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Do you need a business checking account for your startup? It depends.

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When setting up your startup, choosing the right bank and business checking account can be challenging, especially if you have limited business experience. You need a bank account that not only meets your current needs, but also grows as your needs evolve with your growing business.

You may be wondering if you need a business checking account. While a personal checking account may meet your needs for your basic day-to-day activities, consider whether you need a business loan in the future or want to keep profits in a savings account.

Your new checking account can be the start of your banking relationship, helping you build goodwill and trust. While the bank is important, the features of the current account are also vital. So here we will explore how to choose a business checking account for your startup.

Think about what you need from your bank

The first thing to consider is what you need from your bank. Are you just looking for a checking account or do you also need a small business loan? There are many banks that not only offer a variety of business checking accounts, but also have great business product lines such as business loans and lines of credit, business credit cards, and tax advice.

While you may be looking for a checking account to clear your checks and manage customer payments, you may need a line of credit or other products in the near future. So take a moment to think about your immediate and possible future needs to see which banks can meet your requirements.

Once you have a short list of things you need from your bank, you can start comparing what different banks offer, both in your area and nationally. If you are considering multiple banks, you can speak to their customer support team and obtain product information or even schedule a meeting to discuss your requirements.

However, if your startup only needs basic account services, consider online banks. These tend to offer different products with minimal costs. The downside to this is that you don’t have face-to-face interaction, and depositing cash can be a pain.

Related: 5 signs it’s time to switch corporate banks

Considerations when choosing a business checking account

1. Location Restrictions

Even if you’re not looking at an online bank, some traditional banks impose location restrictions on certain accounts. If you’re considering a business checking account with very low fees, it’s worth checking that it’s online only.

Depending on your activities, you may need to speak to a bank representative in person, pay cash, or send certified checks. In these scenarios, having a business checking account without branch access can be a problem.

2. Digital Tools

Most modern startups take advantage of digital tools such as mobile deposits and digital bill payments. So it is worth assessing which digital tools are offered with the current account.

Many banks and financial institutions have an app that allows you to manage your account on your mobile device. Be sure to check the reviews of the companion app to see if there are any potential issues.

3. Cost

Just like with a personal checking account, the costs for your business checking account can add up quickly. For most startups and small businesses, every penny counts, so it’s critical to check the fee structure for your new checking account before signing up. If your bank offers a monthly maintenance fee waiver, check the criteria to make sure you can meet the minimum balance required to waive it.

4. Relationship Benefits

Many banks offer some great benefits, such as fee waiver and preferential rates if you link multiple accounts. So it’s worth checking whether the bank that holds your personal current account offers relationship benefits if you open a business account.

Your existing bank may offer some excellent account options and since you already know and enjoy the bank, you can feel confident using your new business checking account. On the other hand, if there are no benefits to having the same bank for your personal and business accounts, don’t feel obligated to stick with them.

Related: 5 must have items to open a business bank account

5. Extra debit cards

If you own a startup, you have plenty of administrative tasks to keep you busy every day. So it can be very useful if you can give your trusted team members a company debit card.

This means you don’t have to micromanage essential purchases or deal with cumbersome refund requests.

6. Business Savings Accounts

Another important consideration is whether the business checking account has an associated or compatible savings account. While some business checking accounts are interest-bearing, you may still have start-up capital that would be better placed in a savings account.

With a compatible savings account, you can keep your money close at hand for when you need it. Some banks even allow automatic transfers. This transfers money from your savings account when the balance on the checking account reaches a certain threshold. This is a great feature because you don’t have to worry about overdrafts or declined payments, while still being able to earn a higher interest rate.

7. Additional Resources

Finally, it’s worth checking whether your new business checking account gives you access to additional resources. Many banks appreciate the challenges of running a startup and offer help and guidance. This could be something as simple as a learning center that offers live webinars, informational guides, or access to a corporate bank manager.

8. Business vs Personal checking account

There are several good reasons to keep a separate checking account for your business if you own one. According to the SBA, corporate banking provides some personal liability protection by keeping your personal and business funds separate. Check writing and debit cards are features that both personal and business checking accounts can offer.

However, a business checking account can offer benefits that a personal checking account does not. While some personal checking accounts can be opened for just $1Depending on the bank or credit union, a business checking account can cost $500, $1,000 or more to open. Combining your personal and commercial activities into one checking account, if you plan to do both, can make bookkeeping difficult and make tax season a nightmare.

It boils down

Once you’ve started your startup, you’ll probably be excited to work on your core business, but the right checking account can be an ally or a hindrance. The right checking account gives you the tools and services your startup needs.

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