There are different requirements and reasons for opening a personal or business bank account. However, the success of either a business or personal financial plan starts with having an account that fits your needs.
Personal Bank Account
A personal bank account can be used for paying bills or saving money. There are several types of accounts to choose from, including savings, checking and money market.
Business Bank Account
A business account primarily keeps track of a company’s cash flow and transactions. Any type of business, from sole proprietor to corporation, can open a business bank account.
To open a personal bank account, the applicant is required to provide credentials such as a Social Security Number and driver’s license information. Banks will need records such as a business license, Fictitious Name Certificate and Business Tax ID number when starting a business account.
A personal bank account may charge fees for low account balance and excessive transactions within a bank cycle. Business bank account fees are more expensive than those for personal bank accounts. Other fees are charged to business accounts if transaction and cash deposit amounts exceed their limits.
To avoid tax problems, personal funds should be kept separate from a business bank account.