It is wise to have a business banking account as well as a personal account.
Keeping your business cash flow separate from your personal cash flow makes it much easier to balance your books. And your accountant will find it quicker and easier to assess your accounts, so will likely charge you less.
It is not a legal requirement to use a personal account for your business finances. But having a business banking account will mean you are covered by the business banking code rather than the personal banking code, which is obviously more suited to your needs.
Another benefit is that you will have a business manager looking after your account, who can give you expert advice. And if you wish to borrow money, a bank may be more flexible with you if you have a business account.
It is also easier if you want to add someone else to the account at some point, for instance a business partner or someone to run the account by proxy in your absence.
Most banks will offer some sort of free banking period.
On 14 March 2002 the Competition Commission ordered the banks to pay an interest rate of 2.5% under base on business current accounts. It should now be much easier to get credit interest from banks, although in a 2005 poll over a third of small and medium business owners said they still didn't receive interest on their main business account.
So shop around. Use our resources bar on the right-hand side to compare the deals offered by the banks.
You don't have to use a business banking account. But by doing so, you will have more accountability and transparency in your business dealings.
And you accrue even more credibility from the fact that, by letting you open a business account with them, the bank has sanctioned your business proposal.
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