Why do you need a business checking account?
Using a business checking account is a smart move for many reasons. Here are some of the perks of using this type of account:
- Easy access: You can access your business checking account from anywhere in the world via the Internet or telephone banking.
- Convenience: A checking account makes it easy to pay bills, process payroll, and make deposits or withdrawals. You can also use the money in your account to purchase checks and other supplies at most office supply stores.
- Security: Your business is more secure when you have a separate checking account designated only for business transactions. This way, if your personal checking account is compromised by identity thieves, your business funds stay safe. The same goes for debit cards—using a separate card designed specifically for business purchases makes it more difficult for criminals to steal from your company’s money.
- Interest income: By keeping some money in your business checking account at all times, you can earn interest on those funds instead of paying fees and charges by leaving them in a standard savings or money market account.
- Reward programs: Many banks offer rewards programs for loyal customers who bank with them for a long time. Having a business checking account allows them to keep track of your relationship better than a personal one does, giving you access to those rewards.
- Free online bill pay: This feature is a real time-saver for busy entrepreneurs who don’t want to waste their time going to a bank branch just to make an electronic payment. There’s also no need to run out of checks at inconvenient times; simply use your computer or your mobile device to check off the payments you’ve made that day and print off new ones if necessary.
What do you need to open a business checking account in Pennsylvania?
The following documents are generally needed to open a business checking account:
- Copies of your driver’s license, passport, or other government-issued photo identification
- Copies of your social security card(s) for each authorized person
- Copies of your business registration or articles of incorporation
- Proof of address – a recent utility bill or cell phone bill is typically sufficient to establish proof of address for businesses in our area.
- Your Business License (if applicable)
- Your DBA Filing (if applicable)
- Individual Tax ID Number for each Owner
Common business checking account fees in Pennsylvania
Trying to find the right type of business checking account can be tricky. Business checking accounts tend to vary widely in their features and fees. The following is a list of common business checking account fees:
- Minimum balance fee: This is the lowest balance you need to keep in your business checking account for it to be considered “active”. Some banks will charge fees if your balance falls below this minimum. Be sure to check on this before deciding on a bank and a product.
- Monthly service fee: The most common fee is a monthly service charge that covers the cost of maintenance, customer support, and other services. Monthly service fees are often waived if you maintain a certain balance or meet other requirements. Some banks waive this fee for the first month, then start charging after 30 days.
- Teller fees: If you bank with a smaller institution and want to use your debit card at a physical location, you might have to pay a fee for the privilege. The same goes for using an ATM that isn’t associated with your bank. Some banks even charge for using their own ATMs, so make sure you know where your money is going before you withdraw it!
- Overdraft fees: Many banks offer overdraft protection on business checking accounts, which means they’ll cover your small ATM withdrawals and other payments if you don’t have enough money in the account — but you’ll have to pay up if the bank ends up paying more than the amount of the withdrawal or transaction.
- Paper statements: Banks used to automatically ship printed statements to business customers every month, but these days many only provide electronic statements by default. If you need printed statements, you will pay a small fee.
How to choose the best business checking account in Pennsylvania
Deciding on a business checking account is a very important decision. Most businesses only have one chance to get it right, and the wrong choice could end up costing you more than you expect. Here are some important things to consider:
- Costs: What does your business need from its bank account, and how much will you have to pay for those services? Some banks charge a lot for things like out-of-network ATM withdrawals, check printing, and monthly maintenance fees. Others offer free products and services that save you money in the long run.
- Account minimums: A bank might advertise no minimum balance requirement, but will it still be willing to do business with your small company if you only have $1,000 or less? You don’t want to be turned away because you’re not big enough yet; look for an institution that will accept your deposits without forcing you to keep thousands of dollars in your account all the time.
- Availability: Availability generally refers to access to funds. Some businesses need immediate access to funds in their checking accounts, particularly those with employees who get paid every two weeks or biweekly. Others might not mind waiting a day or two for transactions to clear so they have time to balance their books at the end of each month.
- Check out the bank’s history: Find out how long the bank has been in operation and whether or not it has ever been involved in an acquisition or merger that could affect your deposits or customer service experience.
- Look for convenience: Look for banks that offer one-stop shopping — where you can conduct all of your financial business under one roof (e.g., personal and small business banking). Some banks offer free access to extended evening and weekend hours, which is a plus if you have questions about your account activity or need to make deposits after normal working hours.