A business bank account may be necessary if you intend to launch a small business, which accounts for around 33 million in the United States. The challenge, though, is deciding which business bank account is best. Different ones work in different ways, so you might find that one works better in some contexts than another. Here are the many kinds of business bank accounts; read on if you need help deciding which one is best for your organization.
Direct Deposit
The business checking account is a popular choice among corporate customers. In most respects, it functions like a standard bank account. You may rest easy knowing that these accounts accept deposits and are FDIC-insured up to $250,000.
Also, because first-time contributions are generally more reasonable, the barrier to entry is typically low. You can manage your company’s spending and payments with ease, and you have limitless access to the funds via linked checks or debit cards.
Business checking accounts occasionally offer interest, but the rates are typically quite low. Additional capabilities, such as the option to provide debit cards to employees and integrate with accounting software, may also be available to you.
Money Market Account
You can receive interest on money that your firm sets aside in a savings account, just like with a personal account. Nevertheless, you should think about a few limitations. For instance, you might not always have the option to access the funds through an ATM, debit card, or check. Another thing is that six withdrawals per month are usually the maximum.
Additionally, the minimum amount required to start the account could be more than that of a commercial checking account. However, it presents an opportunity to increase your earnings with an FDIC-protected account.
Account for Foreign Currency
Opening a foreign currency account, also known as a borderless or multi-currency account, will benefit businesses that deal in multiple currencies the most. They provide a purpose analogous to that of other types of deposit accounts, such as savings and checking accounts. A foreign currency account, on the other hand, eliminates the need to open individual bank accounts in each country that uses that currency, which can streamline your company’s financial operations.
Most foreign currency accounts allow you to hold a variety of main currencies. That includes the US dollar, Euro, British pound, and Japanese yen. Verify the account’s currency management capabilities to ensure it meets your company’s needs. However, each bank may support different specific currencies.
With a foreign currency account, you can often avoid specific currency exchange costs. Plus, you can usually pick and choose when you convert currencies, so you may take advantage of favorable exchange rates when they happen.
Account for Merchant Services
With a merchant account, your business can take advantage of the convenience of accepting payments made by credit and debit cards. Processing payments into one of your other business bank accounts simplifies the collection process.
Typically, the transaction fees are the most significant negative aspect. You may also be subject to early termination fees, application costs, and setup fees. You should read the fine print to see whether the costs seem fair considering the service you’re receiving, since they can differ from one bank to another.
