Why do you need a business checking account?
It’s important to have a business checking account for all your financial needs and offers the safety, security, and convenience that only a business checking account can provide. Here are some reasons why you should consider having one:
- Stay organized: It allows you to manage your finances better and plan out what needs to get done at any given time. It makes it easier for you to keep track of how much money is in your account, where the money is going, and what expenses are being met. Being able to manage your business’s finances in one place will help you save money and work more efficiently. Having a business checking account also helps with budgeting, so you can make sure that your spending aligns with what’s needed for your business.
- Builds reputation for your business: It’s very good for your business reputation if you’re seen as professional and organized and not just some random person running a business from home! And banks usually like to see that your company has been trading for at least three months before they will consider giving you an overdraft facility.
- Separate business and personal finances: Having a separate business account from your personal one will save you time and money when you’re running your business. It will also help you avoid any confusion about where the money for your business is coming from.
- You can easily track expenses: If you use cash for some of your business expenses, it’s easy to lose track of how much you’ve spent at any given time – especially if you have several employees who are also spending company money on a regular basis. But keeping these kinds of expenses separate makes tracking them much easier.
- Better rates on loans: In addition, some banks even offer lower interest rates on business savings accounts, which means that you can save money by using your business checking account to apply for a loan.
- You aren’t personally liable for your company’s debts: If your company goes belly up, then the creditors can go after your personal assets as well as any money in the company accounts, but they can’t touch anything in your personal accounts.
What do you need to open a business checking account in Alaska?
All business banks have similar requirements for a business checking account. The following are the minimum requirements to open a small business checking account:
You need to provide your business name, address, and phone number to the bank.
You will also need to give the bank your SSN or EIN number.
If you do not have an EIN number yet, you can use your social security number (SSN) as the tax ID or Federal Identification Number (FID).
Your business owner(s) should complete the application form with their personal information, including their occupation and employer information which will be used by the bank to verify with IRS (Internal Revenue Service) that you are a tax-paying citizen. Therefore, this is one of the most important steps in starting a new business checking account.
In addition, you will also be required to provide your driver’s license or passport to prove that you are who you say you are and that you are legally allowed to conduct business in the state.
Common business checking account fees in Alaska
Here are some of the most common fees banks charge in Alaska for business checking accounts:
- Business Account Maintenance Fees: Many accounts come with some sort of monthly fee in order to maintain the account. These fees range anywhere from $5 to $40 per month.
- Monthly Statements: Some businesses prefer to receive paper statements for their accounts, even though they can be easily accessed online through their bank’s website. If you receive paper statements, expect to pay $2 to $5 per statement.
- ATM Fees: The amount charged from using an ATM that is not owned by your bank.
- Transaction Fees: The cost of doing business or receiving your income through your account.
- Minimum balance fees: Many online banks don’t charge a monthly fee, but they do charge a monthly minimum balance fee if you don’t maintain a certain amount in your account. For example, many require a $1,000 to $5,000 minimum balance to avoid a monthly service fee.
How to choose the best business checking account in Alaska
When you’re looking for a business checking account, there are a number of things you’ll want to consider. Here are some tips to help you make the right choice:
- Speed and convenience: many small businesses operate on tight cash flow, so it’s important to minimize time spent on paperwork and bureaucracy. The best-rated banks are those that offer internet or mobile banking facilities or where you can visit a branch without an appointment.
- The right service: some businesses need a comprehensive range of services while others just want something simple they can rely on day in and day out. So it’s important to find a bank with the right mix of features at a price that suits you.
- Fees: Many banks have monthly service fees for basic checking accounts, and these fees can add up quickly if you don’t shop around. Look closely at any fees associated with your business checking account, and try to avoid accounts with lots of fees.
- Loan rates: Take a look at what kind of interest rates banks are charging on loans, and make sure they’re competitive with other banks in your area. Banks that offer competitive loan rates may offer better terms overall because they’re willing to work harder to make sure your business stays with them long-term.
- Teller availability/service: You want a bank that has plenty of branches and ATMs throughout your area so that you can have flawless transactions with minimum interruptions.