Small businesses are insignificant when you consider their collective impact on the U.S. economy.
According to the U.S. Chamber of Commerce, more than 33 million small businesses operate in the United States, and together they represent 99.9% of all U.S. businesses. Small businesses are thought to have created nearly two-thirds of the country's new jobs in the past eight years or so.
See also: 10 tips for starting a business with little money from entrepreneurs
More: 3 things to do when your savings reach $50,000
The U.S. Small Business Association points out that “as soon as your business begins accepting and spending money, you should open a business bank account.” The most common business bank accounts are similar to those found in personal bank accounts. The main difference is that most business bank accounts offer benefits that standard personal bank accounts don't. These include:
-
Protects against personal liability by keeping business funds separate from personal funds.
-
They are not paid directly to you, but to your business.
-
The ability to empower employees to handle day-to-day banking tasks on behalf of your business.
-
A bank line of credit for your business that you can use as needed, such as when you need to purchase new equipment or cover other unexpected expenses.
The process of opening a business bank account is very simple. In most cases, you can open one online, but you can also visit a branch if you prefer to do it in person.
While not all small businesses need the same bank accounts, there are four things every small business should have: a checking account, a savings account, a credit card account, and a sales account. Let's take a look at why each is important.
sponsor: Do you owe the IRS more than $10,000? Schedule a free consultation to see if you qualify for tax relief.
checking account
One of the main benefits of setting up a business checking account is that it allows you to separate your business finances from your personal finances. This is the account you use to conduct everyday transactions such as purchases, invoices, and deposits.
Check it out: 8 things frugal people never do at the beginning of a new year
savings account
A business savings account is useful if you have leftover earnings that you don't need to use right away. Savings accounts offer higher APYs, but they also come with more limits. Some banks limit you to six fee-free withdrawals per month. Additionally, most business savings accounts don't allow you to write checks or withdraw cash directly using your ATM card.
Many banks also limit the number of times you can deposit money into your business savings account each month, including cash deposits. Savings accounts are a must for small businesses, but you can also keep your money in business CDs or money market accounts.
Seller account
Merchant bank accounts allow businesses to accept and process electronic card transactions, making these accounts mandatory if you sell products directly to consumers. In fact, any business that accepts credit cards or other forms of electronic payment from consumers for products or services must have a merchant account.
These accounts create an agreement between a business, a bank, and a credit processor about how the business will receive money after a transaction is processed. Merchant account providers require monthly or annual payments for the use of their services and bill businesses on a per-transaction basis.
business credit card
Small businesses should also open business credit card accounts to offer more payment options. Business credit cards are also important because they separate work and personal spending. A business credit card allows you to monitor your spending, streamline record-keeping, and free up more time to grow your business. Additionally, many business credit cards come with perks like reward points and airline miles.
GOBankingRates Details
This article originally appeared on GOBankingRates.com: 4 Types of Bank Accounts Every Small Business Should Have
