts. These peculiar accounts have different features, like:

Best business checking accounts

The account allows you to manage all basic transactions involving your business flawlessly. These activities include receiving or transferring funds electronically, withdrawing or depositing money using a business debit card, and drafting checks to pay vendors.

Other banks provide interest business checking accounts.  Business checking accounts have the same features as regular business checking accounts, but they offer annual percentage yield to their trustworthy and reliable customer.

Some banks offer free checking accounts to startups and small businesses. This kind of checking account is suitable for individuals or businesses seeking to start their business right away or operating under insufficient funds. However, it's limited to the number of transactions you would like to have at go. In addition, free checking accounts come with strict minimum deposit requirements.

Business savings accounts

A business saving account always is always linked to a business checking account. The account allows you to set aside a portion of your business income and adds interest to it. You can also separate business savings from the working capital to achieve financial management.

Once you open a business savings and checking account, you can get a financial cushion during an emergency. Also, you’ll have enough money to cater to your expenses without invading your personal financial reserves. These accounts are offered by credit unions and some bricks and mortar checking.

Cash management accounts

A cash management account is the best online business bank account and the best free business bank account that offers banking services like savings, investments, and checking. Plus, it offers a high-interest rate on savings compared to the credit business and traditional brick-and-mortar banks.