Having Multiple Business Bank Accounts In Nigeria – Everything To Know

Providing you meet the criteria set forth by the individual banks, you may open as many business checking and savings accounts as you like.

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When launching a company, one of the first steps is opening a business checking account. However, depending on the state of the company’s finances and its long-term objectives, it may be prudent to maintain more than one business bank account.

As long as you meet the criteria for opening a business bank account and your application is accepted, you are free to open as many accounts as you like. Check out these factors if you’re thinking about opening multiple business bank accounts.

When Should a Company Have More Than One Bank Account?

When dealing with the requirements and fees of multiple financial institutions, it’s important to have a clear purpose for each business account you open.

For tax purposes, you need to break out specific costs.

Consider opening separate business checking accounts for things like payroll and client payments if you’d like to keep better tabs on both.

If your company makes quarterly estimated tax payments, you may find that maintaining a checking account or multiple checking accounts is helpful. There are other options, such as the Found Small-Business Banking account or the Lili Business Checking account, which will help you save money and keep track of your tax deductions mechanically.

You hope to accumulate interest.

If your company has a healthy cash flow, it can put those funds to work for you by earning interest in a savings account.

The FDIC reports that the average national interest rate on savings accounts is 0.24% as of this writing, while the average interest rate on checking accounts is just 0.04%. A few of the best business savings accounts we recommend pay out 2.50 percent or more.

Business money markets and certificates of deposit offer slightly higher rates and should be considered. The interest rate on a business CD is fixed for the duration of the CD, so you will not benefit from any future rate increases. The funds in a CD are locked away until the maturity date, which can range from one to five years.

Various aspirations necessitate your putting money away.

It might make sense to split your savings between multiple accounts if you plan to use the money for various goals. Saving for an emergency fund is a long-term goal, while short-term goals like upgrading equipment require more immediate funding.

To avoid the hassle of opening and maintaining multiple accounts, some business banking providers, such as Novo, incorporate features that allow you to allocate funds to specific purposes.

Using Multiple Business Bank Accounts: What to Watch Out For

Having to keep tabs on multiple business bank accounts can complicate bookkeeping in a number of ways. Account management presents its own unique challenges. When opening a business checking account, it’s important to know the account’s specifics, such as its minimum balance and maximum transactions per month, to avoid overdraft fees.

Look around and compare the features of various checking and savings accounts. Traditional business savings accounts only permit six withdrawals and transfers per calendar month, which is insufficient for some enterprises. To counter this, interest-bearing checking accounts like Bluevine Business Checking (2.00% APY) allow for unlimited withdrawals and high annual percentage yield (APY).

Tips for Opening Multiple Business Bank Accounts

While the specifics of establishing multiple business bank accounts will vary from company to company, there are a few universal requirements.

  1. Apply for a tax ID number from the Internal Revenue Service. Applying for an EIN is free, and most banks require you to provide one when you open an account. Additional paperwork, like a government-issued photo ID, may be required when opening a business bank account.
  2. Make an application for a company checking account. For obvious reasons, this is the type of business account you need to open first: A business checking account streamlines the process of billing, paying employees, and receiving client payments. It’s a great first step toward building a solid foundation for your company’s future banking needs and establishing credibility in the marketplace.
  3. Think about what other types of accounts your company might benefit from having. With the right credentials, you can open a second checking account with any bank you like. An interest-bearing business savings account is a good way to put spare cash to work. An example is the Live Oak Business Savings account, which accepts deposits as low as one cent and offers an APY of 3.50%.

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