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Small business owners are some of the busiest people in the world, so if you’re looking for a new professional banking relationship, you might want to save some time and open a business bank account online. Opening a business checking account online can help your business in several ways: by providing you with a safe place to keep your business income, by separating your personal and business finances, and by making it easier to track tax deductions. enterprises.
Don’t assume that you have to go to a physical bank branch to open a business bank account. It is more than ever possible to open a business checking account online.
Take a closer look at how to compare your options for online business bank accounts.
Benefits of a business current account
There are several reasons why you should open a business checking account to help your business grow:
- Separate your business and personal finances. This makes it easier to protect your personal property in the event of a lawsuit against your business.
- Keep track of tax deductions. Having a business checking account can make it easier for you to track tax-deductible business expenses, such as payments to suppliers and contractors, business equipment, supplies, inventory purchases, and all the rest. that you need to buy to run your business.
- Building business credit. With a business bank account, you can start building trade credit under your business name (regardless of your personal credit history). Getting a business checking account can be the first step towards getting a business credit card, business line of credit, or small business loan.
- Benefit from advanced commercial banking services. As your business grows, you may want to access higher level banking services such as cash flow management, merchant services and point of sale (POS) systems, revenue and data analysis to help you understand your business’ financial performance.
Choosing the best business current account
When trying to choose the best checking account for your business, think about your general business needs, what you expect from your professional banking relationship, and what bank account features and services are most important to you.
Here are some key things to keep in mind when choosing a business checking account:
- Digital banking features. The best business checking accounts generally provide a great digital banking experience, both in your workplace and on the go, with features like mobile check deposit, online bill payment, and a user-friendly mobile app.
- Corporate banking. Some banks offer a wide range of business banking services, such as small business loans, cash flow management, data analysis for your business income and sales forecasting, etc.
- Ease of integration. If your business uses digital business tools to process payments and manage your accounting, such as PayPal, QuickBooks, Shopify, Stripe, or Venmo, you might want to make sure that your choice of business checking account can easily fit into the tools. that you prefer.
- Interest rate for deposit accounts. Some business checking accounts bear interest, but the Annual Percentage Return (APY) may not be competitive with the best online savings accounts.
- Service charge. Watch out for monthly service fees, ATM fees, wire transfer fees, and any other costs associated with using your account or receiving payments from your customers.
- Bank branch and access to ATMs. If you need convenient access to ATMs to deposit cash payments at your business, or if you need in-person banking services that can only be provided at a physical branch, make sure your checking account company can provide them.
- Monthly transaction limits. Some business current accounts only allow a certain number of transactions per month and charge a fee for any transaction over this limit. Make sure you understand how much money is coming in and out of your business in a typical month, so you can find an account that best matches your trading volume.
Business chequing accounts tend to offer a wider range of features and services than a personal chequing account. It helps to consider the needs of your business, both now and as it grows, when selecting a business bank account.
How to open a business bank account online
It is not always necessary to go to a bank branch to open a professional bank account. Many banks have expanded their online offerings and made it easier to open a business bank account online.
The exact process depends on the individual bank, but, in general, here’s how to open a business checking account online:
- Go to the bank’s website. Find details on how to open a business checking account online.
- Choose the business bank account you want to open.
- Make sure you have enough money to fund the account with any required minimum opening deposit.
- Read the fine print to find out what business documents you need to provide, depending on your business entity – limited liability company (LLC), partnership, sole proprietorship – and how to provide the documents online. For example, if you have an LLC, the bank may ask you to provide the articles of association for your business. You will need to provide a tax identification number for your business, such as an Employer Identification Number (EIN) or, in some cases, your personal Social Security number. You may also need to provide personal identification for yourself as the business owner.
- Sign, electronically, all necessary authorizations, such as giving the bank permission to check your credit.
Not all types of businesses can open a business bank account online. If your business is not a private business or has multiple owners, members or partners, some banks will require you to go to a bank branch to open the account in person.
Frequently Asked Questions (FAQ)
How much money do you need to open a business bank account online?
It depends on the bank, but often: not much. Some of the best business checking accounts don’t require a minimum deposit to open an account, or require a modest opening deposit of $ 50 or $ 100. Even if your business is newly established and is not yet generating significant income, you can still open a business bank account.
Do i need an LLC for a business bank account?
No. Even if you haven’t created an LLC or incorporated your business as a separate legal entity, for example, if you are doing business as a sole proprietor, you can open a business bank account. However, depending on the state, you may need to provide additional documents to open your account, such as a business license, alias certificate, business name registration, or Doing Business As (DBA ).
Why is it difficult to open a business checking account online?
Banks are required by law to know the true identities of their customers. If you open a business bank account, the bank must verify your identity and confirm not only that you are who you say you are, but also that your business exists as a legal entity that deserves its own separate identity within the financial system. . .
Sometimes this can be done online, as long as you can provide digital versions of any required sales literature. But some stories and situations are more complicated and require more time and attention. Not all banks allow all types of businesses to open an account online. For example, if your business has multiple members / owners, the bank may require all business owners to come in person to the bank branch to verify their identity.
Do you need an EIN to open a business bank account?
No. If you don’t have an Employer Identification Number (EIN) for your business, in some situations you can open a business bank account using your personal social security number or your individual tax identification number (ITIN ) for non-US citizens.