Which are the Best Types of Bank Accounts for Businesses?
Every business needs a bank account. However, the right type of bank account for businesses is what is sometimes confusing. ReviewsBird.com is loaded with different opinions from people. Some fundamental necessities call for the need for a type of bank account. People want to know bank accounts reviews.
They ask if there is a difference between the account controlled by a sole entrepreneur or a licensed company or organization. The basic thing to consider is the categories of available bank accounts.
The Basic Categories of Bank Accounts
- Personal Bank Account: this is the first category of accounts almost everyone creates. It’s solely to deposit personal savings. This isn’t to be mixed with any other category of bank accounts. It is private and affordable for operation with the least charges. This is why a business account is advisable for entrepreneurs. Funds from the business and funds for personal savings and upkeep are different.
- Business Account: this is used for the day-to-day business transactions. These accounts are not created to accumulate interest. Funds are generated and spent daily. Thus, entrepreneurs and organisations do not create these accounts for savings purposes, rather for the round the clock business transactions.
- Internet Bank: this category of a bank doesn’t always have a physical branch. Although they’re registered and recognized, the entire activity of the internet bank is digital. While it is open for individuals and businesses, choosing it is based on their benefits, services, and its accessibility.
Which Business Account Can You Create?
Businesses are often advised to have an account for their round the clock income and expenses, savings account specifically set for paying taxes, and a credit card. These are the types of accounts you can create for your business.
- Foreign Currency Accounts: These accounts are best for importers and exporters who make transactions in another currency. While you earn and withdraw, there is also a minimum balance that must remain in the account. This is because you can’t suddenly blow your account; it isn’t for domestic transaction purposes.
- Interest-bearing Checking Accounts: Business checking accounts are great, but there is no accumulation of interest based on your deposits. Interest-bearing accounts reverse this. There are unlimited withdrawals and transfer of funds but your money will continue to yield reasonable interests over time.
- Business Checking Accounts: These are more open than savings accounts. You can add funds and withdraw anytime. You have frequent access to your account although some banks have a withdrawal limit. However, this account is free with enormous benefiting options for businesses.
- Savings Accounts: Savings accounts keep your funds and the interest earned. However, the transfer of funds must be kept to the barest minimum as withdrawals come with high bank charges. This bank is largely to accumulate interest with the capital there.
- Certificates of Deposits: There are vital advantages attached to using this account. First, there are higher returns on your savings. Then second, you can withdraw most of your money when it matures. The only turn off is that it is only a bank to save your business earnings. You can’t withdraw until the money matures. However, the interest is more than the interest savings accounts yield.
These accounts are beneficial for businesses, both large and small ones. There are also other types of account, but the above are the basic types business owners can create for their businesses.