What Is Online Banking?

Online banking enables you to manage your account and perform banking functions from any device via the internet instead of having to go into a branch or make a phone call. This includes making transfers, paying bills, viewing balances, and checking transactions. In addition, you get 24/7 access to your accounts and the ability to manage your accounts on the go.

While several institutions offer online banking via an app or online platform, there are specific online-only banks that often have superior rates and cheaper fees than traditional banks due to lower overhead costs.

What Is a Business Checking Account?

A business checking account is a deposit account that lets you deposit and withdraw money, write checks, make transfers, pay bills, and more. It functions much like a traditional checking account except for your business finances instead of personal.

You open it in your company name, and it may have additional features that a personal checking account won’t, such as tax planning or integrated credit card processing.

Do I Need to Own an LLC to Open up a Business Checking Account?

While you can get a business bank account for an LLC (limited liability company), you don’t have to be an LLC to open one. Sole proprietors, partnerships, and other types of businesses can also open a business checking account.

Do I Need a Business Checking Account if I Already Have a Personal Checking Account?

In short, it depends. If your business is a sole proprietorship or a partnership, you aren’t legally required to have a business checking account. You’re free to use a personal checking account, but should still make an effort to separate personal and business finances.

However, if you operate as a corporation, you’ll need to have a dedicated business checking account for liability purposes and show a clear separation between what’s yours versus your business’s.

Also, some providers/banks may not allow you to use personal accounts for business purposes. So read through the terms and conditions of your personal account before using it for your company.

What are the Benefits of Having a Business Checking Account?

Whether you’re legally required to have one or not, there are several benefits of having a business checking account. One of the biggest benefits is keeping business finances separate from your personal finances.

Trying to track what’s for business versus what’s a personal transaction can be a headache if you use a personal account for business purposes. Having a dedicated account for your company makes it easy to keep track of things like your income and expenses, which is especially beneficial come tax time and saves a lot of work.

Another benefit is that it can serve as a foundation to build your business credit. Some lenders require that you have a business bank account to secure a loan or take out a business credit card. Good business credit can help you qualify for better lending and terms in the future as your company scales.

The best business bank accounts also have extra features that are helpful to all companies. This includes things like the ability to scan receipts, tools to categorize spending, and integration with accounting software.

Using a business account rather than your personal account looks more professional to suppliers and clients, too. It helps to show that your company isn’t a hobby but a legitimate operation that you’re taking seriously.

Who Can Open a Business Checking Account?

Anyone who owns a business that is legally registered in the USA can generally open a business account. However, unless you’re a sole proprietor, you’ll need an Employer Identification Number (EIN). Sole proprietors can get an EIN but can opt to use their social security number instead.

What Do I Need to Open a Business Checking Account?

To open a business checking account, you’ll have to complete an application. It will request personal information like:

• A piece (or two) of government-issued ID
• Your date of birth
• Personal phone number and email
• Social security number
• Home address

The application will also ask for business-related information, such as:

• EIN, if you have one
• The industry you’re in and what the business does
• Business name
• Company address/phone number
• When the business was formed
• The type of business structure (corporation, LLC, partnership, etc…)
• Certain business-related documents (like a business license, operating agreement, articles of incorporation if applicable, etc…)

The exact requirements may vary from bank to bank, as well. Similarly, while you can open a business bank account online in some cases, certain banks may require you to go into a branch.

Business Checking Account Features to Look For:

You’ll want to seek some key features when choosing the best small business bank account for your needs.

First, try to find free business checking accounts. Fees can eat away at your profits and add up over time if you’re not careful. They might include monthly fees, transaction fees, overdraft fees, deposit fees, ATM fees, and others.

Be aware that some banks may have certain requirements (like maintaining a certain monthly balance) to avoid fees. If finding a no-fee account is challenging, do your homework and choose one with the lowest fees possible.

You can also look for checking account features that aid in managing your business. Examples of this include the ability to:

• Create and send invoices
• Pay bills online
• Integrate with tax and account software you already use
• Easily transfer funds

Choose a business checking account that has a user-friendly app that lets you look at your transactions, view balances, and transfer funds with ease. Even if you mainly do your online banking on a computer or in-branch, being able to quickly check in on your business on the go in an app is valuable.

Ensure that both the app and online platform are highly rated, too. If other business owners have had poor experiences with them, there’s a good chance you’ll experience the same.