Why do you need a business checking account?
A business checking can help you save money, promote efficiency and even get prepared for the future.
The following are three major advantages of having a business checking account:
Faster cash flow: If you have an assistant, you can have them deposit funds into your business checking account on the same day that you receive them. This will allow for faster cash flow and less stress on you during busy times.
Automatic bill payment: You can set up automatic payments for all of your bills through your business checking account so that they will come out on the same day every month without any effort on your part. Then if something changes and those payments do not come out as scheduled, you will know right away and can take care of it quickly before it turns into a problem.
Exposure to new customers: Business owners are constantly looking for new ways to develop their businesses and grow. A business checking account will allow you the ability to offer your customers a convenient way of paying their bills online. This is a great way to attract new customers and keep existing ones.
No-fee access to basic banking services: Basic bank account services such as debit cards, check cards, and online banking are often free or have low fees associated with them with a business checking account.
Greater banking options: Many banks offer additional banking products for business accounts. These may include cash management services, international wire transfers, merchant payment services, and more.
Greater tax advantages for business owners: Having a business checking account allows you greater flexibility in how you manage your finances throughout the year, which can result in greater tax advantages when it comes time to file your taxes.
Accessibility: Most business banks are available 24/7. Thus, you can perform transactions anytime during the day or night and it would not be a problem at all!
What do you need to open a business checking account in Indiana?
The requirements for opening a business checking account vary from bank to bank, but most businesses will need the following:
- Business Tax ID Number (EIN): This number is provided by the IRS with your federal tax return or upon request. Provide your Social Security Number (SSN) instead if you are not required to file taxes. If you’re a sole proprietor, you can use your SSN as your EIN.
- Trust Deed: Must be signed by all of the owners, who must also be listed on the signature card.
- Articles of Incorporation: Must include all owner information, including names and addresses of officers and directors, if applicable.
- DBA Registration: Must include the legal name of the company and location if different from the legal name.
- Proof of your identity: This can be a state-issued ID such as a driver’s license or passport.
- Business Address: It’s important to have a physical address for your business. This can be your home address if you don’t have one yet.
- Bank statements: You need current or previous bank statements in order to open a new business checking account. If they are not current, this may hinder the application process.
- A legal business name, registered with your state.
- Proof of insurance for your business (if applicable).
Common business checking account fees in Indiana
Here are the most common business checking account fees:
- Minimum balance fee: If your business checking account ever falls below a certain balance, you may be charged a monthly fee. These fees can range anywhere from $10-$50 depending on the institution.
- Stop Payment Fee: A stop payment is a type of financial order that tells a bank or lender to not pay out funds from a check that was previously written by the business owner or individual. Expect to pay some fee if you make this order to your bank.
- Account Closing Fee: If you close your business checking account within a certain amount of time (usually 3-6 months), then you might get hit with an account closing fee. This fee is usually around $10-$25, so make sure to read the fine print before deciding to close your account early.
- Transaction fees. This is the cost of actually conducting transactions such as writing checks and using ATMs. Some banks will charge you per check while others will charge based on how much you withdraw from the ATM. Either way, expect to spend some money here if you use your account regularly.
- Overdraft protection transfer fee. Banks offer overdraft protection on their business checking accounts that transfer funds from another account if you don’t have enough cash in yours to cover a transaction. You will pay a fee for any overdraft transaction you make.
How to choose the best business checking account in Indiana
There is a wide variety of business banks out there to choose from. So how do you know which ones to choose? It’s all about finding the right balance between cost and features. Here are a few things to consider:
- Costs: Many small businesses are wary of bank charges, so be clear about any charges you may have to pay. This includes monthly fees, transaction fees, and ATM charges. You may find that some banks waive these fees for higher balances – or for customers who hold other accounts with them, such as a current account.
- Operation hours: Some branches close early in the evening and at weekends, which might not suit everyone’s schedule. If this is important to you, check opening times before applying for an account.
- Simple account management: With all the different ways you can access your money — over the counter, online, via telephone banking — having easy ways to move it around is vital.
- Type of business: Some banks offer special accounts for specific types of businesses, such as those in the healthcare industry, for example. These accounts often offer added perks for those in these industries and can help you save money by providing low or no-cost accounts. For example, some banking companies offer free checking accounts with no monthly fee if you are a healthcare professional who uses direct deposit for their paycheck.
- Consider your business needs: You need to consider how much of your money will be paid in and how much you will withdraw on a monthly basis, as well as the type of card and overdraft protection that is available. It is also important to check what sort of cancellation charges apply.