How Do I Open a Business Checking Account? Here's What You'll Need

Starting a business involves juggling many tasks, from creating a business plan to hiring employees. Opening a business checking account is one of those crucial steps. A separate account for your business helps keep your personal and business finances distinct and aids in better financial management and record-keeping. How do you go about opening a business checking account? Here's a comprehensive guide to walk you through the process.

Why You Need a Business Checking Account

Before diving into the how-tos, it's essential to understand why you need a business checking account in the first place.

• Separation of Finances:  Mixing personal and business finances can lead to accounting headaches and potential legal issues.
• Professionalism:  Paying from a business account adds a layer of professionalism when dealing with clients or vendors.
• Easy Record-Keeping:  A business account makes tracking business expenses easier, simplifying the tax filing process.
• Access to Business Loans:  A business checking account can make you more eligible for business loans and lines of credit.

Choosing the Right Bank

When it comes to choosing a bank, consider the following factors:

• Fees:  Some banks charge monthly transaction fees or even fees for not maintaining a minimum balance.
• Location:  If your business deals with many cash transactions, having a bank nearby can be beneficial.
• Online Banking:  Ensure the bank offers robust banking services, including mobile check deposits and online bill payments.
• Customer Service:  Good customer service can be invaluable, especially if you encounter any issues with your account.

Perks of Local Business Banking

Local banks offer a host of benefits for small and medium-sized businesses. Start your search by making a list of local banks, either through online searches or recommendations from other business owners. Compare their services and fees, especially for business checking accounts. Many local banks provide specialized services like robust online banking, mobile check deposits, and dedicated business bankers.

Visit your shortlisted banks in person to get a feel for their customer service and to ask specific questions. Consult a business banker during your visit; their advice can help you pick the right account. Also, check online reviews to see how satisfied other business owners are with those banks.

Choosing a local bank offers several advantages over national banks. You'll get personalized service and faster, more flexible decision-making for loans and other financial services. Local banks often have lower fees and may not require a minimum balance for business accounts. Additionally, banking locally strengthens community ties and contributes to local economic growth.

6 Documents Required to Open a Business Checking Account

To open a business checking account, you will generally need the following six documents or items:

1. Business License:  Proof that your business is legally registered.
2. Employer Identification Number (EIN):  For tax identification.
3. Personal Identification:  Such as a driver's license or passport.
4. Business Formation Documents:  Articles of Incorporation for corporations or similar documents for other types of businesses.
5. Ownership Agreements:  If your business has multiple owners or stakeholders.
6. Initial Deposit:  Many banks require an initial deposit to open an account.

The Application Process

• Visit the Bank:  While some banks allow online applications, visiting in person for your first business account is often better.
• Consult a Business Banker:  They can guide you through the types of accounts and services that would best suit your business.
• Submit Documents:  Provide all the required documents for verification.
• Initial Deposit:  Make the initial deposit if required.
• Account Review:  Once everything is verified, review all the terms and conditions before finalizing the account.

Additional Features to Consider

1. Overdraft Protection:  Useful for avoiding fees if your account balance goes negative.
2. Multiple Cards:  If you have partners or employees who will also be accessing the account.
3. High-Interest Rates:  Some business accounts offer interest on your balance.
4. Merchant Services:  Like point-of-sale systems if you have a physical storefront.
5. Monthly Maintenance Fees:  Oftentimes, banks have monthly maintenance fees if you do not meet a minimum monthly balance or deposit amount. These are important to consider when choosing a bank.
6. Money Market Accounts:  Specialized deposit account for businesses that merges the benefits of both savings and checking accounts, offering higher interest rates for increased earnings on idle funds while also allowing for limited liquidity through a restricted number of monthly transactions like checks, transfers, and withdrawals.
7. Zelle Capabilities:  If sending money through Zelle is an important aspect of banking to your business, make sure to note if the account you’re opening allows this.
8. Workplace Banking:  Does the checking account allow for workplace banking for employees?
9. Online & Mobile Banking Capabilities:  While most banks nowadays have mobile banking, it’s important to double-check that the capabilities you’re looking for are accessible at the bank where you get an account.

Business Checking & Money Market Accounts in PA, NY, and NJ

At Peoples Security Bank & Trust, we understand the unique financial needs of Pennsylvania, New York, and New Jersey businesses. That's why we offer a range of business checking and money market accounts tailored to meet the diverse requirements of large and small businesses.

Our business checking accounts come with features such as low transaction fees, robust online banking services, and exceptional customer support, making it easier to manage your business finances efficiently. Additionally, our money market accounts offer competitive interest rates, providing an excellent opportunity for businesses to grow their savings while maintaining liquidity. Let’s make your business succeed together.

Disclaimer:  This article is for informational purposes only and should not be considered financial or legal advice. Always consult with a qualified professional for personalized guidance.

Conclusion

Opening a business checking account is straightforward, but preparing and choosing the right services for your needs is crucial. A dedicated checking account for your business is a step towards financial organization and success.

By following this guide, you'll be well-equipped to open a business checking account that serves your business's unique needs.