Monday, March 4, 2024
HomeloansDo You Need A Business Checking Account?

Do You Need A Business Checking Account?

When it comes to running your small business, you may feel tempted to dump all your business expenses and earnings into your personal checking account for the sake of convenience. You’re a busy entrepreneur with a ton of information to track — why bother adding to the load by keeping separate checking accounts?
It turns out there are plenty of reasons to draw a bright line between your personal and business finances, including your checking accounts. Below, CNBC Select breaks down these benefits and explains how to set up your business checking account.
What we’ll cover
Simplify your tax process
If you think commingling your business and personal funds in the same checking account will save you some time, you’re in for a rude awakening when you file your business taxes. You would need to go through potentially thousands of transactions and be able to identify which ones were meant solely for business needs vs. your personal life to avoid all sorts of tax (and potentially legal) headaches. However, if you keep those transactions within a business checking account, you’ll have to do much less leg work come tax time. This also makes it easier for you to import your transactions onto platforms like QuickBooks, which will then sort your transactions into different tax categories and organize your transactions so you see where your business’s money goes. In this sense, you’re working smarter, not harder.
QuickBooks® Online Learn More On Intuit’s secure site Cost 30-day free trial then plan options include: Simple Start for $15 per month, Essentials for $30 per month, Plus for $45 per month and Advanced for $100 per month
Standout features Tracks your business expenses as they happen, as well as your income. Users can use app to do invoicing, accept payments, manage their cash flow, maximize tax deductions, track travel miles, run reports, send estimates, manage bills and 1099 contractors, plus pay employees
Categorizes your expenses Yes
Links to accounts Yes, bank and credit cards, plus third-party apps like PayPal and Square
Availability Accessible from any web browser and also offered in both the App Store (for iOS) and on Google Play (for Android)
Security features Verisign scanning, password-protected login, firewall protected servers and the same encryption technology (128 bit SSL) used by the world’s top banks. QuickBooks also offers multiple permission levels that you can set for additional users’ access Terms apply.
Get access to a business debit card
A business debit card can help you maintain the line between your personal spending and your business spending, which, again, keeps things organized when you file your taxes. Many business checking accounts will issue multiple debit cards, so you can give employees access to your funds (a feature most personal accounts lack). For instance, Chase Business Complete Banking® allows the checking account owner to get individual debit cards and PINs for employees and the owner can set daily limits on the spending. This helps empower your team to order business supplies (for example) while still giving you insight into what’s being purchased through the company so you can report those transactions during tax time.
Chase Business Complete Banking® Learn More Chase Bank is a Member FDIC. Special offer Earn $300 when you open a new Chase Business Complete Checking® account. For new Chase business checking customers with qualifying activities.
Monthly maintenance fee $15, with options to waive
Minimum deposit to open None
Minimum balance None required but maintaining a minimum daily balance of $2,000 in your account as of the beginning of each day of the statement period will waive the monthly maintenance fee
Annual Percentage Yield (APY) N/A
Free ATM network More than 16,000 Chase ATMs
ATM fee reimbursement None
Small business perks Multiple owners get individual debit cards, PINs and online access to the account; debit cards for employees for which the owner can control daily limits
Overdraft fee $34 with ways to waive
Mobile check deposit Yes, using the Chase Mobile® app Terms apply. Chase Bank is a Member FDIC. How to avoid the monthly fee: Meet one of these conditions during your monthly statement period. $2,000 minimum daily balance
$2,000 in purchases on your Chase Ink ® Business Card(s)
Business Card(s) $2,000 in deposits from QuickAccept℠ and/or other eligible Chase Merchant Services transactions
Link a Chase Private Client Checking℠ account
The Bluevine Business Checking account even rewards you for spending with its debit card. If you spend $500 per month with Bluevine Business Debit Mastercard® you’ll be eligible to earn 2.0% APY on checking account balances up to and including $250,000. The other requirement to be able to earn the APY is to receive $2,500 per month in customer payments into the account through ACH, wire transfer, mobile check deposit, or directly from a merchant payment processing provider.
