Business accounts online opening is a must when you’re prepared to start spending and accepting money in your business activities. A business bank account will help you get protected and compliant fully. You should open a business bank account as soon as you get started with your business. If you’re wondering “What do you need to open up a business account?” This article will enlighten you.
2 considerations when opening a business bank account
Here are a few things to consider when opening a business banking account.
Compare the banks/financial institutions to pick one
It can always be attractive to open a business account with a bank//financial institution where you opened your personal bank account before, because you can manage your finances in the same place. This must not always be the optimal option for a business owner. You should spend time comparing bank accounts and fees with several banks and alternative financial institutions to pick the business account to the best. Also, you need to consider which account features are a must. For example: Do you need a business bank account with detailed information? Do you need a mobile app installed to help you deposit checks online? Is it helpful to get notified when your account balance is reaching the minimum limit?
Business accounts online opening – everything you need to cover
Room for expansion possibilities
Some business bank accounts set a transaction limit and charge some extra fees for exceeding. This can be costly if you constantly surpass this limit of transactions. So, you should take the time to review your business funds and predict how your company’s development and volume in the future is affected by monthly fees. If you think your business bank account can be restrictive to some extent, try to check if the bank has alternative accounts with the added free transactions or any other services offered as your requirement.
Types of business bank accounts
There are several types of business accounts. It depends on your needs, so there is a possibility to open more than a business account if you want. Here are some popular types of business bank accounts you need to know:
Business checking account
A business checking account is quite similar to a personal checking account. It’s used to get payments and spend the funds if necessary. It’s a suitable choice to manage expenses, payroll and other costs to ensure your business keeps running. Also, it’s possible to earn interest on those funds.
Business savings account
Business savings accounts help you store money in case your company doesn’t plan to spend for a short term. Basically, business savings accounts funds gain the interest but have more limits on how to access them.
Traditional small business checking account
Traditional small business checking accounts seem similar to a personal checking one. It helps you to withdraw, make deposits, write checks or make wire transfer, purchase, and more. In general, this account consists of ATM fees, maintenance fees, deposit fees and transaction fees.
Merchant services account
When operating an eCommerce company, you need to use debit and credit cards. Basically, it’s required to get a merchant account to transact. This account is a very reliable place for accepting card payments. It helps to speed up the money status before going through a whole payment process. It helps to protect the customers and owners from frauds and losses.
Credit card account
This account allows you to use a business credit card for miscellaneous items or emergencies in your company. This helps to build or improve your business credit score for business owners of a small business.
What do you need to open up a business account
It’s easy to open a business bank account once you choose the right bank/financial institution. You can open it online or visit a local branch nearby to get started. Here are some of the required documents when you open a business bank account. Some banks can ask for more. Depending on each financial institution, the legal documents for submitting to open up a business bank account will be different. Here are some of them:
Employer Identification Number (EIN)/Social Security Number (SSN)
Most banks/financial institutions require business owners to supply their EIN. That helps to check if you’re eligible to open a business checking account/savings account. Some banks/financial institutions can allow sole proprietors to open a small business account with their SSN only. If there is a need to obtain an EIN, you can ask for one for free by filling in the application on the Internal Revenue Service’s website.
This consists of a government-issued photo ID, a passport/driver’s license. If your business has many owners, it can involve their personal details and ID for every owner with 25% or more ownership.
Business’s formation documents
The banks/financial institutions will also ask you for the legal documents of company formation. What you need to give them depends on your entity type and the state where your company was set up. Commonly, here are some documents that need to be shared with them.
Corporations: articles, business licenses, corporate bylaws.
Partnerships: state certificate of partnership, partnership agreement, business license, business name registration certificate.
Limited Liability Company: articles, business license, LLC operating agreement.
Sole proprietorships: employer identification number, business license, company name registration certificate.
Startups: organizational documentation, business licenses, personal/business identification. They can request different verification documents, so you need to check every instruction carefully before submitting your business documents.
More about DNBC Financial Group
In the Fintech industry, DNBC Financial Group is emerging as a trusted financial institution, supplying money payment solutions all around the world, especially for opening business accounts online. DNBC Financial Group has become an optimal payment provider in the world since 2017 with payment solutions at reasonable fee and favorable exchange rate.