Small Business Savings Account: What to Consider When Setting One Up

You may have decided to start a small business. However, you may have been using your personal savings account to finance your business’s day-to-day operations and other expenses. small-business-savingsWhile it might be initially convenient to you, you may, at times, feel the brunt of using your personal savings account to fund your business during tough times. To prevent running your balance down too low, you should open a business savings account and use it for all your business needs. But as it may be your first time to hear about a business savings account, here are some things to consider when setting one up:

  1. You might have to open more than one business savings account.

You may have initially thought opening a single business savings account would be enough. Especially as your business isn’t that big yet. However, you may have a difficult time managing your sole business savings account. Because of this you might want to open one business savings account for your business taxes, and open another one for your payroll. But if money moves in and out of your business a lot, you might have to open more than two separate business savings accounts.

  1. Opening a business savings account in a bank other than the one you’re using right now.

It’s entirely up to you if you want to stick to the bank that’s currently holding your personal savings account. However, you shouldn’t discount choosing another bank though, especially if there’s one around you offering their leading savings account that especially caters to business owners like you. Always double check with any business saving account details to make sure it will do all you need it to when you’re running your business.

  1. You’ll have to meet the requirements that any bank asks of you.

When opening a personal savings account, you’ll have to first finish all the paperwork asked of you by the bank. The bank will likely require you to provide the following:

  • Tax identification number
  • Social security number
  • Business license containing both your name and that of your business

In the United Kingdom alone, only 31 percent of businesses there have a savings account as of 2014 which only goes to show that some business owners still find it unimportant to open a separate business savings account. Unfortunately, their folly can cost them a lot when it’s time for the tax collector to inform them about their business tax or when their business suddenly starts losing income. You wouldn’t want to end up like any of those 69 percent of business owners in the U.K. Thus, you should start opening a business savings account, and the above-listed tips on what to consider when setting one might help you get started.

About Amelia Smith

Amelia Smith believes that the key to understanding something isn't always about how good the explanation is, but how engaged you are with the learning process. As such an integral aspect of her pieces for sites such as Gobear.com is to ensure that insurance and banking concerns of her readers aren't tackled just in a technical sense, but also in a way that they can relate to their lives.