Business accounts are meant for the convenience and ease of business owners to keep their business transactions and finances separate from their personal funds and withdrawals. A business account also plays a crucial role in the development of the business by managing most of its financial needs.

Business Accounts and Their Associated Benefits

Having a Business Bank Account allows an entrepreneur to leverage multiple benefits, including but not limited to,

  • A Business Bank Account renders financial security to a business and helps effectively manage transactions.
  • Different types of accounts for business can also be used to increase the current and surplus funds or multiply them with higher interest rates and strategic investments.
  • Also, these accounts make it easier for companies and businesses to get loans for expansion as well as for the smooth functioning of the business.
  • It promotes a secure transactional environment for the owners, clients, and customers, eventually increasing their trust in the business or the brand.

Various Types of Business Bank Accounts

  • Merchant Account

A Merchant account is helpful for businesses that accept payments or transactions made from debit and credit cards. Ensure you know about charges like transaction fees and early termination fees while opting for this type of business account.

  • Checking Account

A Checking account is used to manage the financial liabilities and responsibilities of a business, like salary payments, expenditures, transfers, and withdrawals. It acts as the personal account of the business.

  • Foreign Currency Account

If your business requires to deal in foreign currencies for importing and exporting goods, then it would need a foreign currency account to manage such payments and transactions.

5 factors to consider when choosing a bank for your business account

After knowing about the importance and the types of Business Bank Accounts, let us move towards the next step and acknowledge the necessary features and aspects that need to be ticked off before entrusting a bank with your business funds.

These are the aspects that you need to inquire about from a bank before opening a business account:

  1. Is the bank appropriate for small businesses?

The first step is to find out if the bank delivers tailored solutions to the banking needs of small businesses. It can be verified by checking if it has other companies from your industry as its clients. Going through the policy of services or meeting a bank representative in person would provide all the relevant information in this regard.

  1. Fee Structure of the bank

You should know all the monthly or annual charges that must be paid against that account. Charges like,

  • Maintenance charges
  • Minimum balance requirement
  • Overdraft charges
  • Deposit/Withdrawal charges, etc.

Knowing these charges will help you compare the available options to choose a bank with minimum fees and charges.

  1. Services provided by the bank

Before opening an account for business with a particular bank, it would be beneficial to obtain clarity about specific services it provides, including,

  • Online or mobile banking
  • Debit and credit card
  • Bill payments and transfers, etc.
  1. Cash flow limits

It is one of the most important things to know. Stay aware of the transaction limits imposed by the bank on a business account. Know the upper and lower limits of daily, weekly, and monthly transactions and compare them with other banks.

  1. Ease availability of loans

Also, do inquire about the availability of loans, their interest rates, and concessions the bank offers against specific Business Bank Accounts.

Bottom line

Being alert and mindful of the characteristics of the different types of Business Bank Accounts offered by banks will help you make the right decision regarding handling your business funds and finances. Also, it would enable you to leverage the optimum benefits a bank offers against your account.

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