Why do you need a business checking account?
Business owners who have a business checking account can enjoy some significant advantages. Here are some reasons you should consider having one:
- Easy accounting: Deposits and withdrawals are clearly marked with their source and purpose, making it simple to enter them into your books. It’s also easier to prepare income statements, balance sheets, and tax returns when you only have one set of numbers.
- Business credit line: A good credit line gives you quick access to large amounts of capital in case you need it for unexpected expenses or inventory purchases. Business credit lines also may come with special features like reduced interest rates for new purchases or cash advances and additional benefits like concierge service.
- Convenience: Business accounts offer online banking services that allow you to electronically pay bills, check your balance, and transfer funds between accounts, which can save you time and money.
- Safety: Business checking accounts are usually safer than personal bank accounts. A business owner’s assets are protected should their business fail. Personal assets, such as a home or car, are also protected in the event of a business failure.
- A professional image: A business account shows potential clients and customers a level of professionalism and investment that cannot be found with personal accounts. Providing your customers with a more professional experience can build loyalty and trust between you and them.
What do you need to open a business checking account in Arizona?
The requirements can vary depending on the bank, but often they ask for similar documents. Below is a list of items that most banks require to open a business checking account.
- A copy of your state’s certificate of incorporation document
- A copy of your business license
- A signed application form
- Your company’s tax ID number (e.g., EIN)
- Proof of your identity
- A written resolution authorizing the opening of an account if the signer is not an individual.
- Bank statements from all accounts from the past six months
Common business checking account fees in Arizona
Here’s a rundown of business checking account fees:
- Minimum balance fee: You’ve probably seen this one before. It’s a flat monthly fee that some banks charge if your business checking account balance falls below a certain level during the month — say, $1,000.
- Transaction fees: These fees aren’t charged per check — they’re charged per transaction. For example, let’s say you want to buy $10,000 worth of office supplies from Office Depot using your business credit card. Your bank might charge you 10 cents per transaction (or even more). This adds up quickly if you’re doing a lot of small transactions during the month.
- Business checking account maintenance fees: These are usually a set monthly fee for maintaining your business checking account with your bank or credit union.
- Account closing fee: If you close your account before your contract period ends, some banks will charge a fee that typically ranges between $50 and $100.
- ATM fees: This is a fee charged by an ATM operator to use one of their machines to withdraw money from your checking account. This fee is typically around $2 per transaction but can vary depending on where you live and where the machine is located. Some banks have agreements with other banks that allow you to use their ATMs without paying any extra fees, while other banks charge extra for using another bank’s ATMs.
- Overdraft fee: If your debit card purchase exceeds the amount in your checking account, your bank will generally cover the difference, but there’s a price to be paid.
- Stop payment fee: If you ask the bank to stop payment on a check, it may charge a fee for doing so.
- Overdraft protection: This is one of the most common and controversial fees that banks charge their customers. Basically, when a customer makes a purchase or withdraws cash using their debit card and there isn’t enough money in their account, the bank will cover the deficit but for a fee.
How to choose the best business checking account in Arizona
The best business bank account is more than just a place to deposit money. Your bank will become your partner in your company’s growth, helping you make smart decisions. Here are some things to consider when choosing the best business checking account:
- Fees: Banks charge different fees for business accounts. Look for one with low or no monthly maintenance fees and no per-transaction charges. In addition, avoid banks that have monthly minimum balance requirements and charges for using ATMs outside of their network.
- Service: A good bank will have a team dedicated to serving your business’s needs. This can include account representatives who can answer your questions and help you meet your goals and financial advisers who can help you develop a plan for growing your business.
- Loan options: Be sure the bank offers loans tailored specifically to businesses in your industry — such as short-term loans or equipment financing — and understands how they work. Make sure they offer competitive rates and terms so that you get what you need when you need it.
- Minimum balance requirements: Some bank accounts require minimum balances in order to avoid fees or have higher interest rates. If you don’t have enough money coming in every month to keep a certain balance in your account, then this might not be the right option for you.
- Online experience: It’s vital to look for a bank that offers an online experience that suits your lifestyle. That could mean you want it to be easy to check balances and transfer funds, or you might choose one that allows you to bank on the go, so you can log in from your phone or tablet wherever you are. Whatever your preference, it’s important to find a bank that meets your needs.