Why do you need a business checking account?
Many business owners think that a simple savings account will do, but there are some great reasons why you should have a business checking account:
- Separate personal and business finances: As a business owner, it is important to keep your personal finances separate from your company’s. This will make it easier to manage your finances and make decisions for your business. It also helps you avoid any tax implications if you need to make money transfers between your personal and business accounts.
- Track your income: If you are a business owner, it’s important to know where your money is coming from and going. This is the only way you can make sure you are profitable and keep yourself on the right path. One of the best ways to do this is by tracking your money using a business checking account. Business checking accounts can help you track your income, expenses, and balance all in one place. They are also good for helping you to manage your money, which can be very helpful if you are a newer entrepreneur.
- Sharing an account: Many times it is necessary for more than one person to place orders, monitor funds, and close out accounts. Business checking accounts will allow multiple signers on an account so that all financial management duties can be handled by one or many people.
- Tax benefits: There are also some tax benefits associated with owning a business checking account. If your company incurs expenses due to the use of this account, those expenses can be written off on your taxes. For example, if you pay for checks with a business checking account, those expenditures could be deducted from your taxes, saving your company money in the long run.
- Convenience: Most business checking accounts will allow customers to make deposits at any ATM or local bank in the area. This is especially convenient if there are no bank branches located nearby.
What do you need to open a business checking account in New York?
To open a business checking account, you’ll need:
- A local business address (see our post on finding a place for your business)
- Proof of your identity (like your driver’s license and state-issued ID)
- Proof of your legal right to do business in the U.S. (such as a copy of the Certificate of Doing Business in the State issued by the local state Secretary of State’s office).
- Certificate of incorporation
- Proof of address. This could include official mail addressed to you at both addresses, such as utility bills or credit card statements.
Common business checking account fees in New York
Business checking accounts come with a variety of fees, so it’s important to shop around for one that fits your needs and budget. Here are some of the most common bank charges for a business checking account:
- Minimum balance fee: Some banks require a minimum balance in order to waive monthly service fees. This is a common requirement for basic business accounts, but there are ways to get around it. For example, some banks will waive this fee if you maintain a high average daily balance or meet other requirements.
- Overdraft fee: When you overdraw your account, your bank charges you for the privilege. Overdraft fees usually range from $10 to $40 per transaction. However, some banks do offer overdraft protection programs that can save you money.
- Paper statement fee: Some banks charge $5 or more if you want a paper statement mailed to you instead of viewing it digitally online.
- Monthly maintenance fee: Many banks assess a monthly maintenance fee, which is usually around $10. Although it’s not very costly, this fee can add up over time.
- Paper statement fee: This isn’t very common anymore; only three of the 18 banks we reviewed charged for paper statements. None charged more than $2; most charged 50 cents to 75 cents. For example, you’d have to get 10 statements (or statements and copies) to reach that maximum amount of $10.
How to choose the best business checking account in New York
The key to choosing the best business checking account is first understanding its purpose. The following list outlines several things you should consider when reviewing any business checking account:
- Accessibility: A good business checking account should offer easy access via online banking, mobile app, and physical branches. You want a bank that will allow you to access your account as easily as possible. Keeping your finances accessible is important.
- Interest Rates: Different banks offer different interest rates and benefits, so it’s important to compare your options before applying for an account. How much you earn on your money is part of choosing the best business checking account.
- Fees: Compare any fees for maintaining an account, including monthly maintenance fees and overdraft charges before deciding which bank meets your needs the best. Some banks charge minimal fees while others have a wide variety of charges; it’s up to you to see which will work best for you.
- Customer service: The last thing that any business owner wants is to call his or her bank multiple times each day or deal with complicated automated phone menus just to access his or her own money. Look for banks that offer excellent customer service and are ready at all times to help their customers.
- The number of free checks: It’s easy to find banks that charge fees for every check they print — some even charge fees for using the ATM. A bank with a high number of free checks can save you loads on those fees, and it’s much easier to keep track of your money if you don’t have to worry about paying for each check or ATM withdrawal.
- ATM transactions: You may not use this service yourself, but your employees or customers probably will so be sure there are plenty of ATMs nearby.