How are business bank accounts different from personal bank accounts?

0

Trying to suss out whether I should open a business bank account for a new limited company I’ve got on the go. But they don’t seem much better than personal bank accounts. What exactly are the differences between the two? Does anybody know?

Answers

0

A business bank account works in much the same way as a personal current account. You will receive a bank card and chequebook, you can apply for an overdraft, there may or may not be monthly fees for usage, you may receive interest on credit balances, you will have access to online and telephone banking… it all depends on the account and the bank. However, almost all business accounts do require a credit check to be carried out, which can be problematic for some people.

Many business accounts do have different fee structures and interest rates than personal accounts, so you might not get as much free banking with a business account, and you may be charged for certain transactions. However, the terms and conditions of some personal accounts do prohibit their use for business purposes, so it may be necessary for you to open a dedicated business account.

I would suggest speaking to your own bank first of all. They may be able to offer you a good deal on a business account and give you specific advice tailored to your business needs. You should also shop around and look on the comparison websites for up-to-date deals from the major banks - there are some great deals out there, but there are also some terrible ones so do your research!

If you are worried about credit checks, take a look at CardOneBanking and CardPlus. No credit checks are carried out for these accounts.

It’s easier for sole trader to get away with using a personal account, but I would always recommend opening a business bank account for a limited company. The account will be registered in your company name, thus legitimising your business, and it will enable you to separate business transactions from personal transactions. Just think about how much easier this will make your record-keeping and accounting, especially if you have a high volume of sales and purchase a lot of stock.

a year ago
 

Your answer