Opening a business checking account is easy once you know what is needed to open the account and which financial institution is right for you. All businesses, even home based business owners, should consider opening a business account in order to maintain separation between personal and professional funds.
1. Compare Financial Institutions
Before you open your account, you'll want to shop the financial institutions in your area first. Check out the financial institution you currently do business with for your personal accounts, and ask about any special rates you would receive for bringing your business account on board. In many cases, financial institutions offer relationship pricing where the more accounts you have with a financial institution, the more rate reductions on loans and rate increases on deposits you'll receive. You'll also want to compare fee structures between financial institutions, and determine if the bank or credit union offers ancillary products along with the account, such as a business debit card, on-line banking and bill pay.
2. Decide Which Business Account is Right for You
You'll find that most financial institutions offer a myriad of business accounts. From the small business account to an analyzed business checking account, you'll need to determine your needs and match your business requirements with the right account. For a home based company, a small business account is usually the right choice. Small business checking is typically a non-interest bearing account that requires a small minimum monthly balance. If your business is a more complex and you tend to have a high number of deposits, you may want to consider an analyzed account. It's best to arrange an appointment with the banker or credit union service rep to review your business needs and discover what the financial institution can offer to you.
3. Open the Account with Necessary Paperwork
Check with your financial institution before meeting with your banker to determine what you will need to open your account. Paperwork will depend upon your type of business ownership (and be specific to the account you want to open). Generally, you'll need to produce:
the previous year's business tax forms
your business EIN number
your social security number
any previous bank statements
Ask your banker plenty of questions about the account, such as what is the minimum monthly balance (in order to avoid fees), how can you access your account on-line and if the bank has a courier service to pick up weekly deposits.
4. Maintain Account On-line and in Person
Small business owners are a busy bunch, so having account access at the tip of your fingers is critical. Be sure you have on-line account access, and check your balance and activity at least once a day. The best way to access your account on-line is to enter your account number via the financial institution's website. If you are uncomfortable about using on-line banking, ask your banker about the financial institution's security certificate (however most banks provide a highly secure system). Additionally, if possible, establish an in-person relationship with your banker. You are forging a financial relationship with your chosen institution , so establishing a professional relationship with your banker or credit union representative opens doors and dialog for future financial forays.
A business checking account can help keep your home based small business on track and assist you in determining profits and sales. It's critical to establish a financial relationship with a trusted bank or credit union as you journey through your new business bond.