Why do you need a business checking account?
Here are some of the most common benefits that come with a business checking account:
- Tax-advantaged: If you’re in a business for yourself, then you know in order to run smoothly, it has to make some money. The issue is that if you end up making more than $400 or so in profit a year, then the IRS will want their share of taxes paid on those profits. Having a business checking account allows you to take advantage of certain tax write-offs and helps keep your taxes at bay.
- An added level of security: This means that no one else will be able to get into the account without your knowledge. You will be able to ensure that everything that is done with your money will be done how you want it because no one else will have access to it. Having this level of security makes you feel more comfortable with all of your money being held in one location and not having to worry about someone stealing it or taking it for their own use.
- You accept payments more easily: The ability to accept credit cards is one of the most convenient features of a business checking account. To accept credit card payments, you must have an online merchant account. Some banks offer merchant services with their business checking accounts, while others require you to use third-party merchant services.
- Easy money management: Business owners can easily manage their finances through their business checking accounts because they can easily track expenses and revenue on a daily basis.
- Faster Funds Availability: Business checking accounts offer faster funds availability than other types of accounts, such as savings or money market accounts. This means you can typically withdraw funds from your account on the same day that they’re deposited.
What do you need to open a business checking account in Minnesota?
- Articles of incorporation: This is a piece of paper that says you incorporated your business. You can get it from the Secretary of State’s office.
- Corporate Resolution: This is what gives power to the people who own the company to act on its behalf when signing any checks or making any other agreements with vendors or clients.
- Proof of identification: You will need to show identification with a picture on it. This can be a driver’s license or any other government-issued ID. If you do not have one at this time, take a passport picture with you when applying so you can get one before submitting your application.
- Proof of your business address and/or corporate formation documents. These might be things such as a utility bill, lease agreement, or articles of incorporation for your company.
- Proof of your legal existence in the state of Minnesota by showing a certificate of good standing and/or an official corporate registration issued by the state that shows your company is legally registered to do business there with the Secretary of State (in Minnesota).
- Business License.
Common business checking account fees in Minnesota
Here are some of the most common business checking account fees in Minnesota and how they affect you:
- ATM withdrawal fee: Some banks require customers to pay for any ATM withdrawals made from their accounts, whether at in-network or out-of-network ATMs. A few banks even charge for using their own ATMs! Make sure you know what kinds of transactions will cost you money before committing to a new bank account.
- Business Overdraft Fee: If you write checks that exceed your account balance, you can be charged a per-item fee. To avoid this type of fee, ask your bank about overdraft protection.
- Wire Transfer Fee: If you’re sending money from one bank to another, there may be a fee associated with it. In most cases, wire transfers are free if your account is linked to another bank or financial institution, but charges can apply for money sent to non-affiliated institutions.
- Check printing fee: If you plan on issuing your own custom checks, be sure to ask about the cost of printing them before ordering a large batch. Some banks offer free checks while others charge around $2 per order.
- Paper statement fee: If a business would like to get paper statements, they will have to pay a fee a month unless the bank offers free paper statements.
- Overdraft Fee: Overdraft fees are charged when there are not enough funds in the checking account to cover an ATM transaction or check that was written.
How to choose the best business checking account in Minnesota
Whether you’re a small business owner or just looking for a business checking account, there are several things to consider. There are also many different types of accounts to choose from. The right one depends on your needs, so how do you find the right one? Here is how to choose the best business checking account for your business:
- Security: If you’re concerned about security, choose an online-only bank that offers 24/7 monitoring. This way, you won’t be worried about losing your business’s cash and checks if a holdup occurs at your physical location.
- Availability of Funds: You will want to know whether your money is available immediately or only after a certain amount of time has passed (the latter being referred to as “float”). Some accounts make funds immediately available, while others hold them for three days before releasing them to you. It is important to keep this in mind when planning your cash flow needs.
- Types of Transactions: Depending on how you operate your business, you may need certain types of transactions to be available through your account (such as wire transfers). Make sure you choose a bank with favorable terms on the types of transactions you are looking for.
- Minimum balance: Some banks require a certain minimum balance to open a new account. There may also be monthly maintenance fees if there is not enough money in the account to meet the required balance level. If your business does not have much money at first, it may be helpful to find an account that doesn’t require a high minimum balance to open an account. Some banks will waive any opening fees if you open an account with them, so do some research before choosing a bank and make sure they don’t charge any fees or have a high minimum balance requirement if you are just starting out.
- Fees: In most cases, your business will have to pay a fee when it opens up an account. These costs can be waived or lowered if the company has a minimum balance in its account or makes certain types of transactions within a certain period of time. Many banks also charge fees for specific services such as expedited payments, wire transfers, foreign currency exchanges and more. Other fees may also be applied if your company exceeds the number of checks they write each month or if they exceed the number of transactions they make within a specific period of time. Always read the fine print before you sign up for any new account so that you understand all of the costs associated with using the service!