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The best business bank accounts help you stay in control of your company’s finances — regardless of how small or large it may be. Here’s a rundown of everything you need to know about business banking, so you can easily compare business chequing and savings accounts to find the right one for you.
Business banking refers to business-specific products and services offered by financial institutions, which are designed to help business owners better manage their money. It can encompass many different services, including chequing and savings accounts, as well as business loans, lines of credit and merchant services.
Every business owner — regardless of a company’s size — needs a business bank account to keep their personal and professional finances separate. A business bank account can be used to pay bills, purchase new assets, set aside money for a rainy day and receive payments from customers. In addition, a business bank account can be used to track cash flow for legal and tax purposes.
The 3 most common types of business bank accounts include:
This type of account allows businesses to deposit and withdraw cash through ATM cards, electronic debit cards and cheques. Some business chequing accounts may require a minimum deposit and others will require proof of business and identification. Banks have many different types of chequing accounts, some with transaction limits and some without.
A savings account is an option if you want your money to accrue interest. It provides the business with a place to store liquid assets in order to save up for a big purchase or set aside money to get through slow times. A business savings account may require a minimum deposit amount, though it depends on the bank.
A Guaranteed Investment Certificate (GIC) allows you to put aside money for a fixed amount of time with a fixed amount of interest. It provides a guaranteed return on your investment and can be useful for long-term savings, but there’s usually a penalty fee if you need to withdraw money early.
There are many different types of bank accounts to choose from. When finding the right account for your business, be sure to factor in:
Business bank accounts have quite a few benefits, but there are also some drawbacks to be aware of.
Depending on your business structure, you may be required to open a business bank account. But even if it’s not a requirement, it’s considered best practice to do it anyway. Here are 3 reasons why:
Applying for a business account is a lot like applying for a personal account, but there are a few extra steps you need to take:
If you’re planning on opening a new business account:
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