Why do you need a business checking account?
In a business, even the most minor purchases can make a difference. That’s where business checking accounts come in handy. Here are some reasons why having a business checking account is key for your business’s growth:
- Separate your income and expenses: It is crucial that you keep track of your income and expenses separately from your personal finances. It’s also important that you have different bank accounts for each of these categories. By doing so, it will be easier for you to decide what you can spend and what should be set aside to pay taxes or save for future expenses.
- Avoid problems with the IRS: The IRS wants to ensure that small businesses comply with all the filing requirements in order to avoid any problems in the future. Opening a separate bank account is one way that they know that your small business is separate from your personal finances.
- Saving time by banking online: Setting up a business checking account allows you to enjoy banking services quickly and easily via the internet – no more waiting in line at the bank! This means that you can pay your bills, check your balance, and transfer funds whenever it suits you.
- Convenience: You can access your money at any time without worrying about inquiring about customers and the like. In addition, maintaining an account enables you to pay your employees on time, and in turn, this motivates them to work harder for you.
- Cash flow management: Another advantage is that with a business checking account, you don’t have to wait for checks to clear before making more purchases or paying more bills. Withdrawing money from your account at any given time helps you manage cash flow better. Businesses run on a daily basis and having an account enables you to keep track of all your finances in one place.
What do you need to open a business checking account in Connecticut?
Opening a business checking account is not as complicated as opening a personal checking account. In fact, the process is much simpler and requires fewer documents. You will need to gather information about your business, such as the business name, federal tax ID, and the address of your business location. You will also need to provide information about yourself, including your personal Social Security number and driver’s license or state identification card. Additional documents may be required depending upon the type of checking account you choose and whether you are opening the account online or in-person at a bank branch office.
Common business checking account fees in Connecticut
Here are the most common business checking account fees:
- Minimum balance fee: This fee is often used to offset the cost of maintaining a branch location or other overhead costs associated with doing business as a bank. Many banks waive this fee if you maintain a minimum monthly balance or have a direct deposit.
- Checks returned unpaid: When one of your checks is returned for any reason — insufficient funds (NSF), closed account, and more — you will be charged a fee by your bank and may have some trouble writing new checks until the issue is resolved.
- Stop payment/stop deposit order: In the event, you need to stop payment on an issued check after it has been deposited in another account, you can ask your bank to place a stop on that check via telephone or through an online banking portal. The bank will charge you a fee to do this for you.
- Monthly maintenance fee: Some banks charge an annual fee ($10-$100) just to have a business checking account. Other banks charge a monthly fee ranging from $5-$25.
- ATM fees: Business checking accounts will often include free ATM access at thousands of locations for both free and fee-based cash withdrawals. Some small business checking accounts charge an ATM fee if there are more than a certain number of transactions at non-bank ATMs per month.
How to choose the best business checking account in Connecticut
By understanding what you need out of your business checking account you can get the best deal for your business. Here are some things to consider when choosing a business checking account:
- Tiered Interest Rates: Many banks offer tiered interest rates on their business checking accounts. Even if you have a low balance, you can still earn interest at a higher rate than other non-interest-bearing accounts. This means more money in your pocket at the end of each month.
- Free Checks: The best business checking account should provide free checks for all of your employees and yourself if you’re a sole proprietor. It’s also important to note that these usually aren’t big checks like you’d use for payroll, but rather standard-sized checks that can be used for paying bills and making deposits.
- Mobile banking: The best way to go about business is by being able to access your funds from anywhere. Mobile banking allows you to do that by allowing you to check your balance, make transfers, deposit checks, and more from your mobile device or personal computer anytime you want.
- Fees: When considering the best business checking account, you should make sure that it has the right features and fees that match your business needs. As a small business owner, you may want an account with no fees but sometimes you have to pay a monthly fee for online or mobile banking. If you decide on an account that isn’t free, make sure it has enough benefits and features so it’s worth the monthly fee.
- Security: Choose an account that offers security on each transaction. You don’t want your information being misused or stolen by hackers. Before choosing a certain bank make sure their servers are secure and their users are protected from unauthorized access.
- Customer Service: If you ever have any questions about your account, how easy is it to get in touch with a representative? Is there customer service available after hours or on weekends if needed?