Savings or Checking account; The difference between the two
The difference between saving and checking accounts is that businesses use a personal account as a backup account while a checking account is used to manage business finances.
Savings Account
A savings account is best for a business’s personal use. This gives them the advantage of being able to save and grow their money without borrowing capital from lenders. It is also useful in a way that businesses can use their accounts as an emergency source of funds.
Checking Account
This type of account is best for businesses to separate personal finances from business finances. When you want to organize your finances and easily determine what is personal and what is for your business, this is the best type of account that you should have.
Factors that need to be considered when choosing the best account for your business
If you are a business owner, choosing the best account for your business is one of your priorities. The process will help you determine what gives you the most benefit and how it will work for you. Listed below are some factors that you need to consider in choosing the right account.
Fees
Know if there are any management charges that your chosen bank applies. Before deciding what account you will open for your business, it is important to narrow down and break up maintenance charges to prevent unwanted charges.
Transaction Limits
The downside of business accounts is the set transaction limitations. If a business exceeds the limit set by the bank, you will be charged for it, or sometimes it will be automatically deducted from your account.
Minimum Account Balance
If your chosen bank requires you to maintain a certain amount of balance, you need to make sure that the money flow inside your account is above that and not go beyond it to prevent additional charges.
Security
Your account’s security is one of the most important things that you need to consider when opening an account. Putting your account’s security is most likely protecting your business. With the advancement of technology, you can now take advantage of it and adopt technology encryption.
Ease of Integration
Unlike the traditional way of banking, modern accounts are now integrated into some software that helps business owners strictly monitor their accounts. This will update the account holder regarding the current updates to their accounts.
Why checking account is better than a savings account for business?
When you are a business owner, having a checking account is better than a savings account. Checking accounts are suitable for regular transactions such as bill payments, ATM withdrawals, and purchases. It is also best for loan applications since it typically earns less interest compared to other accounts.
Still hesitant about what business account to choose? Unicapital will help you choose the best account for your business based on your daily needs.
