There are many checking account options available for small businesses, but it can be hard to find a checking account that meets your unique needs. Here's how to make the smart decision for your company.
To meet your financial needs and goals, it may make sense to open multiple checking accounts for your business to help customize your banking experience.
Do I Need a Business Bank Account?
Before you consider opening multiple checking accounts for your business, you may wonder if you even need a separate business bank account. Even if you are just starting out, using a personal bank account for business has its pitfalls. Day-to-day, it may be difficult to accurately budget for both personal and business expenses. Having a separate business account can also allow you to write and receive checks in your company’s name. Long term, keeping your accounts separate will help during tax season, ensuring you easily identify business expenses for deductions.
Opening Multiple Business Checking Accounts
After you’ve separated your personal and banking accounts, you may still want to assess how many business accounts you should have. Multiple business checking accounts can help you keep your budget organized. While tools such as budgeting software can be helpful to keep track of expenses, opening additional checking accounts more actively delineates your finances for specific purposes. If you’re thinking of switching banks, opening a second or third account can let you actively learn more about a new bank. You’ll be able to learn more about what accounts they offer, associated terms and fees, and if there are benefits specific to existing customers such as rate discounts. Plus, you could be building strong personal relationships that could help with future banking or borrowing needs. Be careful, however, to note any fees or minimum balance requirements to ensure that maintaining multiple accounts makes financial sense for your company.
The key thing to remember when considering opening multiple accounts is that each account should have a specific purpose. These could include:
Payroll Bank Account
Consider creating a business bank account specifically for payroll expenses. This could help you avoid unintentionally using funds for other expenses and not being able to make payroll.
Checking Account for Taxes
Have you been planning for your quarterly tax expenses? Similar to having a dedicated payroll bank account, designating an account for taxes could allow you to thoughtfully budget for known expenses throughout the year.
Interest-Bearing Account
If you know you will have cash sitting idle without many withdrawals, consider looking for an interest-bearing account to support the growth of your company. This could be a business checking account, or a business money market account.
Creating a Business Bank Account
Whether you’re opening your first business account or considering opening a second or third account, creating a business bank account is easy with the help of a dedicated business banking specialist. Compare business checking accounts to discover which account (or accounts) will meet your needs, and then get in touch to get started.
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