Are Business Savings Accounts Necessary?
Having a dedicated business banking account is necessary to operate your company and keep your personal finances separate from your business finances. Intertwining those can become messy.
While a business checking account is necessary to pay your vendors, receive payments and purchase merchandise as a small business owner, a business savings account appears to be a less popular choice.
We were curious to see what our Twitter followers thought regarding a business savings account. On January 9, 2019, we Tweeted the below poll to our followers:
We were surprised to find out that not one of our respondents said they already have a savings account for their business. All respondents said they don’t have a business savings account: 38 percent said they don’t believe it’s needed, and 62 percent said they don’t currently have an account but want to.
So if the majority of our respondents don’t have a business savings account but want to, then what’s stopping them?
If you are one of those entrepreneurs who doesn’t have a business savings account but wants one, comment below and let us know why you haven’t made the move yet. What’s holding you back? Is there something complicated about the process? Are you unsure of where to start? We would love to hear your feedback on this topic!
Why Savings Accounts Can Be Helpful for Solopreneurs
Solopreneuers tend to be in the beginning stages of building their empire, which means they might be strapped for cash. A business savings account allows them to take the money and income they do have, put it away, earn interest on it and use this for business emergencies or everyday business expenses.
Having a separate account for your business will help keep you financially accountable — you don’t have a never-ending pot of money to keep pulling from. As a solopreneur, having a business savings account shows you’re concerned about the financial well-being of your business and that you plan to grow it by saving for those future expenses.
If you’re interested in setting up a business savings account, do some research first on the different types of accounts on the market and decide which one is best for your business.
There are plenty of financial institutions to choose from if you want to establish a business savings account; check out Chase or American Express if you want to bank with a large, established brand. You can also check with your local bank or credit union to see what they offer and how it compares.
Looking for more information on everything related to business, especially when it comes to business finances, business accounting and business banking? We have you covered on the Incfile blog. We rounded up our top blog posts on business finance so you can check them out today:
- How to Open a Business Bank Account for Your LLC
- 5 of the Best Business Checking Accounts for an LLC
- Understanding D-U-N-S Number & Why It’s Important for Your Business
- How to Save for Your Own Retirement When You’re Self-Employed
- Cash and Accrual Accounting: Which Is Better for Small Businesses?
- Why it Matters to Keep Your Personal Finances Separate from Business Finances
- THE Biggest Financial Mistake New Business Owners Make (and How to Avoid It)
- What Is Ordinary Income and How Is It Different From Earned Income?
- Taxes & Write-Offs for Your Solopreneuer or Freelance Business
- How to Pay Yourself as an Owner of an LLC
- Why It’s Important to Keep Business & Personal Funds Separate
- Kicking Off Your Business With the Right Financial Projections for Growth
- Can I Deduct My Lunch? Business Deductions You Might Be Missing