The process of opening a business account can vary from country to country, but there are a few steps you can expect across the board. For one, business accounts are generally opened during the incorporation stage of your business. In this blog, we provide a step-by-step guide on how to open a business account, plus everything you need to know to get up one and running.
What is a business bank account?
A business or ‘corporate’ bank account is a type of bank account that is used solely for business transactions. They’re generally used by large and enterprise-level companies, sole traders, charities and other business organisations. Businesses can open accounts with traditional banks or they can use modern alternatives like online banks, neo-banks, fintechs and electronic money institutions (EMIs).
Traditional vs. online banks
Traditional business bank accounts refer to the corporate accounts you open in a local branch – take Lloyds bank or Santander in the UK, for example. Online banking, on the other hand, refers to banking whereby transactions are conducted electronically – using the Internet. They don’t have physical branches but instead leverage the power of technology to service their clients. Think of the services offered by fintechs and EMIs like 3S Money, Wise or Revolut.
With a traditional business bank account, you can:
- Make deposits
- Send and receive payments
- Apply for business loans
- And much more
When it comes to online corporate accounts, there are many more services available that are attractive to budding businesses. In addition to the key features mentioned above, these corporate banking solutions provide businesses with tools and services such as:
- Invoicing and billing tools that can be integrated with other accounting software.
- Merchant services (like e-commerce payment gateways).
- APIs and integrations, such as accounting tools and CRMs.
Now that we know what both banking types offer businesses let's conduct a side-by-side comparison of the two so we can identify some of the pros and cons.
-
Traditional business banksOnline business banksHigh transaction fees✓✕
Quick, easy account setup ✕ ✓ Fast, low-cost international payments ✕ ✓ Fast, low-cost domestic payments and transfers✕✓Dedicated client support✓✓Apply for business loans ✓ ✓ APIs and integrations✕✓
It's worth noting that with an online business account like 3S Money's International Business Account, sending and receiving international business payments is much faster and cheaper than with traditional banks. Read on for information on fees.
Who should use a business account?
Two main types of businesses should use corporate accounts for their financial operations. They are:
- Sole traders: a person who is self-employed, running their own business. For sole traders, having a business account is necessary for separating personal and business funds.
- Limited companies: businesses that are legally considered ‘distinct bodies’ from the people who run them.
Getting started
So, we’ve covered what a business account is and who needs to use one, now let’s dive into how to get started. The first step is to gather the required documents. You’ll need the following:
Personal identification documents
These documents typically include government-issued photo identification, such as a passport or state-issued ID card.
Business registration documents
These documents demonstrate the legal structure and registration status of the business (depending on your business type).
Tax identification number
A Tax Identification Number (TIN) is a unique identifier assigned to a business entity for tax purposes.
Evaluating your options
Once you have the required information, you’ll need to start evaluating bank options. For this, you should consider different factors to ensure that the bank you choose aligns with your business's specific needs and goals. Here’s what you’ll need to consider:
Customer support
Managing your corporate account as well as other business obligations can be difficult, especially if your business makes and receives international payments. 3S Money provides unparalleled customer support via dedicated account managers, who take a consultative approach when it comes to your business banking needs. Start your application today and be pre-approved in less than fifteen minutes.
Services
Does the account include various services such as:
- Checking and savings accounts
- Merchant services
- Business loans
- Lines of credit
- Online banking and mobile banking apps?
You’ll want to consider the services available before making your decision.
Fees
Budgeting and protecting your bottom line from additional fees is important for any business, no matter the size. When choosing the right business account, consider things like:
- Monthly maintenance fees
- Transaction fees
- Overdraft fees
- ATM fees
- Wire transfer fees
- Any other charges that may apply to your account.
With most traditional banks, sending and receiving money abroad can be an expensive, time-consuming process. International transfers can take up to five working days, with SWIFT payments costing up to $20 per transfer (plus bank fees). Thankfully, with a 3S Money international business account, international payments are same-day and it only costs $1, or your local equivalent, to send SWIFT payments - and $0 to receive them.
Another factor to consider when weighing up your options is meeting with a bank representative, if you’re going for the traditional option. If you’re opting for an online business banking solution, you can get in touch from the comfort of your own home. For example, with a 3S Money account, you can reach your dedicated account manager via WhatsApp.
Choosing the right type of account
Here are some of the account types to choose from:
- Merchant account
Merchant services encompass a range of financial services that enable businesses to accept and process electronic payments from customers. - Business savings account
This type of account is ideal for setting aside excess funds and earning interest on them. - Business certificate of deposit (CD) account
Like a business savings account, this account allows your business to save funds – but at a fixed interest rate for a fixed time period. - Business money market account
A type of account (like a savings account) that allows businesses to earn competitive interest. - Business checking account
This type of account is ideal for handling everyday financial activities such as receiving payments, making purchases, and paying bills.
Once you’ve selected the right account for your business, the final step is for you to open it and start reaping the benefits.
4. Opening an account with 3S Money
Opening a business account with 3S Money couldn’t be easier. You can be up and running in four simple steps:
1. Check your eligibility
Our express online application will assess your eligibility for a 3S Money account – usually pre-approved in under 15 minutes.
Our express online application will assess your eligibility for a 3S Money account – usually pre-approved in under 15 minutes.
2. Create an account
Here, you’ll need to provide proof of ID, such as your EU identity card. 3S Money follows strict compliance and Know Your Customer (KYC) procedures to ensure the security of your account.
Here, you’ll need to provide proof of ID, such as your EU identity card. 3S Money follows strict compliance and Know Your Customer (KYC) procedures to ensure the security of your account.
3. We'll get in touch
Next, you’ll hear from our Sales team via welcome call or email. They'll want to understand any bespoke payment needs you may have and will be on hand to answer any questions.
Next, you’ll hear from our Sales team via welcome call or email. They'll want to understand any bespoke payment needs you may have and will be on hand to answer any questions.
4. Final compliance checks
Lastly, our compliance team will personally review your application. If your application is successful, you’ll be up and running with human support on hand to assist, whenever you need it.
Lastly, our compliance team will personally review your application. If your application is successful, you’ll be up and running with human support on hand to assist, whenever you need it.
Get started today
Ready to streamline your business payment operations and access new global markets? 3S Money can help. Open an International Business Account with 3S Money today.
FAQs
-
Some banks require an opening deposit ranging from $5 to $1,000 to get started. Others have no initial deposit, and some have a monthly maintenance fee. 3S Money requires an opening deposit of around $300, depending on your account type, plus monthly maintenance fees.
-
Yes you can. 3S Money makes it quick and easy to open a business account, in only four simple steps.
-
Depending on which type of banking provider you use, setting up a business account can take anywhere up to four weeks. With 3S Money, you can be pre-approved for an international business account in less than 15 minutes.
