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Business Bank Accounts: do I need one and when should I open it?



If you’ve been wondering if you need a separate bank account for your business, you’re in the right place. This article will explain why you need a bank account, when to open one, and some of the pros and cons.

Do I need a business bank account?

There are a couple of exceptions, but on the whole, you’ll want to open a separate bank account for your business. Put simply, keeping your business account separate from your personal bank account will protect your personal assets and, for want of a better word, legalise your business.

There are a couple of differences between a business bank account and a personal bank account, although they may not appear hugely different. Unfortunately, start-up business accounting with a business bank account will often accrue more fees and charges. However, these are practically the only drawbacks of having a business bank account. They also usually come with extra perks and benefits which we will outline below shortly.

When should I open a business bank account?

In short, the main reason you should open a business bank account is because there have been plenty of stories from business owners who have used personal bank accounts for their businesses and their assets have been frozen and their accounts have been closed when the bank found out. So if you don’t want to lose access to your money, you’re going to want to open a business bank account as soon as you even begin thinking about starting your own business – unless you have a side freelancing business with no business expenses, for example.

Pros of a business bank account


Keeping your personal account and your business account simplifies things. When tax season comes around, for example, you won’t have to waste any time trying to verify if expenses were a part of running your business or just a part of your life. Even something as simple as a dinner out could create confusion so it’s best all round to just keep your personal ad business funds in different accounts.


When you opened your business you should have registered your business with the government. No matter which kind of business you chose, one of the benefits of being registered is limited liability, ensuring that if someone sues your business, your personal assets won’t be at risk.

If you have your business and personal money combined at all, that limited liability is immediately at risk. You’ll have hard time proving which of those assets belong to the business if all the money is in the same account.

Legitimacy and professionalism

All things considered, it’s likely that as your business grows you’ll need some kind of funding. When you apply for a business loan, you’ll probably have to show your lender financial documents. If they see that your personal and business money is mixed, they might wonder how legitimate your business is, making it harder for you to get a loan.

I'm Nikos Alepidis, blogger at motivirus. I'm passioned for all things related to motivation & personal development. My goal is to help and inspire people to become better.

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