
Does Your Business Need a Savings Account Too?
Although not nearly as ubiquitous as business checking, business savings accounts are becoming more and more popular among forward-thinking entrepreneurs.
To keep your business banking activity separate from your non-business transactions, it is a good idea to set up a bank account in your company’s name. Whether your business and personal accounts are at the same bank or different institutions, you’ll likely be able to link them.
This makes it easier to move money where you need it, especially if you have to tap into your personal reserves to cover emergency business expenses. According to the 2021 Federal Reserve Small Business Credit Survey, 62% of owners used money from their personal accounts to address their businesses’ economic challenges.
If your company was formed as a corporation or a limited liability company (LLC), you are legally required to use a bank account for your business transactions. Yet if you operate as a sole proprietorship, you are allowed to use your personal account for business purposes — though it may not be in your best interest.
There are multiple advantages to having both a business and a personal bank account. Separating your finances with two distinct accounts allows you to:
Having joined accounts simplifies money transfers from one account to another or one bank to another.
Without a link, you may be required to write a check, visit a branch, or pay a fee. With a link, you can transfer funds electronically and access them immediately.
The easiest way to link business and personal accounts is to open them within the same bank or credit union. Ask your account holder to connect them, and then when you log on, you’ll have the option to transfer money where you need it and when you need it. Money transfers among your business and personal accounts are usually free and instantaneous.
It’s also possible to connect your business account to your personal account if held at different banks. Linking externally is usually also free, and transfers can be done electronically; however, the funds, in this case, may not be immediately available.
Your bank is likely to request the following information to establish a link to your external account:
Besides faster and easier transfers, linking your accounts could garner additional benefits for you and your company.
Your bank will want you to have as much money as possible invested with them rather than having it spread across multiple institutions. Banks may offer higher interest rates for linked accounts as an incentive for customers to open multiple accounts and deposit more money.
This higher yield will typically apply to your savings account, though checking accounts may sometimes earn interest.
While not always the case, some banks may combine more than one linked account under a single login. With an integrated login, you’ll be able to view statements and transaction histories for both accounts using a single username and password.
Once you link your personal and business bank accounts, you can easily and quickly transfer funds from one to the other. If needed, money from your personal account can be made available to prevent your business account from sliding into the negative — helping you avoid bounce fees or late charges.
The Revenued Business Card links to your business bank account and provides you access to capital you can use for any corporate expense. Your merchant portal empowers you to monitor your payback schedule, transaction history, and request cash a draw as needed.
Call us at +1 (877) 662-3489 or fill out our online contact form to learn more.
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Although not nearly as ubiquitous as business checking, business savings accounts are becoming more and more popular among forward-thinking entrepreneurs.
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