Getting A Business Checking Account

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Once you've started a business, the first thing you should do is get a business checking account. While you can theoretically continue to operate under your personal business account, a business checking account is important for a few reasons. Here's everything you need to know about the process.

What Do You Need to Get a Business Checking Account?

To open a business checking account, you first need to apply for a Federal Employer Identification Number (FEIN). An FEIN is a lot like an SSN: it identifies your business to the bank. This just ensures that your business is able to be held responsible for the account. Also like an SSN, your FEIN will be used to assign your business a credit score. 

Other than a FEIN, the requirements to get a business checking or savings account is going to vary by bank. Some banks are going to require that your business deposit a certain amount of money. Others may require that you be in business for a certain amount of time.

Some banks let you open a business checking account completely online, while others do require that you schedule an in-person meeting at one of their locations.

What Are the Advantages of a Business Checking Account?

There are actually a number of advantages to using a business account:

• Business accounts come with better support and more favorable rates. Banks like doing business with other companies. They tend to offer companies more benefits than individuals, including better interest rates. 
• Business accounts separate your personal and business funds. Co-mingling personal and business funds can make you liable for business debts. It can also make it hard for you to track your income and your expenses.
• Business accounts start to establish your business as an entity. By creating a relationship with a bank, you'll have an easier time getting bank loans or business lines of credit later on. 

For the most part, a business checking account is going to afford you some benefits from the bank, while also making it easier for you to manage your money.

Getting a business checking account is only optional if you're a Schedule C business owner or if you're operating an S-Corp sole proprietorship. Otherwise, it's really essential. You can contact your local banks and credit unions to find out more about the advantages of business checking accounts and the steps that you need to take to get one.

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27 February 2019