Why do you need a business checking account?
Having a business checking account is a great asset to have when you’re running your business. The following are the advantages of having a business checking account:
- Keep track of your spending: You’ll be able to see how much money you have left in your account and what you need to spend on. This will keep you from going over budget on important items while also helping you save up for future expenses, like equipment or repairs.
- Separate personal and business finances: This is helpful because it will help keep your personal and professional finances separate so that one doesn’t affect the other. It will also help eliminate any potential conflicts that might arise because of both being in the same account and possibly sharing an ATM card.”
- Professional image: It is important for your business to look professional, and a bank account is an extension of your business image. A professional-looking statement will reflect well on your business, giving potential customers confidence in you and in the quality of your goods or services.
- Financial protection: If you have invested money into starting up your business it is important that it is protected. business checking accounts are covered by the same Deposit Protection Scheme as personal accounts and they can be used to secure loans when you need them for your business.
- Security: If someone steals your identity, they won’t be able to get into your business checking account. If you lose your debit card, you can put a hold on the account, so if someone tries to access it, they won’t be able to. business checking accounts also offer more fraud protection and are less vulnerable to hackers than personal accounts.
What do you need to open a business checking account in Florida?
Trying to figure out what you need to open a business checking account? Here are the basic requirements:
- Documentation for the business: This includes articles of incorporation, and recent federal tax returns if applicable. The bank will check these documents to make sure the business is legally formed and that the owners have good credit.
- Corporate resolution authorizing you to open the account on behalf of the corporation. Banks usually request this document when they see that an individual is signing as an officer in place of a corporate name.
- Proof of your identity and address: They include things such as your driver’s license or passport and the latest utility bill or bank statement showing your name and current address.
- Business license: Depending on where you live, this may be a city, county, or state license.
- A state-issued photo ID — either your driver’s license or passport.
- Your Social Security card
Common business checking account fees in Florida
- Minimum Balance: Some checking accounts require a minimum balance to avoid a monthly fee. If your business is not generating enough revenue to cover this minimum balance then you may find yourself paying a heavy price to maintain your account.
- Monthly Service Fee: Many checking accounts include monthly maintenance fees. One way to avoid these fees is by maintaining a high balance in the account at all times.
- Overdraft Fees: This applies if you write checks or make debit card purchases without having sufficient funds in the account to cover them. These fees can be expensive and can add up quickly if your business practices this regularly.
- Account Closing Fee: If you close your business checking account before the end of the month or year, some banks may charge an early termination fee.
- ATM fees: Bank ATM transactions are free, but they may charge you a fee if you use another bank’s ATM or even your own machine at work.
- Teller Fees: If you open and maintain a business checking account at banks like Chase or Wells Fargo, expect to pay $5-$10 per month for a teller visit (this fee may be waived if certain criteria are met). If you plan on conducting any banking transactions in person, such as depositing cash receipts or cashing checks, expect to pay a fee for each service.
How to choose the best business checking account in Florida
Whether you’re getting your first business checking account or switching to a new one, there are some things you should consider:
- Affordable Fees: While it might be tempting to consider a business checking account with relatively low or no monthly maintenance fees, don’t settle for anything less than one that offers low or no per-check fees as well. The average small business owner writes 8 checks per month, so the additional cost of doing so with a high-fee account can add up quickly.
- Convenience: When choosing a business checking account, convenience is key. Don’t just think about how convenient your bank’s location is to you; think about how convenient its services are as well. If you’re looking for an online-only bank, keep in mind that not all banks offer mobile apps and that some require you to have an internet connection in order to access your funds through an ATM or teller.
- Tiered interest rates: Some banks offer tiered interest rates that can be higher than the standard rate. If you have a large balance, this could be worth your while. There is also often an APY (annual percentage yield) for balances of less than $25,000.
- Support: Make sure the bank provides support for any issues that arise in relation to your checking account. They should be able to offer assistance if there is ever an issue with your debit card or if you forget your PIN number.
- Basic services and features: The most basic features that any business checking account should have include check-writing capability and free ATM access. However, there are many more advanced features that you might want in an account as well. For example, does your company need to be able to use electronic checks or P2P (pay-to-play) transactions? Will online banking and bill paying be important to you? These are additional services that some banks may offer, but not all will include them in every account type.