Not every type of bank account is created equal. It is essential to have an appropriate bank account for your business as it makes payments to your vendors and collects deposits from customers. There is no one right type of business bank account. Many types of business bank accounts exist. It depends on what kind of business you run, its size, and its complexity.
Tip: Hire a bookkeeper, so he helps you keep your finance in order.
Types of Business Bank Accounts for Small Businesses
Having a bank account is not an option for your business. It’s a requirement. Every business should have its own dedicated bank account. Types of business bank accounts include:
- Business Checking Account
- Business Savings Account
- Merchant Services Account
1. Business Checking Account.
It is the most basic option you can consider to get started as it has the fewest limitations on what you do with your money. With this type of business bank account, you can have a place to put your money, deposit and withdraw cash, make payments, and transfer funds to other bank accounts.
It’s like you have a personal bank account. You can frequently access your funds whenever you want. Add money and withdraw cash as much as you want. You can also manage your transactions through a mobile banking app. You can also get a debit card for ATM withdrawals. Plus, they tend to be cheap.
2. Business Savings Account.
If you want to earn more interest on your funds than checking accounts do, you should consider opening a business savings account. As it is a savings account, I don’t need to tell you the basics of a business savings account. But business savings account can restrict access to your funds as you can only perform six transactions per month according to federal regulation. Don’t worry– this regulation no longer applies, but many banks still follow this rule. So, it depends on your bank that how it limits your transactions. Another con is that you are not able to write checks from your saving accounts.
Tip: In order to operate profits, a business savings account is a better fit than checking accounts.
3. Merchant Services Account.
It’s the best choice of business bank account for small business owners. It accepts credit and debit card transactions. When a consumer makes a payment to your company, the money goes into this account first and then transfers to other business bank accounts.
Before opening this account, you must know the fees associated with it. It includes application and setup fees, per-transaction, and monthly fees.
Best Banks to Open a Business Bank Account for Small Businesses in 2021
You choose a bank for your business that helps you track your money easily. The best banks for opening a business bank account in 2021 are:
- Best Overall: Chase
- Greatest for Online Checking and Savings Accounts: Axos Bank
- Best for Easily Access from Anywhere and Cash Deposits: Wells Fargo
- Supreme for Digital and Free Business Checking: BlueVine
- Best Credit Union: First Tech Credit Union
Common FAQs related to a Business Bank Account
Why do we need a Business Bank Account?
A business bank account helps you stay legally compliant and protected. It also provides benefits to your employees and customers.
What are the other types of Business Bank Accounts except for checking, savings, and merchant services accounts?
- Business Certificate of Deposit (CD) Account
- Business Money Market Account
- Interest-Bearing Checking Account
- Cost of Goods Sale
- Accounts Receivable
- Credit Card Account
- Expense Accounts
How do I open a Business Bank Account?
You need some kind of documentation it includes your employees’ EIN (Employer Identification Number), SSN (Social Security Number), articles of organization, and your business license.
Can I use my Business Bank Account for personal?
Yes, you can. But, it is better to keep it separate from your finances.
How many business banks should I open?
There is no limit on that. Open as many you want to.