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Opening a business bank account is an important step in your professional journey. Not only does it allow you to establish your business as a professional, independent organisation, but it also offers a variety of opportunities that would otherwise be unavailable to you if you were to continue to operate your business through a personal account.

For instance, as a business bank account holder, you may be eligible for bonuses offered to customers during introductory periods. Furthermore, business bank accounts tend to offer business-specific credit card or financing options that would otherwise not be available by means of personal accounts.

There are plenty of different reasons why it鈥檚 beneficial for your business to have a properly established business bank account, but that being said, there is also a variety of considerations to take into account when opening an account.

Business bank accounts to consider include:

When Should You Open a Business Bank Account?

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While there are plenty of reasons to have a business bank account, not every business necessarily needs one. That is, small businesses with only a few (or no) employees and the occasional transaction probably don鈥檛 need business bank accounts. It would be possible and probably easier to simply continue operating from a private account.

However, as your business grows, you hire more employees and the financial side of things becomes more active, the necessity of having a business bank account becomes more relevant.

A few indicators that you need to open a business bank account include:

• Your business has employees and you plan on hiring more staff.
• The business is run by more than one person (not family or a spouse).
• It鈥檚 an Incorporated Business (in the USA) or something similar, depending on where you鈥檙e based.
• You need a business loan or you may need one in the near future.
• Your business needs to be able to accept credit card payments.

These are just a few of the most important signs that it鈥檚 probably time to make a move from a private bank account to a business account.

So, if you鈥檝e decided that you鈥檙e ready to start working with a dedicated business bank account, here are 6 things to properly consider before you dive right in.

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6 Things to Consider When Opening a Business Bank Account

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Opening a business bank account is a significant step in your professional journey, and it鈥檚 important that before you go ahead with it, you鈥檝e properly contemplated your needs, what different types of accounts and banks have to offer you and how those two things potentially line up.

These are 6 of the most important things to consider when opening a business bank account.

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1. The Fees, Requirements and Interest Rates

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All bank accounts, including business bank accounts, charge account holders specific fees for operations, and along with those fees come a series of requirements that need to be adhered to.

Some of these fees include deposit fees, ATM fees, early termination fees and maintenance fees (on checking accounts).

• Deposit Fees:听Often, there are limits placed on the amount of money that can be deposited within a month, and if you exceed those limits, deposit fees are implemented.
• ATM Fees:听Many banks charge standard fees for withdrawing money from ATMs.
• Early Termination Fees:听If you choose to close a bank account before the end of the contract, you may be forced to pay an early termination fee.
• Maintenance Fees:听Most banks require account maintenance fees, but these fees are often waivered if business funds exceed a certain amount or if the business owner has other personal accounts with the same bank.

These fees are, in theory, fairly standard. However, they differ from one bank to the next and they have the potential to affect different businesses in varying ways. Thus, it鈥檚 important to properly consider what the bank鈥檚 policies are and how they鈥檒l affect听your听business operations.

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2. Look Out for Bonuses for New Account Holders

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It鈥檚 quite normal for banks to offer potential account holders bonuses during introductory periods in an attempt to attract them to the bank in question.

In some cases, this may be a straightforward cash bonus, and in others, it鈥檚 more likely to be the wavering of maintenance fees or something similar.

Bonuses offered during introductory periods can be great for business owners, offering them some financial relief and assistance, but bear in mind that the purpose of these bonuses is to get you interested in the bank. So, make sure that you鈥檙e sufficiently satisfied with听all听the bank鈥檚 policies, requirements and opportunities and that you鈥檙e not simply being distracted by the promise of a bonus or discount.

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3. Does the Account Offer Merchant Credit and Processing Services?

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Businesses that make sales and accept payments by means of credit cards need to have business accounts with banks that offer merchant credit and processing services.

Now, if the bank听doesn鈥檛听offer merchant credit and processing services, it doesn鈥檛 necessarily mean you can鈥檛 make sales. There are third-party processors who offer the service separately, and they also often have lower fees available.

However, when you鈥檙e running a busy business, it becomes significantly easier to be able to do everything through your bank. So, if your business is growing or you it seems like growth is inevitable in the future, it鈥檚 a good idea to make sure the business account in question allows for merchant credit and processing services.

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4. What Are the Business Credit Card and Financing Options?

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One of the most useful things offered by banks to businesses is potential financing options, and whether you鈥檙e currently looking into business credit cards or business loans, it鈥檚 something you should always bear in mind 鈥� you simply never know what the future may hold for your company.

Now, business credit cards tend to go hand-in-hand with business checking accounts, and this means that they鈥檙e going to offer interest rates and a range of other credit card terms.

Different banks and accounts will offer varying terms and rates, so make sure you have a proper look at these things when considering a business bank account and make sure that the bank you鈥檙e considering is offering competitive rates relative to other banks in the market.

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5. Are There Limitations on Transactions?

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Many types of business bank accounts impose a variety of different limits on users, ranging from withdrawal limits to transaction limits and more. If these limits are exceeded, account holders are charged a penalty fee that is normally just deducted from their bank account.

Limits for business bank accounts, however, tend to be fairly high across the board 鈥� significantly higher than private accounts 鈥� so this is unlikely to be a big problem, but make sure you check the limits anyway.

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6. Is the Account Covered By Banking Insurance?

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It鈥檚 become increasingly important for banks and bank accounts to be insured, and this is even more relevant for business accounts that are holding a significant amount of money.

The specifics of how banking insurance works and who controls it will differ from one country to the next, but generally speaking, most countries have national bodies that provide financial institutions with insurance for all types of deposits.

For instance, in the United Kingdom, account holders are protected by the Financial Services Compensation Scheme (FSCS), whereas in the United States, it鈥檚 the Federal Deposit Insurance Corporation (FDIC).

Whatever the case may be, it鈥檚 essential to confirm that the bank you鈥檙e hoping to open an account with is insured by the relevant institution.

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Selecting the Right Business Bank Account For Your Company听

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Opening a business bank account is a big step forward for most business owners, and it means the start of having to ensure that all regulations are being followed and that you鈥檙e getting the most out of the financial institution in question.

Different businesses have varying needs based on their size, industry and more, so it鈥檚 essential that all the different aspects of banking are taken into account.

From the specifics of interest rates and processing fees to insurance options and financing offerings, it鈥檚 always a good idea for business owners to shop around, consider their options and make informed decisions.