Why do you need a business checking account?
Business checking accounts offer many benefits to business owners. These include:
- Tax: Business checking accounts allow you to separate business and personal expenses. Its advantages include personal liability protection and fewer headaches during tax time.
- Availability: As online business checking accounts can be accessed online, most transactions can be carried out online as well, even if you are away from your office.
- Convenience: It can give you access to many different services and facilities that will help you run your business smoothly, without any hassles or inconveniences.
- Saves time: Businesses save time by using one account to deposit both cash and checks. Also, having all company paychecks go directly into the company bank account saves time when paying employees and vendors.
- Cash management tools: Businesses have a lot of expenses, and they need ways to oversee these expenses and keep track of receipts and other documents related to spending. Business checking accounts often come with cash management tools that help businesses do this. These tools allow businesses to view statements online, so they can keep track of where their money is going and make adjustments if necessary.
What do you need to open a business checking account in Tennessee?
The following is usually required when you try to open a business checking account:
- Business tax ID number (either your EIN or your SSN)
- Business owner identification (if required)
- Business identification. You’ll need to provide a certified copy of your business license or articles of incorporation (the document that officially establishes your company).
- Personal identification. You’ll need two forms of personal identification, such as a driver’s license, passport, or Social Security card, as well as a copy of either your tax return from the previous year.
- DBA certificate, if applicable
Common business checking account fees in Tennessee
Here are some common business checking account fees:
- Account maintenance fees: Some banks charge a small monthly fee to maintain your account. These fees vary based on the size of the bank and what services it offers. For example, some banks offer unlimited check writing and reimbursements for out-of-network ATM fees.
- Overdraft fee: If you attempt to spend more money than you have in your account, your transaction will be declined. However, this doesn’t mean your bank won’t allow you to spend more than your account has available — they might just charge you an overdraft fee instead.
- Minimum balance fee: You may have to keep between $500 and $1,000 in your checking account each month to avoid a monthly or per-check fee. Some banks waive this if you maintain an average monthly balance of $5,000 or more.
- Check processing fee: Some banks charge this fee per check when paying from your account. In other words, it’s based on the number of checks you write. Most banks offer paperless options for processing checks without paying this fee.
- Non-sufficient funds (NSF) charge: Some banks charge a fee for transactions that overdraw your account. In general, this is a small fee — usually $25 or less — but it can add up over time if you’re not careful about monitoring your balance.
How to choose the best business checking account in Tennessee
Deciding on the best checking account depends on several factors, including how you want to access your money. If you want to get the most value out of your checking account, consider these tips:
- Location of bank branches: Some banks have more branches than others, so if you need quick access to your cash or a deposit, you might want to choose a bank with a few more locations nearby. However, digital banks also have access to ATMs, so it’s best also to consider online banking institutions.
- Fees: The cost of maintaining your checking account will usually depend on the balance value held within it. However, some banks charge per transaction fees as well as fees for overdrafts or bounced checks. Be sure to check all the fees associated with the account.
- Features: Most business checking accounts come with some standard features: a checkbook, a debit card (for ATM use), and online banking. Look for one that fits your needs and offers any additional features that suit your business’s specific needs. For example, if you have employees who often travel to other states, check if there is free nationwide ATM access included in your business checking account.
- Ease of Use: You want to ensure that the online banking services offered by the bank are user-friendly, easy to navigate through, and have an integrated mobile app for convenience. You don’t want to struggle with your online banking service or be annoyed because you can’t easily access it from your mobile device.