Why do you need a business checking account?
Having a business checking account is convenient and profitable. Here are ten advantages of having a business checking account:
- Keep track of your finances: When you open a business checking account, you are given reports that detail how much money your business has deposited, how much money you have withdrawn, and the total amount outstanding. This is to help you make good decisions when it comes to spending and saving, as well as understanding your cash flow needs.
- Helps you stay organized: business checking accounts can save you a lot of time in the long run because they allow you to organize your financial records in one place which makes it much easier for you or anybody else in your company who needs access to financial information. You will also be able to print out checks instead of writing them out by hand which makes everything much easier on everyone.
- Line of credit: Having access to a line of credit can be very helpful if you need short-term financing. If you want to take advantage of this service, be sure to read the fine print carefully so that you do not end up with a loan that is too expensive for your business to handle.
- Payroll: You can write checks from your business checking account for business expenses such as advertising, supplies, and even employee salaries, providing an extra layer of protection between you and the IRS if they ever audit you.
- Security and convenience: Online banking is easy to use so you can access your accounts from anywhere, at any time. 24/7 telephone and internet banking services are also provided by most banks.
What do you need to open a business checking account in Delaware?
- To open a business checking account, you will need to supply the following:
- Social Security Number
- Driver’s license or state-issued photo ID
- Business EIN (Employer Identification Number) if you have one
- Banking or credit card statements proving your identity
- Payroll stubs or tax returns if you have employees
- Business address and phone number if it is different than your home address and phone number.
Common business checking account fees in Delaware
- Minimum balance fees: Business checking accounts typically require higher balances than personal accounts — sometimes as much as $25,000 or more. If the balance falls below this threshold in any given month, the bank may charge a fee.
- Monthly service fee: This is the most common type of bank fee for businesses and it can be found on basic business checking accounts. These fees average about $12 per month. Some banks will waive this fee if you maintain a certain balance in your account or if you meet other requirements such as having a minimum number of transactions.
- Overdraft fee: Overdraft protection is a service offered by many banks that automatically transfers money from another source (like savings or a line of credit) to cover checks and other transactions that would otherwise bounce due to insufficient funds. The cost varies by bank, but expect to pay between $5 and $15 per occurrence.
- ATM fees for non-network ATMs: You may not get charged for using an ATM that’s part of the same bank, but if you use a non-network ATM, you’ll likely incur additional fees on top of transaction fees required by the ATM itself.
- Transaction fee: If your business regularly conducts transactions using checks or drafts, additional transaction fees may apply on top of the charges from the issuing bank and any network fees charged by the receiving financial institution.
- Paper Statement Fee: Many business accounts require the recipient of the statement to be notified via postal mail rather than email. If this is the case, expect to pay between $2-$6 for every statement mailed out.
How to choose the best business checking account in Delaware
Tons of business owners have been stuck with bad checking accounts. You don’t want to be one of them. We’ll show you how to choose the best business checking account with these top considerations:
- Free checks: Some banks charge up to $25 per box of checks, so this is an important feature. Some banks also offer free checks to their customers but charge if you want to order online or by phone.
- Free online bank statements: Many banks charge $4 per month for electronic statements, although some offer them for free. You should get statements via e-mail or on your computer — not mailed — because that allows you to check balances and transaction details at any time. To see if yours do, call or log onto the bank’s website before applying for a checking account.
- Resources: You also need to take into consideration what type of resources you have available to you in order to run your business. Do you have online or mobile banking? If so, then you may want to choose an account that offers these conveniences.
- Online experience: Your bank should also be equipped with online access so that you can check on your accounts from anywhere at any time. This allows for real-time monitoring of your accounts which is essential when running a busy business.
- Types of transactions and their fees: Some types of transactions come with extra fees, such as NSF (non-sufficient funds) or overdrafts (bounced checks). If you’ll have a lot of these transactions, choose a bank that doesn’t charge for them too often.
- Possibility of paperless statements: If you have employees who travel frequently, make sure they can access funds when they’re away from the office by including their debit card on the account. And if you have a mobile workforce that needs to process credit cards over the phone, find out if your bank allows you to issue cards for remote employees or customers.
- Accessibility/Location: Some banks only have a few branches, while others may have hundreds. You may want access to a local branch for convenience reasons, or you may prefer online services and ATMs for convenience.