If you’re starting a business, I highly recommend opening a separate business account. Typically, people like to open it with a bank but consider opening it with a credit union business account. It’s a great option because you get low-interest loans, personalized service, and easy management of daily and weekly transactions. Another reason why you’d find it beneficial to open a business account separately is that they often come with perks that regular personal checking accounts don’t. You want to take advantage of any and all of the potential benefits of business accounts because opening a business can be a financially draining but rewarding enterprise if done right. Think about what plan works best with your business and choose accordingly. If you’re still even on the fence about opening a separate business account from your personal funds here are some of the perks you should keep in mind:
I know that you might be just starting your business, but make a separate business account. Most small business owners today, myself included, who made that decision will tell you the same. It’s not just to protect your business funds, but to protect your personal funds, too. Usually, banks and credit unions will provide some sort of personal liability protection to ensure that if there is a breach of your business account, that it won’t impact your access to funds and replace funds if there were unwanted charges. If you’re an LLC, then it would protect your liability more effectively because you’re not combining personal and business funds.
- Low fees, good benefits
This perk depends on the bank you choose to open the account with. It’s imperative that you shop around and don’t just opt for the bank that you have your personal account with. Shop around and see what’s out there. Preferably, you want to opt for a bank that gives you: high interest rates for a checking and savings account, and no transaction fees. When you open a credit card as a business you have a very high purchasing power that can be used to establish credit history for your startup. You can also use it to buy essential equipment for emergency needs.
- You can save money
Yup, you read that right. When you keep your personal and business finances separate, you can manage funds more easily during tax season. If you’re a business, you can deduct expenses from your Taxes more easily than if it were a personal purchase. It will also make it easier for your accountant and your tax person, if your business purchases were in a separate account or file so that they can get you more deductions and more money back when tax season rolls around.
There is evidence that is in favor of opening a separate business account as opposed to keeping it on your personal bank account. The choice you have is what kind of business account, which bank, or credit union you’d want to open with. Make sure to do the research and select according to what perks and benefits you rank in order of importance