It is important for every business to open a corporate bank account. This makes it easy to keep accurate financial records, whereas mingling business and personal funds can cause confusion. It also makes it easy to track corporate expenses that you may be able to deduct from your tax liabilities.
You have two main options in opening a corporate account. You can go to your physical branch or for an online business account. An online account is easy to sign up for, as you don’t need to visit a bank branch to do this; you can do that from anywhere as long as you have an internet-connected device. This article will explain what an online business banking platform is, its features, pros and cons, and show you how to easily open one.
What Is an Online Business Account?
This is simply a business banking platform you can access online. You can open it from anywhere without visiting a physical bank branch. They are run by full-fledged and licensed banks, so you still enjoy the features of a typical bank account.
Banks have existed for centuries, but online ones have only been present for a few decades. Most major financial institutions now offer internet services to make things easier for customers. For example, you can now pay suppliers and vendors directly from your device, unlike in the past when you needed to visit a physical branch for that. Similarly, you can now receive payments with ease with a digital banking app.
How Does an Online Bank Differ from a Traditional Bank?
The name alone tells the core difference. Online banks operate primarily on the web, while traditional banks have physical branches that you can visit to access banking services. Most traditional banks also offer web-based banking services to customers who prefer them.
Online platforms tend to charge lower fees than traditional banking firms. They also tend to be more user-friendly and convenient to use. Yet, traditional financial firms tend to offer a broader range of services and better customer support than web-based ones. They also tend to have automated teller machine (ATM) networks that you can use for free, while web-based banking services incur charges on those same ATMs.
Are Online Business Bank Accounts Safe?
Bank accounts are usually insured by a government agency such as the Federal Deposit Insurance Commission (FDIC) in the U.S. The same insurance offered to traditional accounts also applies to online ones. No financial institution can offer internet-based accounts without a license, so don’t expect atypical issues.
However, as with anything digital, you must also consider the hacking risks and take steps to avoid them. For example, ensure you use strong passwords that are a mix of words, letters, and symbols. Also, set up two-factor authentication so a hacker can’t just break into your account even if they obtain your password.
Remember not to give sensitive details such as a PIN or password to anyone; your bank won’t demand this, and only a hacker does. With these precautions, your funds will be very safe.
What Features Will My Online Business Bank Account Offer?
- Low-cost and swift transfers: You should be able to send money between different accounts with little or no fees. Transfers should settle speedily; the same applies to receiving funds from other accounts.
- Corporate cards: An ideal service should offer credit or debit cards for corporate expenses. These cards make it easy to monitor business expenses because every transaction is automatically recorded.
- Account software integration: Many digital banking platforms have direct integrations with popular accounting tools like QuickBooks and Xero. These integrations make it easy to monitor earnings and expenses and prepare financial statements.
- Simple deposits: You should be able to deposit money seamlessly for little or no fees.
- Invoicing: Some platforms offer tools that let you create and issue invoices to customers. Once the customer pays, the money is automatically credited to your account.
What Are the Pros and Cons of an Online Business Bank Account?
- Easy to use: Most online finance platforms focus on user experience, making them easier to use and navigate. You will likely be able to find features and use them with little hassles.
- Convenience: With a digital platform, you can transact from anywhere without visiting a physical branch.
- Lower fees: Web-based financial platforms tend to have lower transaction fees. This is a strategy to lure customers away from traditional institutions.
- Limited customer support: Digital platforms usually offer support through email or phone lines, and you may have to wait a bit to get a response. In contrast, you can walk into a physical branch at any time and likely meet personnel that will attend to you.
- No ATM network: Digital platforms don’t usually have ATM networks like traditional institutions. Thus, you will have to use another institution’s ATM and likely pay a fee for every transaction.
How Do I Open a Business Account Online?
- The first step is to choose the platform that you want to register on. You need to consider the features and your preferences with each platform. For example, do they have a minimum balance? What are their fees? Do they offer corporate cards? Silverbird is an example of a digital banking platform to select.
- Prepare documents. You will likely be required to provide some documents as part of the registration process. These can include your tax identification number, proof of registration, business license, past financial statements, etc.
- Sign up. Go to the platform of your choice and complete the steps to sign up. This is where you will need to provide documentation and wait for a review.
- If your application is reviewed and approved, you will be given access to the digital banking platform, and you can start transacting.
We have explained virtually everything you need to know about an online business banking platform; its features, advantages and disadvantages, and how to open one. If you are looking for a suitable platform, Silverbird is an ideal one that lets you transact across borders with over 30 currencies.
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