Business Checking Account FAQs: Everything You Need to Know

Opening a business checking account is a big step for any owner. From how to open one to why you shouldn’t use a personal account for business funds, this guide gives you the information you need to make the best decisions for your business.  

Frequently asked questions about business checking accounts 

1. What is a business checking account? 

A business checking account is a bank account specifically designed for businesses. It allows you to manage your business income and expenses, pay vendors, receive payments from customers, and track your cash flow. 

2. How do I open a business checking account? 

To open a business checking account, you'll generally need to provide your business' Employer Identification Number (EIN) or Social Security number if you're the sole proprietor. You'll also need documentation that proves your business exists, such as Articles of Incorporation or a business license, and personal identification for yourself and any other owners. Finally, be prepared to make an initial deposit, which may vary depending on the bank or credit union.  

3. What should I look for in a business checking account? 

Choosing the right business checking account depends on your specific needs. Here are some key features and benefits to consider: 

• Transaction volume. Estimate the number of transactions you expect to make each month. Some accounts have limits on free transactions, and exceeding those limits can result in fees. 
• Monthly fees. Many business checking accounts charge monthly maintenance fees. Look for accounts with low or waived fees, especially if you're a new or small business. Some banks and credit unions waive fees if you maintain a minimum balance. 
• Online and mobile banking.¹ Access to online and mobile banking is crucial for managing your finances efficiently. Look for accounts with user-friendly platforms that allow you to view balances, transfer funds, pay bills, and deposit checks remotely. 
• ATM access. Consider your ATM usage needs. Some accounts offer free access to a network of ATMs, while others may charge fees for withdrawals. Take note, too, if a financial institution has Interactive Teller Machines (ITMs), which allow for enhanced ATM transactions like withdrawing cash in denominations of $1.  
• Software integration. If you use accounting software like QuickBooks or Xero, check if the bank or credit union offers seamless integration. This can save you time and effort by automating data entry. If you send and receive invoices, also look for access to a tool like Autobooks.²  
• Credit card processing. If you plan to accept credit card payments, inquire about the bank's merchant services and associated fees. 
• Member support. Choose a bank with responsive and helpful member support in case you encounter any issues. 

4. Can I deposit a personal check into my business account? 

While technically you might be able to deposit a personal check into your business account, it's generally not a good idea and should be avoided. This practice, known as commingling funds, can create several problems. We expand on these below.  

5. Why is commingling funds a bad idea? 

Commingling funds can jeopardize the liability protection offered by your business structure (like an LLC). If your business is sued, creditors may be able to access your personal assets if your finances are intertwined. 

It’s also difficult to track business income and expenses accurately if you commingle funds, leading to potential tax errors and audits. It becomes challenging to differentiate between personal and business transactions, making tax preparation difficult. 

Lastly, mixing personal and business funds makes it hard to get a clear picture of your business's financial health. You may not be able to accurately assess your profitability, cash flow, or expenses, which can lead to poor financial decisions. 

Ready to open a business checking account? Turn to General Electric Credit Union’s Business Services team for help narrowing down your choices. Our Simply Free Business Checking Account is a straightforward account with no monthly maintenance fee. If you want an interest-earning account, look no further than our Premiere Business Checking Account.³ The monthly maintenance fee is waived by maintaining an average daily balance of $10,000. Visit our checking page to learn about the benefits of GECU business banking, including the perks laid out in this article as well as: business sweeps, Positive Pay, and Remote Deposit Capture.⁴