Opening a Business Bank Account
Part of having a business identity is to keep your business finances separate from your personal finances. The Internal Revenue Service (IRS) requires it. There's just no better way to do that than to open a business checking account.
While free business checking isn't as common for business as it is for personal accounts, some banks now offer it. I switched to free business checking after I got tired of paying $35 for my low-volume checking account at a competing bank. And, while you probably won't earn interest in your business checking account, it can help you establish credit for your business.
Business Bank Accounts and Credit Unions
Many credit unions also offer business accounts, typically at lower rates than commercial banks. In some states, you don't have to be an employer or a member of an organization to join. You only have to be a resident in the state where the credit union is chartered.
Comparing Business Banking Fees
While you're comparing financial institutions, don't forget to include the cost of checks and endorsement stamps in your comparison.
Some banks offer low or no fees, only to stick you with a ridiculous fee for your first set of checks or gouge you on an endorsement stamp.
More Business Banking Accounts
You may also want to establish a savings account for your home business in order to earn interest on accumulated funds that you may need later to pay bills, such as your estimated taxes. Once you've established a working relationship with your business banking partner you may also want to apply for a credit card in your business name. A business credit card can help when you're short on funds and suddenly need equipment, software or inventory.
As you extend your relationship with your business banker you'll have a source to contact in the event your need to borrow money to run or grow your business. Business bankers may also offer other valuable services, such as credit card and payment processing for your small business.
More in the Business Identity Series
- 8 Steps to Your Business Identity - Introduction & Overview
- Brainstorming Your Business Name and Tagline
- Address and Phone Numbers for Your Home Business
- Checking into an Employer ID Number with the IRS
- Creating Your Business Logo
- Ordering Your Business Cards
- Creating and Ordering Your Business Stationery
- Establishing Your Business Website