You can open a business bank account if your business is now ready for taking orders or spending on business expenditures. Banking for business will keep you protected and complying with the law. It also has advantages for your clients and staff.
Why choose banking for business
You should create a business bank account as soon as you start dealing with money through your business, whether it be business expenditure or taking money from clients.
A checking ,savings ,merchant services, and a credit card account are all common business accounts. With a merchant services account you can make transactions with credit and debit cards from your clients.
Banking for business will acquire your federal EIN i.e. Federal Tax Identification Number. It is used to recognize a corporate entity and is also known as an Employer Identification Number (EIN). You can apply for free online.
You can get access certain benefits in a business bank account that a normal personal bank account does not provide
Perks of banking for business
Protection: By keeping your business and personal finances separate, commercial banking provides minimal personal liability coverage. Purchase security is also provided by merchant services, which ensures that your customers’ personal information is kept safe.
Professionalism: Payment by your clients can be made with credit cards or checks made payable to your company rather than directly to you. You’ll also be able to delegate day-to-day banking duties to workers to your staff on behalf of the company.
Preparedness: A line of credit for the corporation is generally included in business banking. This can be utilised in an emergency or in case your company requires new equipment.
Power to purchase: Credit card accounts will assist your firm in making significant first purchases and establishing a credit history.
Look for a low-fee account with great perks
Some entrepreneurs create a company account with the same bank where they keep their personal accounts. The amount of fees, rates, and options will differ from one bank to the next, so shop around to ensure you get the greatest rates and perks.
When creating a company checking or savings account, keep the following in mind:
- Introductory offers
- Interest rates for lines of credit
- Interest rates for checking and saving
- Early termination fees
- Transaction fees
- Minimum account balance fees
When creating a merchant services account, keep the following in mind:
- Discount rate: The fee payable for each transaction completed.
- ACH daily batch fees: Fees incurred when credit card payments are settled for the day.
- Transaction fees: The fee that is applied to each credit card purchase.
- Monthly minimum fees: Fees levied if your company fails to fulfil the minimum transaction requirements.
- AVS: Address Verification Service fees
Payment processing firms are becoming a more attractive option than standard merchant accounts. Extra functionality, such as accessories that allow you to take credit card payments using your phone, is occasionally provided by payment processing firms. The cost categories you’ll need to think about are comparable to those for merchant services accounts. If you discover a payment processor you like, keep in mind that in order to receive payments, you’ll need to link it to a company bank account.