Want To Open a Business Bank Account? Do This! (2023)
Are you looking to set up a business bank account? Are you looking for a way to understand opening a business bank account? Do you want to know about the different types and perks of bank accounts? Do you want to choose the perfect business bank account that suits your needs best?
If yes, you came to the right place! We will be showing you all the options you have when choosing the best business bank account that fits your needs.
We will also walk you through the steps you must follow to achieve that business bank account as soon as possible!
Setting up a business bank account can seem difficult when you think about it but it’s rather easy. While it’s necessary for small businesses, setting it up is not that difficult. Business accounts can be used by all sorts of businesses as well, so if you’re thinking that you need to have a specific kind of business to set up a business account then throw this thought out of your mind!
Business accounts help all sorts of entrepreneurs, from freelancers to heads of corporations, manage all sorts of company’s finances and even help them pay their taxes by simplifying the method. Applying for a business account can be done in a matter of minutes, you can do so too if you possess the right documents and the right information about yourself. Follow the following steps so you can open a business bank account for yourself as soon as possible and start utilizing its useful features.
What Type Fits Your Needs Best?
What most businesses should do, when starting, they should start with a dedicated business checking account and there are several other business bank accounts to choose from including,
- Business savings account
- Merchant services
- Business credit cards
All these different kinds come with their own purpose and perks, let us investigate them:
Business Checking Accounts:
Business checking accounts are best for everyday use, and they include monthly transactions, ATM access and account and incidental fees so keep these things in mind when choosing the right type of business bank account for yourself.
Business Savings Account:
Business savings account utilize the perk of Long-term savings and some other things to take into notice are that they include, APY, Account fees, and a minimum balance required to get interest.
Merchant Accounts:
The best thing about these accounts is that they accept debit and credit card payments, now they also have bundled merchant services for you to investigate, while having a low transaction fee they also take some additional fees to get your account setup and running for your business.
A crucial point to acknowledge here is that you need to open a business checking account in order to open a merchant account, which you can then use to accept debit or credit card payment so it’s kind of like a branch of the business checking account that lets you further utilize the perks of a business account.
Opening a Business Checking Account:
You might want to start with a single business checking account and as soon as you start getting bigger payments and start to better the financial situation of your business, it’s only a matter of time that you get Mutiple business bank accounts, and you can then utilize each of them by giving them a new purpose and utilize each of their perks as a business man.
For example, some business keep their payrolls in separate bank accounts to keep it organized, you could do the same once you open multiple accounts, other than that people leverage high-yield savings to save for emergency purposes or even other long term goals that require a specific amount to get going, and many use these bank accounts for saving to expand your present business.
Once you make your business achieve a certain amount of growth, you can do whatever you like with the new business bank accounts you open, they will become a big help once you utilize their perks and use them the right way.
Criteria Of Choosing a Bank Account For Your Business:
Different business accounts have different features, limits imposed and different advantages or perks for you. Research these types and choose the perfect one that fits your requirements as a businessman looking to open a bank account. You can do this by comparing the perks of all the options you have and consider the following factors before you decide on this matter:
- What are the monthly fees they demand?
- What is the minimum balance requirement of said bank?
- Does it include free transactions?
- Does it have ATM access?
- Does it have the wiring, transfer or the payment capabilities that you’re looking for?
- Does it have incidental fees? If it does how much are they?
- Additional features using bill payment, invoicing and additional accounting software integration to make the experience as smooth as possible and to reduce the number of possible issues as close to zero as possible. And what other kind of tools do they utilize to make your experience better?
Use these points to satisfy yourself that you’ve made the right choice and move forward to the next step once you’ve researched the best bank account for yourself.
Gather Your Personal Information And Get Your Necessary Documents:
The information you must bring with you relies greatly on the kind of bank account or the institution that you’re visiting, investigate what that specific institution demands from its service consumers and then take that information and those documents with you. You should at least expect for them to demand the following documents or information:
- Business information
- Personal information
- Business information documents
- Any organization or partnership agreements that you have yet made in your business.
