One of the most challenging parts of being a business owner is handling the finances.
The rules that apply to personal banking often don't apply to business banking in the same way. It can be confusing — plus, it’s not like you have time to do the necessary research when you’re already busy running an entire business. To make things easier on those that need these answers most, we put together a business savings FAQ.
Find answers to the most commonly asked questions about business savings accounts below.
Do I need a business savings account?
That depends — do you have a business? If you do, big or small, you’ll benefit from having a business savings account. There is no legal requirement for business owners to have one, but they do make organizing and managing funds a lot easier for many.
Business savings allow you to avoid the complication of having to take out a loan in case of emergencies. The benefit of having a supportive financial foundation to grow your business upon is undeniable.
When should I open a savings account for my business?
You should open a savings account for your business when you’re ready to. Typically, it’s when you’ve outgrown the use of only your business checking account.
Are you frequently finding yourself wishing you had a better way of organizing your funds in order to avoid trouble at tax time or other financial complications? Then it’s time to open a business savings account.
What are the benefits of a business savings account?
Business savings accounts come with a number of specific benefits, including:
- Increasing the longevity of your business. By having a financial plan that includes the use of a business savings account, you help ensure your business can weather any unexpected storms by having the necessary funds set aside to pay for them.
- Making it easier to be prepared for tax season. It's easy to forget how important it is to set aside money for taxes when you're already so busy handling every other aspect of your business. Business savings accounts make it easier to avoid accidentally spending money meant for that purpose.
- Helping you increase your net worth. Many business accounts — including Signature, Core, Community and Growth business savings accounts from Sunrise Banks — offer interest rates that help passively grow your savings.
- Your money is protected by the FDIC. The Federal Deposit Insurance Corporation (FDIC) Off Site Link offers inherent protections to savings accounts. Your business savings are protected up to up to $250,000, separately from personal accounts of the business owner or associates.
How many business banking accounts should I have?
There is no federally required number of savings accounts to have for your business based on its size. How many you have will depend on your unique financial needs, goals, and plans.
The benefit of multiple business savings accounts is that they allow you to segment your money with more depth. Being able to track every dollar makes it easier for business owners to prove creditworthiness and avoid fraud risks. On the flip side, having more accounts means managing more accounts.
If you're interested in opening your own business savings account, get in touch with the team at Sunrise Banks. We have a number of options available that include unlimited withdrawals, free eStatements and more