Why do you need a business checking account?
Having your own business checking account can be crucial to the success of your business. Banks offer a lot of perks to their business customers, and you should take advantage of as many as possible. Here are some of the main benefits you can expect:
- Accessibility: Open a business checking account with an online bank, and you’ll have access to your money 24/7 from anywhere in the world. No more worrying about branches being open during normal business hours or having to wait for checks to clear. You won’t pay any fees for using ATMs, either. Many banks offer unlimited ATM withdrawals for all accounts, so you don’t have to worry about paying that fee every time you get cash from an ATM.
- Security and privacy: Business accounts are designed to help protect your money from fraud and identity theft. Your money is insured by the Federal Deposit Insurance Corporation (FDIC), up to $250,000, with most banks offering additional coverage on top of that. Most online banks also offer security features such as two-factor authentication and fingerprint ID technology, which help to keep your account information safe and secure.
- Access to merchant services: When you open a new business account, you often get access to merchant services as well. This allows your company to accept payment via credit cards through most major providers such as Visa, MasterCard, and American Express.
- Tracking expenses is easier: With one account, you have access to all of your finances at any time. This makes it easier to track any expenses that might be related to your business and to compile them all together when it comes time to pay taxes.
- Tax benefits: Opening a business checking account is beneficial because it helps you save tax dollars. The government offers certain tax breaks to businesses that are registered corporations.
What do you need to open a business checking account in Colorado?
Fortunately, opening a business checking account is pretty easy. You need to have the following, though:
- A valid business license if you are a business.
- Federal Tax ID Number (FEIN).
- Personal information (including social security number) for each owner of the business.
- State tax id number or state employer identification number (EIN) if the business is a corporation, partnership, or limited liability company.
- Residence address and telephone number for each individual.
- Bank statements and past two years’ tax returns for all owners of the business, if applicable.
- Copies of all business licenses, and permits.
Common business checking account fees in Colorado
Here are some common charges associated with business checking accounts:
- Account maintenance fees: If you don’t keep a certain minimum balance in your account, the bank could charge you a monthly fee.
- ATM usage fees: Banks may charge ATM usage fees to take money out of your business account at another bank’s ATM.
- Overdraft fees: If your account is linked to an overdraft line of credit, it could be charged if you don’t have enough money in the account to cover a transaction.
- Stop payment fees: If you ask for a check or electronic payment to be stopped, the bank may charge you for the service.
- Minimum balance fee: This is the smallest amount of money you must keep in your account at all times to avoid paying a fee. For example, if you have an account with a minimum balance of $300, and your balance drops below $300 at any point during the month, your bank will charge you for that month.
- Paper statement fee: In the past, businesses paid their bills with paper checks instead of electronically debiting their account. The use of paper checks has declined over the years as more businesses have adopted electronic payments. However, not all banks waive this fee if you choose to receive paper statements instead of opting for online banking access and e-statements.
How to choose the best business checking account in Colorado
Choosing a business checking account can be difficult. There are many different options available to you. You will want to look for a checking account that fits your needs and budget. Some businesses need a large amount of transactions per month and others need very few transactions.
The best business checking account will offer you the most benefits for your specific needs. The best business checking accounts will also offer you great service from the bank.
Here are some tips to help you choose the best business checking account for your business:
- Tiered pricing options: Banks and credit unions typically offer tiered pricing depending on the type of business. So, for example, a bank or credit union might offer free checking for businesses with $1 million or less in annual revenue, and charge $25 per month for accounts under $10,000 in annual revenue. If your business is larger than that, you should find out what your options are before opening an account.
- Online banking: Does it have mobile apps? Can I do everything on my phone or tablet? Is there an easy way to deposit checks? How easy is it to pay bills online? Can I set up automatic bill payments or transfer money from my other accounts?
- Types of fees: Look for a bank that offers free checking and one that doesn’t charge ATM fees. In addition, banks will charge monthly maintenance or service fees for certain accounts, so make sure you know what these are.
- Minimum balance requirements: Banks will require a minimum balance in order to avoid monthly service fees and overdraft charges. This might not be an issue for your business if you have no trouble keeping a large amount in your account at all times. But if you don’t carry much cash in your account, it’s something to consider.
- Other features: Depending on what you need from your account, other features might be important as well. For example, if you plan to take out loans from the bank or do some joint checking, online banking might be important to you. Also, look for free bill pay and online statements in order to save money on postage.