File The Account Opening Application:
Again, this will depend on the institution and the account of your choice, you can apply online, or visit the place and apply in person, or do it over the phone as well. Applying online is a lesser hassle than applying in person or on the phone with one of their employees.
Applying online lacks, the personal touch and you won’t be able to get the most out of this experience as well. If you don’t get easily satisfied in such cases, go for the personal experience and visit the place, file the application and ask whatever question you have in mind about their services. This will clear your mind and give you satisfaction that you could never have gotten if you applied online.
Make Your First Deposit:
Most of the time, you bank account will be opened without putting a single penny in, but some business checking accounts do require its users to fund it to a certain extent and they do require an opening deposit to get you up and running, this can range from anywhere between $25 to $100 depending on the institution you choose.
That being said, $100 is never the maximum amount you can deposit as a business account holder, your deposit can range from $1000 to $25000 depending on the account. Make sure that you understand that you might not even have to deposit anything and even if they do require you to deposit a certain amount, it won’t be significant and will range from anywhere between $25 to $100.
Business accounts that don’t require initial funding to get you started will require you to deposit a certain amount till a specified date or within a specified timeframe, otherwise your account will be declared in-active by the institution. You should never deposit all your business’s assets at once. Most business account holders place their possessions in more than one account and refrain from depositing for newer accounts. Other accounts will flag large deposits which will then be followed by large transactions and can be declared as fraud.
Setting Up Your Business Bank Account:
Now that you’ve opened your business bank account and it’s ready to be utilized, you can set up your account in no time at all.
- The first step will be to download the bank’s mobile application and then sign up or login.
- Now, connect your newly made bank account to that application and to any other relevant tools you like.
- Many business accounts provide direct integration with popular accounting apps and software such as QuickBooks, Xero or Gusto.
Add authorized users and set appropriate security if necessary, including permissions and alerts.
Now establish recurring payments.
Once you’ve completed these steps your new debit card will be shipped to you in a matter of 10 business days and if your bank offers these options, you can order checks and acquire any additional debit card you like such as employee debit cards.
What Do You Need To Open Your Business Bank Account?
This information is very important when it comes down to opening your business bank account, make sure you give it a thorough read and then bring each one of these things with you,
- The first thing is obvious. You’re going to need your articles of incorporation.
- Second thing you’re going to need, you’re going to need your EIN number. And I suggest that you print out multiple copies of both your articles of incorporation and the paperwork that you, the IRS, gave you to print and bring those copies to the bank.
- When you go to the bank, we’ll make it easier on you and make it easier on the business banker because as you know, business bank accounts are time-consuming when opening them up.
- You would need your driver’s license or state ID. And if you go on a PNC, you will also need a credit card because this is strict on their KYC which is know your customer. They are trying to cut down on all types of people opening fraudulent bank accounts. So, make sure to bring a credit card and bring a personal credit card with the highest limit because when you open the business checking account, they swipe it, which might make your limit visible so make sure you take the one with the highest limit.
- And of course, you would need your funds to open the bank account, but what’s most important, what you would need when you go to open your business bank account. Make sure the look up your NAICS code before you go (if you live in the USA). And for those who don’t know what this code is, it’s the North American Industry Classification System and those numbers classify what industry your business is in.
Sometimes they automatically put in what they think your NA ICS code is, so you should already look up your code. Have it ready written down and present that to your business bankers so they don’t classify your business as a risky industry. Because if they do, they might not be able to open your business bank account.
Conclusion:
There are many steps to follow when it comes to opening a business bank account, but what are these steps? Well, they have been given above in detail for you to follow. If you want to open up a business bank account, you should know that it’s not as much of an easy task if you don’t understand the process, there are many things you should take into consideration before reaching out to your favorite bank and asking them to open a business bank account and all of these things have been given in complete detail including what type of business bank account you want to opt for and how to choose the right one for yourself.
Once you investigate what these steps are you will realize that the institutions will require you to bring certain information along with you to complete the process which has also been provided above. And only after you go through this entire process will you receive the business bank account of your choice.
