How you bank as a business owner affects all of your business finances — it’s imperative to avoid costly business overdraft fees, important to choose the right banking partner, and crucial to save as a business owner. Our Business Banking content will guide you on your path to a great banking relationship.
The decision to bank with a given institution could invariably lead to banking issues, and those could muck up the course of your business. So let’s take the topic of overdraft fees head-on, starting with a better glimpse at exactly what they are and how they affect you.
Overdraft protection is a line of credit that banks offer to businesses to cover overdrafts. Overdraft protection kicks in when the business writes a check or completes a transaction for more than the amount in their account.
Many people don’t want to endure the embarrassment of a declined transaction due to insufficient funds in their bank account. Banks realized this, and they've developed a fee structure to help customers and businesses avoid that situation.
Business checking accounts tend to come with more limits and fees than personal checking accounts, so getting the right account for your needs is important.
One particular question that many new business owners encounter is the role that a federal Employer Identification Number (EIN) plays in your business checking account. Is this really a necessary step to create a business bank account, and if so, how do you get an EIN?