separating personal savings and business savings

Top Three Reasons to Separate Your Personal Savings and Business Savings

A dedicated business bank account is a must-have for any small business owner. More than just a place to store money, a business savings account can help your business succeed. While it may be tempting to transfer money from your personal savings to fund a business venture or live off business deal proceeds, separating your accounts will serve you and your business well. While there are numerous benefits of opening a dedicated business bank account, we’ve highlighted the top reasons below.

1. Taxes

When you’ve kept your business and personal income and expenses separate, tax season won’t seem as daunting. For one, you can set aside money in a separate interest-bearing business savings account to save for taxes. Additionally, you or your accountant will have a very clear view of your business expenditures – every receipt matters!

2. Budgeting

Small business owners often need quick cash. If you have savings safely tucked away in an interest-earning business savings account, you’ll be better prepared for cash flow emergencies, tax season or unexpected business expenses.

3. Stability

A solid business savings balance can be a factor when banks evaluate the small business for credit. Banks look kindly on small business owners who can show they have the means and discipline to pay back borrowed money.

business savings account can and should be an integral part of your overall business plan. It demonstrates contingency planning and shows others who may join your venture later that you’re ready for the long haul.

 

A few questions you should ask when choosing a business bank:

Is your bank experienced in working with business owners?

You may wonder why this really matters. When your bank is experienced in working with business owners, they understand and can anticipate your needs. At Live Oak, we’re deeply proud of the support we offer small businesses across America. We design our loans and our banking products to meet small businesses’ needs, and our employees support small business owners every day.

Does your bank charge unnecessary fees?

Many banks charge monthly maintenance or service fees on business bank accounts. You must watch out for hidden fees and make sure you understand what you are being charged. Live Oak does not charge monthly maintenance or service fees, and any other fees we do charge are completely straight-forward and easy to understand. You can check out the details here.

Does your bank have a required minimum to open an account?

Find out if there is a minimum required to open an account. Live Oak’s business savings accounts do not require this, meaning you can open a business savings account regardless of how much cash you have on hand at the moment. While Live Oak doesn’t have a minimum balance, note that customers must have a balance of $0.01 to earn interest. Our business Certificate of Deposit accounts have a $2,500 minimum deposit required.

 

Partner with Live Oak Bank today and open a high-yield, FDIC-insured business savings account by visiting liveoakbank.com/business-banking. It takes just a few minutes. Or, to speak directly with a Customer Success Manager about your business savings account, call 866.518.0286.

 

  1. The data supplied by the SBA reflects 7(a) gross loan approvals during FY 2019.
  2. Live Oak Bank was awarded the 2019 Commercial Lender of the Year by the U.S. Department of Agriculture (USDA) for highest dollar volume.