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7 Things To Consider When Choosing An LLC Business Bank Account

Written by Marc Guberti

Marc Guberti is a Certified Personal Finance Counselor who has been a finance freelance writer
for five years. He has covered personal finance, investing, banking, credit cards, business
financing, and other topics.
Marc’s work has appeared in US News & World Report, USA Today, Investor Place, and other
publications. He graduated from Fordham University with a finance degree and resides in
Scarsdale, New York.
When he’s not writing, Marc enjoys spending time with the family and watching movies with
them (mostly from the 1930s and 40s). Marc is an avid runner who aims to run over 100
marathons in his lifetime.

Updated October 19, 2023​

4 min. read​

Starting a business is exciting. You get to serve the community, provide employment opportunities, and generate revenue. But once you make money from a customer, where does that cash go? Naturally, it goes into a bank account, but you might want to consider creating an LLC business bank account instead of sticking with your personal account. Limited liability company business checking accounts are a bit more complicated than personal bank accounts, but once you master the initial learning curve, it gets easier to understand. This article will explore key factors to consider when reviewing business bank account options for your LLC.

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Should You Use a Personal Bank Account for an LLC?

Most people open personal bank accounts for their finances. These accounts give consumers an easy way to store their money. If something happens with the bank, the FDIC steps in as long as the bank is FDIC-insured. This policy protects the first $250,000 in your bank account in case the bank becomes insolvent, an increasingly unlikely scenario.

But even though many people are comfortable with personal bank accounts, it’s worth learning how LLC accounts work and using a separate bank account instead. While a personal bank account can work, things can get messy if you don’t separate business finances from personal finances. This is one of the main reasons most business owners use an LLC business bank account instead of turning their personal accounts into one-stop shops for every financial transaction.

Reasons to Get a Business Bank Account for your LLC

Separating your business finances from personal finances is a big deal that can save you a lot of money and hardships in case something goes wrong. An LLC business bank account provides legal protection if someone sues your company. When you separate your finances, only the LLC’s finances are at risk. If you bought real estate on the side for your personal investment strategy, you wouldn’t have to worry about those assets getting seized if the legal proceedings don’t go your way. However, if you didn’t separate your business finances from your personal finances, everything is fair game.

An LLC also makes tax season less complicated since you’ve built a chasm between your personal and business finances. You can review business expenses and revenue in your LLC and check personal details in your other account. LLC bank accounts also tell lenders that you take your company seriously, and they can help you build business credit. You can get some business loans with good personal credit, but business credit opens up more opportunities and is the better path for long-term financing and success.

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Things to Consider When Choosing A Business Bank Account for an LLC

Thinking about opening an LLC business bank account? Many financial institutions and fintech companies have great solutions, but it’s important to pick the right LLC bank account for your needs. Here are some details to keep in mind when searching for your LLC account.

1. Requirements

Financial institutions will request basic information like your name, Business Employer Identification Number (EIN), Social Security Number (SSN), and other documents. Once you assemble the necessary paperwork, keep it organized so you can refer back to these documents at any time. Some banks will request an opening deposit to get started. You won’t have to provide your credit score or revenue projections to create an LLC business bank account. Banks just want to verify the LLC exists and that you are one of its members.

2. Fees and Other Costs

Some banks have monthly fees and charge you for each transaction. Read the fine print to see how these fees can add up before committing to a bank or fintech company. Then, as you shop around, you will get a better understanding of which fees and costs are parred for the course and which ones are excessive.

3. Access (Physical/Online Bank)

If you put money in a bank, you should feel confident about your ability to take out cash when you need it. Consumers are more used to withdrawing money from their physical banks. They can visit local branches or ATMs to get funds. Online banks do not have physical branches. While this can seem like a disadvantage, less overhead allows these banks to provide better rewards for their members, such as savings accounts with respectable APYs. Although you cannot visit a local branch, you can withdraw funds using an ATM if you do online banking.

This accessibility is one part of the equation. You won’t incur fees at a physical branch, but some ATMs charge fees for deposits and withdrawals. It depends on whether the ATM is a part of the bank’s network or not. If it’s an in-network ATM, Banks with more coverage help their clients save on fees and get the money they need. When comparing banks, check to see how many ATMs are part of their networks, especially if you use ATMs often or opt for a virtual bank. Most banking mobile apps show the locations of their ATMs so you can find in-network solutions that are nearby.

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4. Ease of Transactions

You shouldn’t have to jump through several hoops to make transactions. For example, it should be easy to use your business bank account to exchange cash. However, some banks also impose limits on how many transactions you can do each day. If you exceed this limit, the transactions may not go through, or you may have to pay an additional fee. This can become problematic if you handle a lot of transactions each day. In this case, it’s worth searching for an LLC business bank account that does not limit how many transactions you can do each day, week, or month.

5. Business Integrations

Business integrations increase efficiency and help you focus on other parts of your company. You won’t integrate with every tool using an LLC business bank account, but integrations with accounting software can make tax season less complicated. Not every bank has suitable integrations for your company, but with thick competition, it’s worth filtering your search based on banks that integrate with your accounting and payroll tools.

6. Possibility for Growth and Upgrades

Many banks provide multiple packages for LLC bank accounts with varying perks and fees. The best financial institutions and fintech solutions let you start with a free or cheap account with a few features. You can upgrade to a more expensive package in the future as your business grows and you need more features. Business LLC bank accounts that don’t have good options for an upgrade can limit your company’s growth. You will have to use a more accommodative LLC business bank account as the features in your basic account are no longer enough for your company.

7. Perks and Other Features

The account perks and features vary for each bank account. Doing a lot of research and knowing your non-negotiable perks and features will increase the likelihood of finding the right bank account for your business. Few fees, great savings rates, ATM fee refunds, and easy access to loans are some key perks to consider.

An LLC business bank account is more than just a place to store money and receive payments. Online banking has increased consumer expectations. It’s increasingly normal to find banks that deliver several features and financial services for their clients. Don’t shortchange yourself by limiting your search to household names and the first few banks you find.

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