How to open business checking accounts and what to look for in them?

When a person starts a business, it is imperative that he also opens up a business checking account. This should help him keep his cash securely, withdraw cash when required and also make business payments. But he should be aware of the things to be done while opening such an account, and also the factors one must look for while opening such an account.

Steps Involved 

First the business that you have started should be registered with the appropriate authority or the business owner should obtain a trade license. Either of these two documents would be required at the time of opening a business checking account.

Next, you need to keep ready with you the initial account opening amount. Most banks would insist on an account opening check, but some banks also accept cash if you do not have any account in any other bank from which you can issue the check. You will also be asked for identity proof and address proof. The identity proof of the company would be required if it is a partnership or limited company, whereas if it is a proprietorship company then the identity proof of the proprietor would suffice. The address proof of the registered address of the company is needed, and some banks additionally ask for the address proof of proprietor, partners or directors in their personal capacities.

Once you visit the bank with all the above documents and money, along with a couple of photographs, the bank officials will make you fill out a form giving all the mandatory details. After submission of the account opening form along with all necessary documents, you will be ready to start using the business checking account.

Features to Look for 

Although the process of opening a business checking account is fairly simple, as described in the steps above, yet there are a number of features and charges that should be compared between various business checking accounts before you select one for yourself. 

  1. Minimum Balance – Most business checking accounts define a particular minimum balance that is to be kept in the account. You, of course, have the option of not keeping that balance, but for that you need to pay a certain charge every quarter.
  2. Transaction Limit – Every business checking account has a certain number of free transactions allowed every month according to the balance maintained. Compare the free transactions offered by various banks against the same minimum balance.
  3. Charges & Fees – Compare the charges of certain transactions, and also the penalty charges for unexpected occurrences.
  4. Product Features – Finally, as the size of your business increases, you might require additional specialized services. Do find out if your bank offers the full product suite which you need.

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