Every business runs on cash, so every business should have both a checking and a savings account. However, you don’t want to run your business using the family’s accounts. You should establish separate checking and savings accounts that are structured specifically for business. The basic functions of checking and savings accounts are the same, whether you are using them for your small- to medium-sized business or for your personal needs. Checking accounts are used to accept payments and to pay bills. Savings accounts are used to hold your money so it will gain interest until you are ready to use it. However, business accounts offer additional features and benefits specifically designed for business transactions.
If you are planning to open checking and savings accounts for your small business, then be sure to consider some of the unique features that you may need before you open an account.
A checking account is one of the few types of accounts available to both individuals and businesses, but there are a number of advantages to establishing a business checking account.
For one thing, having your business name on the checks gives your business more legitimacy; people prefer to know they are working with a business and not an individual. Maintaining a business banking account also helps keep personal assets separate from business assets. And having a business account helps you establish credit for your business, which is different from your personal credit.
Here are some considerations and questions to ask when opening a business checking account:
A business savings account is similar to a personal savings account in that it gives you a place to deposit your money where it will earn interest. However, there are a number of reasons to maintain a separate business savings account.
You also may want to have a place to set aside money for taxes or other purposes, such as rolling it into a retirement fund. One of the best reasons to use a business savings account is that the money is insured by the U.S. government, so your savings are secure.
However, there are some specific questions to consider when you look to open a business savings account:
You also have the option of going to a credit union. Naturally, we think that keeping your business accounts with a credit union has many benefits.
As a business, you become a member of the credit union. Since businesses are members, we work to offer the best terms for both savings and checking, including no minimum deposit to open an account, free online banking and remote services, free bill pay, and interest. Our accounts offer a guaranteed return and are insured by the National Credit Union Administration.
If you are considering opening a business checking or savings account, we encourage you to talk to an expert at your local credit union. They are members of the same business community as your company and will understand your financial needs.