Your Business Needs its own Bank Account
Creating a business bank account is an important step for every startup, even if you are a sole proprietorship. Just tattoo this in your mind:
Don't Mix Business Money with Personal Money!
You are not operating as Joe Mama. You are representing a business entity. You are now Joe Mama, CEO (or whatever title you gave yourself). Deposit your sales/service money into your business account. Pay for expenses out of your business account. This not only makes your accounting easier come tax time, but it shows the IRS that you mean business and should be taken seriously. This is not a hobby for you (even if it is a side hustle).
Free No Fee Checking Accounts
Some banks will claim to offer free ‘no-fee’ checking accounts for your business, but if you read the fine print you will see that it is really a waived fee for meeting a minimum balance requirement; which is not unreasonable, but if you are just starting out you may not want to stress about keeping a $2,000 minimum daily balance to avoid charges.
Credit Unions are a good option to find no-fee business checking accounts. One issue with Credit Unions though is that they are usually local, not national, so there are not many branches, especially when traveling.
Online Business Checking to the Rescue
I have found an online business checking account from Relay Financial. I signed up for my account online in minutes. U.S. corporations, LLCs, general partnerships and sole proprietors can all create an account. You will need to submit a digital copy of your business registration document that applies to your entity type, such as article of incorporation or articles of organization. You will also need to submit your EIN number and your drivers license.
- Debit Cards – that’s right, multiple debit cards. In fact, you can create up to 50 physical or virtual debit cards and assign daily spending limits to them.
- Direct Deposit & ACH Bank Transfers
- Check Deposit via Mobile App
- Up to 20 checking accounts – organize your money as you see fit. I recommend an account for taxes.
- Plus more….
$50 for you and $50 for me
when you sign up with this referral link
Disclaimer: As with any advice, consult with an accountant and/or lawyer to make sure you are doing what is best for your situation.
Meir is a web developer who has been writing code since 2000. He enjoys his family, movies, cooking, golf, and bowling.