Opinions expressed by Entrepreneur the contributors are theirs.
When building your startup, choosing the right bank and business checking account can be difficult, especially if you have limited business experience. You need a bank account that not only meets your current needs, but will grow as your needs change as your business expands.
You may be wondering if you need a business checking account. While a personal checking account may meet your needs for your basic day-to-day business activities, you need to consider whether you need a business loan in the future or want to keep profits in a cash account. saving.
Your new checking account can be the start of your banking relationship, so you can begin to build goodwill and trust. However, if the bank is important, the characteristics of the current account are also essential. So here we will explore how to choose a business checking account for your startup.
Consider what you need from your bank
The first thing you need to consider is what you need from your bank. Are you just looking for a checking account or do you also need a small business loan? There are many banks that not only offer a variety of business checking accounts, but also excellent business product lines such as business loans and lines of credit, business credit cards and tax advice.
Although you may be looking for a checking account to handle your checks and handle customer payments, you may need a line of credit or other products in the immediate future. So take the time to think about your immediate and potential future needs to see which banks can meet your requirements.
Once you have a short list of things you need from your bank, you can start comparing offers from different banks both in your area and nationally. If you’re considering multiple banks, you can talk to their customer support team and get product information or even schedule a meeting to discuss your needs.
However, if your startup only requires basic account services, you may want to consider online banks. These tend to offer various products with minimal fees. The downside is that you don’t have face-to-face interaction, and depositing money can be tricky.
Related: 5 signs it’s time to switch banks
Considerations for Choosing a Business Current Account
1. Location restrictions
Even if you’re not looking at an online bank, some brick-and-mortar banks impose location restrictions on certain accounts. If you’re considering opening a business checking account with very low fees, it’s worth checking to see if it’s online only.
Depending on your business, you may need to speak to a bank representative in person, pay cash, or send certified checks. In these scenarios, having a corporate checking account that doesn’t have branch access can be a problem.
2. Digital tools
Most modern startups benefit from digital tools like mobile deposits and digital bill payments. It is therefore worth evaluating which digital tools are offered with the current account.
Many banks and financial institutions have an app that lets you manage your account on your mobile device. Be sure to check the reviews of the accompanying app to see if there are any potential issues.
3. Fees
As with a personal checking account, the fees for your business checking account can add up quickly. For most startups and small businesses, every penny counts, so it’s crucial to check the fee structure of your new checking account before signing up. If your bank offers fee waivers for the monthly maintenance fee, be sure to check the criteria to make sure you can meet the minimum balance needed to waive it.
4. Relationship Benefits
Many banks offer attractive perks, such as fee waivers and preferential rates if you link multiple accounts. So, it’s worth checking to see if the bank that holds your personal checking account offers relationship benefits if you open a business account.
You may find that your existing bank will provide excellent account options and since you already know and like banking, you can feel confident with your new business checking account. On the other hand, if there’s no benefit to having the same bank for your personal and business accounts, don’t feel you have to stick with them.
Related: 5 things you need to have to open a business bank account
5. Additional debit cards
When you have a startup, you will have many administrative tasks that will keep you busy on a daily basis. It can therefore be very convenient to provide your trusted team members with a corporate debit card.
This means you won’t need to micromanage essential purchases or deal with annoying refund requests.
6. Company Savings Accounts
Another important consideration is whether the business checking account comes with a savings account or a compatible savings account. Although some business checking accounts bear interest, you can still have some start-up capital that would be better in a savings account.
A compatible savings account would allow you to keep your funds in case of need. Some banks even facilitate automatic transfers. This will transfer funds from your savings account if the current account balance reaches a certain threshold. This is a great feature because you don’t have to worry about being overdrawn or being denied payments, but you can still earn a higher interest rate.
7. Additional Resources
Finally, you should check whether your new professional current account gives access to additional resources. Many banks enjoy the challenges of running a startup and offer help and advice. It could be something as simple as a learning center that offers live webinars, informative guides, or access to a merchant banking manager.
8. Business or Personal Chequing Account
There are several good reasons to maintain a separate checking account for your business if you have one. According to the SBA, business banking provides some personal liability protection by separating your personal funds from those of your business. Check writing and debit cards are features that both personal and business checking accounts can provide.
A business checking account, however, might offer benefits that a personal checking account does not. While some personal checking accounts can be opened for as little as $1, depending on the bank or credit union, a business checking account can cost $500, $1,000 or more to open. Combining your personal and business transactions into one checking account, if you plan to do both, can make bookkeeping difficult and tax season a nightmare.
At the end of the line
Once you’ve started your startup, you’ll probably be thrilled to work on your core business, but the right checking account can be an ally or a hindrance. The right checking account will provide you with the tools and services your startup needs.