In 2020 alone, new businesses created a total of 2.9 million jobs. It goes to show how much starting a business adds to society, and how big of a responsibility it is.
A lot goes into successfully running a business, and in many cases, one thing that people miss is opening a business savings account. This isn't a requirement for a new business, but there are various reasons why you should do this when you're getting started.
For a rundown on why you should open one of these accounts, keep reading.
Who needs or can benefit from a business savings account?
Most people are perfectly fine with one bank account as they only need to manage their personal finances. When opening a business, however, things will be a lot easier if you keep your personal and business finances separate. Anyone that starts a business, regardless of how small it is, can benefit from opening a savings account for your business.
An online business account is easy to open, and you can track all income and outgoings for the business. An entrepreneur with multiple businesses may even want to have separate accounts for different businesses to keep things organized.
How to choose a suitable corporate savings account?
To find the best business savings account you’ll have to assess the needs of your business. Various factors can affect the account you choose, such as:
The size of the business
If it operates domestically only or internationally
The type of transactions taking place
You can compare things like business savings account rates and features that different banks provide to find something suitable for your business. Some companies, such as bunq, offer different plans, so you can pick something more ideal based on what you're after.
Benefits of a savings account for a business
Each month you can deposit income from your business into a savings account. While this serves as a good place to hold the money coming in from your business, it also provides a range of other benefits.
Prepare for emergencies
You're likely to have regular expenses each month. Everything you earn after these expenses have been paid can be considered business profit. It's good practice, however, to save a certain amount of this each month to cover any emergencies.
There's always a risk of unexpected expenses coming up. These can vary depending on the nature of your business, but it's always best to have some money aside to cover these. Without these savings in place, you might end up having to take out a loan to cover such expenses, which is a less ideal position to be in.
Be prepared for tax season?
A lot of business owners and entrepreneurs use a dedicated business savings account to prepare for tax season. In fact, being prepared for taxes is often cited as the main reason for maintaining a business savings account. It might even be the one reason you were expecting to be in this list.
At bunq though, we don’t think taxes should be treated the same as unexpected expenses or something that you can’t prepare for. That’s why anyone with a bunq Business account can enable AutoVAT, so that the bunq app automatically calculates and sets aside the VAT on all your incoming and outgoing payments. That way you always have a crystal clear overview of how much you have to spend on taxes, so you can use your business savings account for what truly matters, such as…
…Saving for future business growth
One of the main goals of every business is growth. With growth comes further expenses, so using savings accounts for businesses is a great way to save up money for such expenses. You can save money over time, then when you have something you need to pay for, you'll already have some money set aside.
Earn interest on deposits
Even with a small business savings account, you can earn more money through APY (annual percentage yield). With every deposit you can earn interest, giving you some extra cash depending on how much you're generating.
When looking at different accounts, the interest rate may be one of the factors that affect your decision. At bunq, we make sure to always give you the highest possible interest. For a Business Savings Account, you now get 1.05% interest on deposits of up to €100,000.
Make your business more creditworthy
There may come a point where you want to take out a loan, and proper use of a business savings account can look good to lenders. You can show them that you have savings in a separate account which will give them confidence that you're able to pay back a loan.
Finding the right savings account for your business
With so many benefits to using a business savings account, it's definitely worth doing. You may then be wondering what business account you should go with.
bunq is a modern mobile bank that can make things incredibly easy. We offer both personal and business accounts with various plans available so that you can find something that's perfect for you. Some of these are paid options, but you can get started with our Easy Savings Business Account today. Click here to find out more.
