It is advisable for every entrepreneur to open a dedicated bank account for their business. This makes it easy to keep personal and corporate finances separate and file accurate financial statements for the company. Preferably, it should be an account that’s accessible online, and in this article, we look at why online banking serves businesses best.
What is an Online Business Bank Account?
It is a banking platform for your company that you can access online. You can open an account from anywhere without visiting a physical banking branch. Digital banks are licensed by the government, so you enjoy the same features you’ll expect from a traditional bank.
What Differentiates an Online Bank From a Traditional One?
The name tells the main story. Online platforms operate primarily over the Internet, while traditional ones have physical branches that you can visit to access financial services. Many financial institutions offer both traditional and digital services; they started out as the former but had to offer digital services to remain competitive.
Digital banks usually charge lower fees than traditional ones and are easier to work with. Yet, traditional firms tend to offer a wider range of services and more adequate customer support.
Reasons to Open an Online Corporate Account
1. Ease of Use
Online business accounts are more convenient to work with than traditional ones. You can sign up for the account from anywhere you can access the internet, unlike the latter, where you must visit the branch to get one.
Digital platforms enable you to transact speedily. You can send money to anyone at the click of a button or receive money instantly from customers.
2. Financial Protection
Corporate accounts enable you to keep personal and business finances separate. This, in turn, helps you retain your limited liability protection. You won’t be held personally responsible for company debts if you run a limited company and keep corporate and personal accounts separate.
3. Payment Processing
Corporate accounts allow you to set up the structure to receive payments online from your customers. You can hardly do this with a personal account; even if you can, there’ll be a limit on what you can receive.
4. Easier Tax Preparation
Tracking your expenses is noticeably easy on an online platform; you can simply generate a list of them at the click of a button. This means it’ll be easier to calculate your loss and profits and report accurately to the tax authorities. You can also monitor expenses that are deductible from your tax liability.
5. More Affordable
Digital banking institutions usually take lower fees than conventional banks. Some don’t charge fees on simple transactions like withdrawals and money transfers. It can save you a significant amount in the long run.
Are Online Accounts Safe?
Digital banks are licensed and regulated just like regular ones. The same rules apply to them, so your money remains safe as you’ll expect. Digital banking platforms are also insured by a government agency, e.g., the Federal Deposit Insurance Commission (FDIC) in the U.S. and the Financial Services Compensation Scheme (FSCS) in the U.K. You will get the same protections as any other bank.
Things to Consider When Choosing an Online Banking Platform
- Ease of Use: The platform should be easy to navigate and interact with.
- Fees: Check for the fees any platform charges and ensure you’re comfortable with them before signing up.
- Interest Rates: You can shop for better interest rates on saved money.
- Transaction Limits: Check for any daily, weekly, or monthly transaction limits the platform imposes and be sure you’re okay with them.
We have outlined what an online business account is and its benefits. You can pick from endless options, such as the Silverbird account. We mentioned the important things to consider before making your choice; adhere to these tips to make the best choice.