Why do you need a business checking account?
A business checking account is the first step to running a successful business. It is one of the basic necessities for any company, no matter how small it is. Here are some of the best benefits you can enjoy when you open a business checking account:
- You can expand your reach: A business checking account allows your customers to pay you in more ways. They can deposit checks, make withdrawals, and fund their accounts electronically. By helping your customers pay you in these different ways, it increases your cash flow and allows you to collect revenue from multiple sources.
- Better recordkeeping: When your business has its own bank account, it makes it easier to keep track of expenses on the books so that they can be recorded properly for tax purposes and financial planning purposes. You will also be able to keep track of deposits, receipts, and disbursements in order to determine how much cash your business is transacting.
- Reduced risk of fraud: Business checking accounts are more secure than personal ones because they’re not linked directly to your personal checking account. If your company were to be victimized by check fraud, the loss would be limited to the amount of the single fraudulent check rather than hundreds or thousands of dollars.
- Convenience: If you run a small business, it’s likely that most of your time is spent managing the day-to-day operations. That’s why having an easy-to-use bank account can make a big difference in how much time you spend on accounting. Traditional business checking accounts often have more features than personal accounts, so they’re easier to manage, even if you don’t have a lot of experience with bookkeeping.
- Online banking: Many banks offer online banking services that allow you to easily access your accounts and make transactions regardless of where you are.
What do you need to open a business checking account in Maine?
When you’re opening a business checking account in Maine, here’s what you need to provide:
- Business name: You’ll need to register your business with the state by filing an assumed name certificate if it’s not already listed. The state will register your assumed name for free. You can open your account with that name or use another one.
- Business and personal financial statements or other identifying documents. To open a business checking account in Maine, you’ll need to provide some documents that prove that you own the business and can operate it responsibly. Your personal financial statements are one option; if they’re not available at the time you open your account, ask for an alternative document such as a business tax return or other legal documents that shows that you have access to adequate funds for operating expenses.
- Proof of address. Most banks and credit unions will require proof of address in the form of a utility bill; many also accept bank statements from other financial institutions.
- A business tax identification number, or EIN. This is a nine-digit number used by the IRS to identify businesses for tax purposes. If you have employees, your company will probably want this number. A social security number (or tax ID) for each owner of the business.
- Articles of Organization (if applicable).
Common business checking account fees in Maine
Here is a list of common business checking account fees in Maine:
- Account opening fees: Most business checking accounts require you to pay a one-time fee when you open an account. These fees typically range from $15 to $50 or more for most accounts, but some banks don’t charge any fees at all for their business checking accounts. If you’re shopping around for a new account, find out whether any fees will apply before signing up.
- Minimum Balance Fee: This fee is a charge for keeping your business checking account balance below the required minimum. If you consistently maintain the minimum balance, you will be charged a monthly fee.
- A monthly maintenance fee: This fee is used to cover the cost of keeping the account open and available for transactions.
- Teller fees: Banks typically charge customers a fee to use the teller line at a branch or bank ATM to make cash withdrawals or deposits. Bank customers can avoid this fee by using 24-hour ATMs, which are usually free to use.
- Overdraft fees: If you try to make a purchase or withdrawal for more money than is in your account balance, you can get slapped with an overdraft fee. The average overdraft fee is about $35 per transaction, so be careful not to overdraw your account accidentally!
- Paper statement fees: Most business checking accounts include paper statements (or at least offer them for free). However, some banks charge a fee for all paper statements requested to be mailed to them.
How to choose the best business checking account in Maine
Tread carefully when comparing businesses checking accounts online. The best deals may come with hidden fees or restrictions that negate the initial discount. Here are some things to consider when choosing a business checking account:
- ATM access: The ability to use your debit card for cash advances is important for running your business. However, many businesses find the cost of using an ATM outweighs the convenience of having one nearby. Before committing to a plan check the fees charged by your bank for using another bank’s ATM or for using an out-of-network ATM.
- Business debit card: A business check card gives you the freedom to pay for expenses without carrying cash, but watch out for fees charged by your bank and other financial institutions that process transactions on your behalf. Some banks charge additional fees if you use your debit card at an ATM outside their network, which can result in significant savings over time.
- Type of checking account: Do you want an interest-bearing or non-interest-bearing account? Would an online or brick-and-mortar bank be better? Do you want the ability to write checks? If you’re planning on paying bills through your bank, do they offer automatic payments for those bills? Location is important if you want to visit your business’s bank in person; otherwise, an online bank might be best.
- Packages: Some banks offer packages that bundle services such as business cards and checks into one price. These packages can save money if they include all the services you need, but they also have the potential to be more expensive than purchasing each service separately.
- Minimum balance requirements: Many banks require a minimum balance in the account to help offset the costs of maintaining the account and providing customer service. Without enough money in the account, it might be closed or converted to an individual checking account — both of which can have negative impacts on your score.