Why do you need a business checking account?

Millions of Americans have a side hustle, freelance, or run their own business. And while it’s possible to use your personal bank account for money coming in and out of your business, many professionals are better at business. Verifying account – A designated area for expenses, income, taxes and more related to your business.

Do you have a business checking account for your business? If not, there are several reasons why you might want to open one.

You can explore checking account options (and the interest you can earn) right here, or simply use the chart below to get started.

Why do you need a business checking account?

Here are four reasons why you should open a business checking account.

Separates business and personal finance

Having a business checking account can help you keep your business transactions separate from your own. Not only is this smart for your own protection (you don’t have to give out your personal bank account information to buy or pay for things), but it also makes for a much simpler tax process.

This is especially important for small business owners because they have to pay taxes quarterly – just once a year.

With business checking accounts, estimating quarterly taxes is easy. You can easily calculate your income as well as your deductible expenses. Doing this with a personal account can be difficult and time-consuming (many times a year you have to sort through hundreds – maybe thousands – of personal transactions).

It helps to establish credit for your business

Having a checking account for your business helps build your company’s credit profile, which is important if you’re looking to apply for or apply for a business loan. credit card.

Getting credit makes it easier to qualify for these items, but you’ll probably get better rates and terms — at least if your business credit is good.

But just having a bank account is not enough. To get credit benefits, set up net payment terms (net-30, net-60, etc.) with any suppliers or vendors and make sure they are reported to the business credit agencies. Then make your payments to each party on time and watch your credit grow.

Getting started with a business checking account is also easy. You can explore your options online now or simply use the chart below.

It adds credibility to your business

A dedicated business account adds credibility to your business – especially if it’s just starting out. It also shows that you take your work seriously and are confident in its direction.

While using your personal accounts for business doesn’t necessarily equate to the opposite, it can raise red flags with new customers and suppliers. Is this a hobby or something you don’t really want to pursue? Are you finishing taxes or running things under the table? This type of hang-up can mean the difference between snagging a new customer and losing valuable business.

It can protect you from liability

Finally, keeping your business separate from your personal life can provide a certain level of accountability — especially if you register your business as an LLC or S corporation. If you don’t take these steps and become a consumer or other business, it could put your personal finances and assets at risk (meaning your money, car or home could be subject to a court judgment).

Always consider investing in professional liability insurance for added protection. This provides an additional layer of protection just in case you are sued.

Shop around for your account

If you’re ready to open a business checking account, be sure to weigh your options first. Banks, credit unions, and online banks offer these accounts, and their terms can vary slightly. Before making a decision, you’ll want to consider any deposit limits, minimum balance requirements, fees, and transaction limits of an institution.

You may also consider opening it High yield savings account For your business. This will help you prepare for unexpected repairs or expenses that may accrue. one more time, Terms and rates may vary for higher savings accounts., so be sure and buy. You can shop for the best business accounts here or using the table below.