The business checking account is a must-have financial tool in the modern world. It provides a pathway for streamlined, secure company payments and purchases. It offers itemized overviews of recent transactions to help keep your books balanced. It helps establish a business as its own entity and keep funds separated accordingly. (Of course, those points are only true if you have the right account in place — and you’re making the most of it.) Read on for insight aimed at helping you find and establish a business checking account that makes sense for your needs.
Why Should You Open a Business Checking Account?
In addition to the points mentioned above, opening bank accounts specifically for your business lends legitimacy to your endeavor. Customer checks and related payments can be made in your business name — a more professional option than payments written out to the business owner. In addition, the Small Business Administration notes such accounts allow authorized employees to handle financial aspects of the job, offer certain perks and liability protections not included with personal accounts, and even open your business up to additional lines of credit, thanks to the established relationship with your financial institution.
What Do You Need to Open a Business Checking Account?
Although specific requirements will vary based on your chosen financial institution, there are a few basic things you’ll likely need to get started. You’ll want to have your employer identification number (EIN) or Social Security Number at the ready, depending on the type of business you operate, as well as documentation showing when your business was established. This includes applicable business licenses, articles of incorporation and ownership agreements. Be sure to take photo identification linking you to the business as well, so your financial institution knows you have authority to open such an account. Many banks also require a minimum amount to order a business checking account. At Central Bank, for instance, a $100 deposit is required in order to get a basic business account going.
What Should You Look for in a Business Checking Account?
Because checking accounts can be as unique as the businesses opting to open them, it’s important to dig into the details before making a decision. Your first step should be to ensure you’re dealing with an established financial institution you can trust. After all, in today’s world of online banks, operations come and go rather quickly. Ask how long the bank has been in business, or do some online investigating into a bank’s history and reputation. Central Bank, for instance, was chartered back in 1956 and has called Houston home ever since.
Once you’ve established the bank you wish to work with, it’s time to dig into the account itself. What, if any, interest can you expect your business checking account to garner? What happens if your balance falls below the required minimum? How many people can have access to the account? What sorts of fees are you looking at? Are there protections in place against fraud and the like? (On that note, what happens if fraudulent activity does occur?) It’s OK — encouraged, even — to enter into the process with questions. Doing so not only puts your mind at ease, but can help your bank ensure it’s matching you with the account best equipped to help you meet your financial goals. Once you have your questions answered and feel comfortable with the situation, it’s time to make things official by completing your application.
The business checking account is a necessary part of any entrepreneurial endeavor, but it isn’t one-size-fits-all. If you have questions about anything you’ve read above, or if you’re interested in learning more about Central Bank’s business banking options, feel free to contact our team. Our financial experts take pride in helping our Houston friends and neighbors, and we look forward to hearing from you!