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Navigating Checking Accounts for Small Businesses

Running a small business is no small feat, especially when making the right financial decisions for your unique business needs. But one of the first (and easiest) decisions you can make is opening a small business banking account. Doing so helps you track and manage your business finances as well as separates your business transactions from your personal ones. Here are the few things you should consider as you research business checking accounts.

Choosing a Business Checking Account

There are many factors that play into choosing a small business checking account. If you are just starting out, have no employees, and only have a few transactions each month, you may not need one just yet. However, as soon as you start to grow and business becomes more consistent, acquiring a designated business account can work in your favor and may be necessary.

The US Small Business Administration (SBA) recommends opening a business bank account if you have applied for an employee identification number (EIN). Additionally, the more transactions—both incoming and outgoing—that you have make tracking finances in a separate account much easier. This also applies to businesses that have become incorporated or need business loans. The IRS requires incorporated companies to have a business checking account and bank lenders often see these accounts as a requirement for securing funds.

The right checking account entirely depends on your business and how it operates. Some business checking accounts incur fees if you exceed a certain amount of transactions per month. If you have high transaction activity, a checking account of this nature probably won’t suit your business.

When researching the right account for your business, always be sure to look into the associated fees and minimum requirements. For example, some banks charge fees if you cannot meet a certain minimum balance each month. You also may see transaction fees for going over your limited amount of allowed transactions per month, as well as out-of-network ATM fees and maximum deposit fees.

You also want to consider the perks and benefits of opening a business checking account. This includes:

  • Convenience. Does the account offer online and mobile banking? This can make a world of difference for small business owners who are constantly in “go-mode” and need to view their transactions, manage payments, and make transfers whenever and wherever they are.
  • Interest payments. Many online checking accounts offer higher interest rates if you deposit a certain amount or meet designated requirements every month.
  • Merchant services. Your business account needs merchant services to accept credit and debit card payments from customers. This can be offered through your bank as well as third-party processers.

Fund Protection and Insurance

Before choosing a business checking account, ensure that it is a member of the Federal Deposit Insurance Corporation (FDIC). The FDIC provides banks and other financial institutions with insurance for any deposits you make into your checking and/or savings accounts (as well as others) to keep your money protected.

Opening a Business Checking Account

Once you’ve chosen the right account for your business, opening one is a simple process. You can choose to either call a representative at your bank or financial institution, or simply open an account online in a few easy steps.

At Republic Bank, we offer a range of business checking account options to suit your business with little to no monthly maintenance fees or minimums required. To learn more, visit our website or call our experts at 800-526-9127. Plus, visit our library of resources for other helpful financial tips.

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