Bluevine Business Checking Learn More On Bluevine’s secure site Special offer N/A
Monthly maintenance fee $0
Minimum deposit to open $0
Minimum balance $0
Annual Percentage Yield (APY) Standard: 2.0% APY on balances up to and including $250,000 if you meet a monthly activity goal*
Premier: 4.25% APY without minimum qualifications
Free ATM network No fees at over 38,000 ATM locations nationwide
ATM fee reimbursement No
Small business perks Two free checkbooks
Overdraft fee $0
Mobile check deposit Yes Terms apply. Bluevine accounts are FDIC insured up to $3 million per depositor through Coastal Community Bank, Member FDIC *The requirements to earn interest are either: Debit Card Spend: Spend $500 per month with Bluevine Business Debit Mastercard® issued by Coastal Community Bank pursuant to a license from Mastercard inc, which can be used everywhere Mastercard® is accepted. Incoming Payments: Receive $2,500 per month in customer payments into Bluevine Business Checking account via ACH, wire transfer, mobile check deposit, or directly from merchant payment processing provider
Plus, a business debit card is a low-stakes way to get comfortable with business spending before you take the leap to apply for a business credit card.
Apply for business loans and grants
If you ever need additional funding for your business, you might turn to business loans or business grants. Of course, you’ll need a checking account for your funds to be deposited into. Many business loan lenders and grant programs require you to have a business checking account in order to apply. So if you think your personal checking account should be good enough for now, you might be disqualifying yourself from major funding opportunities.
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Access business-related perks
Personal checking accounts don’t usually come with perks or welcome bonuses but some business checking accounts help you earn benefits that can help you run your business more smoothly. For instance, after signing up for the Novo Business Checking account, you can get a host of perks including $3,000 in Google Cloud credits, $150 toward Google Ads, 40% off your first six months of QuickBooks Online and up to $20,000 in fee-free credit card transactions when you link your checking account with Stripe. Offers like this can help give you a leg up when it comes to affordably launching and managing your business in the early days. So if you manage to find a business checking account with some extra perks, it could be worth exploring.
Novo Business Checking Learn More On Novo Bank’s secure site Special offers Perks upon sign up can include $3,000 in Google Cloud credits, $150 toward Google Ads, 40% off the first six months of QuickBooks Online and up to $20,000 in fee-free credit card transactions when you link your account with Stripe
Monthly maintenance fee $0
Minimum deposit to open $0
Minimum balance $0
Annual Percentage Yield (APY) None
Free ATM network No out-of-network ATM fees and reimburses fees charged by other ATM operators, up to $7 per month
ATM fee reimbursement Yes, up to $7 per month worldwide
Small business perks Sync your account with Slack, Stripe, Shopify, Quickbooks, TransferWise, Xero, Zapier and other popular merchant tools. Amazon integration for sales and revenue tracking.
Overdraft fee No overdraft fee but has a nonsufficient funds fee of $27
Mobile check deposit Yes Terms apply. Novo is FDIC-insured through Middlesex Federal Savings.
How to open a business checking account
Opening a business checking account is a lot like opening a personal one. Once you decide which bank you want to go with, you sign up for the account by inputting your personal details such as your name, address, date of birth and Social Security number. But for business checking accounts, you’ll also need to provide information on your business, like the business name, business address and phone number, employer identification number if you have it and what type of business entity you have (LLC, sole proprietorship, etc.). You may also need additional documentation like a business license and name registration certificate. It can be helpful to ask the bank for a checklist of everything you’ll need and prepare all your documents before you sit down to officially open the account.
Bottom line
If you have a business — no matter what its size — it’s a good idea to avoid relying on your personal checking account and instead open a business account. Not only does that help you avoid some big tax pitfalls, but it also gives you access to different features that should mesh better with what you need from your checking account.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of business checking account products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. Catch up on CNBC Select’s in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.



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