How to Choose a Business Checking Account

Every successful business needs somewhere to put its money.

In order to run a successful business, you’re going to need money.
In order to use that money, you’re going to need somewhere to put it.

The U.S. Small Business Administration recommends opening a business checking account as soon as your business receives its very own EIN (employee identification number) from the IRS. Having an account operating as soon as possible means you're building credibility as a business owner as soon as possible. This can lead to better odds when applying for loans or seeking investors later on.

If you’re interested in starting your own business and want to make sure you’re taking the right steps to protect yourself financially during that process, you’re in the right place. We’ll be detailing how to choose a business checking account and other related questions below.

How do I choose a business checking account?

You’ll want to choose a business checking account based on the unique needs of your business. Things to take into consideration when choosing include account features, interest rates for deposit accounts, service fees, branch and ATM access, transaction limits, and any introductory bonus offers that may be of interest.

When it comes to account features, we recommend thinking about the way you want to use your business checking account first. Once you have a plan for how and when money will be moved to and from that account, you'll be better able to determine what you need to make that happen. Common sought-out features include check-writing services, mobile or online banking access, wire transfer services, access to debit or credit cards, loan services and safe deposit box availability.

When looking at more specific things like fees, rates, and limits, you’ll want to look at the website of your preferred banking institution to see what they offer. For example, information about the different types of business checking accounts offered by Sunrise Banks is only a click away.

Can I use a regular checking account for my small business?

Yes and no — your decision will depend on the type of business you own. If you're a sole proprietor, you're legally able to operate using nothing but a personal bank account. That said, this is not recommended practice for a number of reasons:

  • Tax liability. It’s a lot harder to keep track of the business taxes you owe if all your business transactions are mixed in with your personal ones.
  • You receive checks made out to your business instead of you individually. If you’re depositing checks made out to a business into an account with your name on it, you’re at risk of creating suspicion from the IRS for fraud. The minor convenience isn’t worth the major risk.
  • It makes you appear less credible to potential investors. Most businesses have goals for growth. In many cases, growth is funded by investors. Having a business account and business credit set up before speaking to potential investors offers a credibility advantage.

If you operate your business as a limited liability company (LLC), you are legally required to separate personal and business finances. The protection you receive from registering as an LLC is at risk if you don't follow this guideline.

How many business checking accounts should I have?

You can have as many business checking accounts as you’d like as long as the applications are approved. There are no national laws prohibiting small business owners from having more than one account. Many find using multiple accounts preferable because it makes it easier to organize different incomes and expenses. Examples include:

  • A main checking account for everyday operations, deposits and withdrawals
  • An account dedicated specifically to payroll expenses
  • A variable “rainy day” fund that you grow at your own pace

Interested in applying for a business checking account?

It’s easy to apply for a business checking account with Sunrise Banks. All you have to do is use our easy online portal to access the application. Off Site Link We look forward to connecting with you about how our services can help grow your business — and its money — with confidence.