Business Banking Simplified
If you own an LLC or any type of business, managing your finances is crucial for success. Opening a designated business bank account is one of the best ways to simplify your finances and is especially relevant for LLCs. This account allows you to manage your finances digitally, easily track your transactions, deposit funds from customers, pay for expenses, and separate your personal and business finances. An online banking ability usually accompanies business bank accounts, providing a range of benefits, such as instant access to accounts, lower fees, and other conveniences and features tailored to LLCs and businesses alike.
Recommended Business & LLC Checking Account Providers
What is a Business Bank Account, and Why Should You Get One?
As the name suggests, a business bank account is a type of bank account that is specifically designed for businesses. A business account can be opened in the name of the company or LLC, thereby making it possible to receive and make payments on behalf of the business or LLC. The most common type is a business checking account. Banks typically offer these accounts to help LLC businesses manage their finances more easily. The business can use it to make deposits and withdrawals, pay bills, write checks, and process payments.
It is an essential tool for managing your finances digitally, which is important in today's world of remote work and digital business transactions.
How to Open a Business Checking Account?
The best business bank accounts can be opened online with a few clicks and hassle-free. It would usually require one to visit the bank’s website or app, and provide information related to the business.
Banks will usually ask for the following information:
- The legal name of your business as it appears on your state's or the IRS's documents.
- Your Employer Identification Number (EIN)
- Your business license
- Your business address (or a PO box)
- The business contact information
- Proof of identity
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Benefits of Having an Online Business Bank Account
An online business or LLC bank account provides all the features of a regular bank account but also offers some additional features. Those include the convenience of online and mobile banking, making it easier for small or medium-sized businesses to manage their finances from anywhere at any time. Not only is it convenient and accessible, but it also simplifies how you manage your business finances.
Here are some reasons why opening a business online checking account can be a smart move:
- Quick Approval Process: Opening a business online bank account is a quick and easy process. You can apply online and get approved within minutes.
- Security: The data is encrypted, so there are fewer chances of someone hacking your information. Online accounts also offer safety features such as fraud detection, two-factor authentication, and remote lock. They are also FDIC-insured, which means your deposits are protected.
- Easy Account Management: With an online business bank account, you can access your account 24/7 from anywhere. You can view your account balance, transfer funds, pay bills, and more, all from the comfort of your home or office.
- Collaboration: An online business bank account can be managed by multiple people with different access levels. This means that only those with permission can access certain information about the company’s finances.
- Cost-Effective: Compared to traditional banks, online business bank accounts offer lower fees and minimum balance requirements. This is great for startups and small businesses that want to save money.
- More Features: Online business bank accounts offer more features and tools to help you manage your finances. For example, you can link your account to accounting software, which helps you keep track of your expenses, revenue, and taxes.
How to Choose The Best Bank for LLC or Small Business Account
You’ve decided you need to set up a business account. All that’s left is to answer a simple question: Which is the best business checking account?
The answer depends on what your business needs. The best bank for small business accounts will have features and services catering to small businesses' unique needs and requirements. Those include low fees, competitive interest rates, flexible lending options, easy-to-use online and mobile banking platforms, and excellent customer support. Additionally, the bank should have a good reputation and be reliable, with a track record of supporting small businesses and providing personalized financial solutions to meet their specific needs. Lastly, the bank should focus strongly on security and offer robust fraud prevention measures to protect its customers' sensitive financial information.
Consider the following when choosing a business bank account:
Factor No. 1 – Account Features
Some business bank accounts have more features than others:
- Wire transfer services
- Mobile and online banking
- Automatic bill payments
- Access to safe deposit boxes
- Check-writing
Some banks even offer more specific business services, such as help with managing cash flow. Figure out which, if any, of these services you need to access. This helps you create a shortlist of account providers that meet your company’s needs.
Factor No. 2 – Interest Rates
In an ideal world, your company will build cash reserves over time. You’ll likely want to collect interest on those reserves, meaning you need either a business savings or interest-bearing business checking account.
Always check the rates banks offer before selecting an account. Furthermore, look into the fees associated with the account. You may find that an account with a favorable interest rate ends up costing more than it’s worth because of the associated fees.
Factor No. 3 – Ease of Access
Of course, you’d expect your business bank to offer plenty of branches and ATM access. But you must also know you can conduct most of your business online. That’s especially important for people working in the eCommerce space.
A good business bank account should allow you to make withdrawals and deposits easily via your preferred device, online. It should also provide access to customer support, such as a live chat feature or email address to which you can send messages. Other useful features include real-time notifications related to transactions and the ability to make overseas transactions without barriers.
The easier it is to use the account online, the better for your business.
Set Up a Business Checking Account
Before you start your search for the best small business bank account, you need to understand why these accounts are so important. The best business bank accounts help you separate your personal and company finances. They also add legitimacy to your company, in addition to helping you build your company’s creditworthiness for the future.
The best bank account would usually come with handy online features, as well as special functions related to conducting business. Determine what you need from your account first. Then, look for an account that serves your specific business needs.
FDIC Insurance: Protecting Your Business Deposits
As an LLC business, it's important to know that your funds are protected. That's why all of the banks presented on our list are FDIC-insured, meaning that your deposits are backed by the United States government. This ensures that your money is safe and secure, giving you one less thing to worry about as you focus on growing your business.