How to find a bank for your handmade business will probably require you to do some research and it may cost some money up front. But honestly, that’s just part of being a business owner.
Opening a business checking account makes your handmade business legitimate and keeps your personal money totally out of the picture. It also makes your bookkeeping easier, because all of your business related transactions are kept in one place. I talked about this yesterday in Does my handmade business need a bank account?
While many banks will offer free personal checking accounts, it’s quite likely that there are different rules for business accounts.
You see not all bank accounts are created equally.
Just about every bank charges some sort of fee(s) when it comes to business checking accounts.
- There may be a fee to open the account
- You might need to keep a large minimum balance in the account at all times
- There may be a monthly bank service charge
- If you have more than a certain number of transactions each month, there may be a transaction fee
Credit Unions are often a good option, at least I found my local Credit Union to be, so don’t forget to check them out as well. Here are the details of what my local Credit Union offered me for my business account:
Free checking with no minimum balance- Savings account automatically set up – that MUST always have a $50.00 minimum balance
- A combination debit/credit card – provided at no additional cost with no annual fee
- My first 100 business checks provided free
- Interest & dividends paid quarterly – granted it’s not much, but hey they are paying me to have an account with them
- $1,500.00 line of credit/overdraft protection
- No membership fee
Free checking with no minimum balanceBefore you attempt to open a business checking account with any bank
Make sure that you have the following items:
- Business or DBA (Doing Business As) license – this can be free or provided at a minimal cost through your State
- State Sales Tax Permit – this is usually free through your State’s Department of Taxes
- FEIN or EIN (Federal Employer Identification Number) for your business – free through the IRS (Internal Revenue Service) and is used instead of your personal social security number.
How to find a bank for your handmade business by making a list of questions for the bank to answer
Before your run right down to your local bank and sign up for a business checking account, make sure you have a list of questions for them to answer. Yes, it’s totally ok to interview the bank you plan on doing business with by asking important questions such as:
- Do you charge a fee to open a business checking account?
- Is there a required minimum deposit to open the account?
- How much does it cost to purchase checks?
- Does the account come with a debit or credit card, or do I need to apply for these separately?
- Do you have a mobile app?
- Can I use the mobile app to deposit checks?
- What is the minimum monthly balance that is required?
- Is there a maximum (or minimum) number of transactions I can have each month?
- Do you offer overdraft protection? If so, how much?
- What are the fees for bounced checks?
If you find that your local bank or credit union has all kinds of fees and restrictions on business checking accounts, you might want to look into other banking options, including on-line banks.
I did a Google search for “how to find free business checking” and came up with a couple of resources to help you.
Both of these sites summarizes any fees, balance minimums, transaction maximums, et.
I hope you’ve found this post to be helpful. If so, please leave a comment and let me know.
These are great questions that I often ask when looking for a personal banking account too! Thanks for such helpful information, Nancy!
Thank you Courtney 🙂
Great list of questions to have! Thank you..
I liked the tips you provided for finding the right bank for home biz.I will check my local area online options.
This is awesome advice Nancy. When I opened a bank acct for my handmade Minky Blankets, I found a bank that had no fees as long as I kept $250 minimum. I was happy with that!
Those are great questions to ask a prospective bank! I’ve never thought of doing that before.
Jeanine, most people don’t think about asking questions like this – but why not, the bank feels they can ask you all kinds of questions! Personal bank accounts are usually a breeze, but business ones can hold a lot of unpleasant, hidden surprises. We all need to ask questions in order to make sound business decisions. 🙂
Thank you for sharing these tips with us as I rely on Paypal for any payments I make through my Blog but not that I want to branch out and work with local companies who will be paying me it’s time to look into a Checking Account and I have a friend who works for a Credit Union so I will check with him about getting a account through them as well as the bank I use for my personal account which is a small Family- Owned Bank called Happy Bank.
Glenda, you’re welcome! Glad you found it helpful. For some reasons a lot of people overlook credit unions. But I was appalled at the fees & minimum balances that my regular bank wanted!