Personal Vs. Small Business Checking Account: Know The Differences

Personal checking accounts and corporate checking accounts may appear to be rather similar at first glance. Both let you draft checks, make deposits and withdrawals, as well as debit card purchases and cash withdrawals. Both also often provide internet banking and overdraft protection. However, small business checking accounts offer advantages in keeping your accounts separate for easy accounting and tax filing. Here are a few key differences between a small business checking account and a personal account.

Setting Up Employee Debit Cards and Virtual Cards

You may order employee debit cards for some corporate checking accounts, allowing employees to use the company’s checking account to make purchases and withdraw cash. You may also establish spending caps and ATM withdrawal caps for staff cards as the principal debit card owner.

Another useful feature of many business accounts is the ability to distribute virtual cards. This is especially helpful for ecommerce expenses, such as PPC marketing spend or expenses for your ecommerce tools.

Monthly Fees and Balance Requirements

In comparison to personal checking accounts, most corporate checking accounts often feature higher fees and stricter account balance requirements. For example, a business checking account might require $500, $1,000, or more to open, while some personal checking accounts can be opened with as little as $1. (Viably’s business account has no minimum balance.)

Checking account maintenance fees can be $6 to $15 per month. This is a fee that is charged just for opening the account , regardless of how much money is in it. Corporate checking accounts usually have higher balance requirements than personal ones, but you can avoid monthly fees if you keep a higher balance in your account. Make sure you understand the fees associated with your business account. (There are no fees—including minimum balance and maintenance fees—for a Viably checking account.)

Business checking accounts are typically designed for businesses that have more diverse banking needs. For example, a business might need to make a lot of deposits or send regular money orders. A personal checking account just isn’t going to be able to handle those kinds of transactions.

Different Complexities in Opening an Account

Opening a business account typically entails a little more paperwork with details on your business finances, licenses, and regulatory information.

When opening a checking account for your business, you will need to provide different identification documents than you would for a personal checking account. Corporations are subject to more complex rules and regulations than individuals, so the bank will need to be sure that you are authorized to open an account on behalf of the company.

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In addition, the process of opening a business bank account is not as simple as opening a personal checking account. There are specific eligibility requirements that you will need to meet, and the bank will scrutinize your company’s finances to make sure that it is legitimate and solvent.

If you are starting a small business, it is important to understand the differences between personal and corporate checking accounts. By knowing what to expect, you can avoid any surprises and ensure that your business is off to a good financial start. And, most importantly, a few extra steps to open an account will be worth it for the advantages for your business.

Apply for a Small Business Checking Account Today

A lot of company owners frequently avoid opening a business account because they are worried about maintenance costs and setup. But there’s no reason to hesitate if you research the right fit and understand the benefits of a business account. Apply for a small business bank account with Viably today for all your small business banking needs today.

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