If you run your own business, then using a proper business bank account is a great idea. This will not only make it easier to look after your businesses finances but also avoid getting them mixed up with your personal finances. Having to dig back through your personal bank account and de-tangle your transactions is no fun at all! Of course, if you have a limited company, then you must use a separate business bank account.
What do you need to know before signing up?
Although the actual process is quite simple, there are a few things you will need to know first to make the best business choice:
- Choose your bank carefully – The first thing you need to know is that each bank will offer different deals for opening a business bank account. Naturally, many people opt for the bank they already use for their personal account, and this could see a good deal come your way. However, it is also a good idea to shop around a bit to see exactly what is on offer at the various banks.
- Bank charges – One thing to factor in with a business account is any bank charges you may have to pay. This is quite a shock for many, as you will likely be used to getting most services for free on your private account. Some banks may not charge any fees in this way, but some will make you pay for transfers, withdrawals and using your debit card.
- Interest – Some banks’ business accounts will pay interest on your balance, while some may not. Obviously, this is a big difference, so always make sure to find out the details when researching which bank to use.
- Remember your ID – When setting up your business account, all banks will need to see identification documents to comply with money laundering regulations. Remember to take your passport and related business documents if yours is a limited company.
Research is key
Although there are a few things to know about before setting up a business account, most of this information can be obtained through prior research before you make your final decision on a particular bank. Make sure to fully read all the terms and conditions so that no nasty surprises await.
This will help you avoid any financial pitfalls like the PPI scandal that has rocked the banking industry lately. Many people did not know they were being sold PPI due to not fully reading the terms of the deals they were agreeing to. This has led many to now make a claim through companies like ppi-claim.co to recover their money. By making sure you are fully aware of what you are agreeing to, you will help avoid any issues like this.
Business banking is a sensible move
For business owners, setting up their own business bank account is worthwhile. Although it may seem like there is a lot to think about at first, it is not that arduous. Hopefully this article has given you a few pointers on what you need to know to make the process as smooth as possible.