4 Things to Consider When Choosing a Bank Account as a Freelancer or Entrepreneur

Having a bank account is beneficial regardless of your job or the type of work you do. Keeping your cash in the bank can help you organize your finances and make paying bills more manageable. As a self-employed worker, your finances will likely look much different than a traditional employee's, so having a bank account that meets your business needs is a must. 

Many self-employed people open specific accounts for their businesses. Having a separate bank account lets you separate your personal and professional finances. It can also make tax season less stressful, because you can easily reference your bank statements when organizing your tax documents.

Are you thinking of opening a small business bank account soon? Here are a few things to look for when choosing a bank account as a freelancer or entrepreneur. 

1. Pay attention to account limits 

As you research the best banks for small businesses and look at bank accounts, paying attention to account limits is a good idea. Many business checking accounts have cash deposit limits and transaction limits. If you exceed these limits, you'll be charged fees.

If you plan to make frequent cash deposits or transactions posted to your account, verifying account limits is essential before opening a new bank account. Although rare, you may be able to find a bank account with no cash deposit limits and unlimited transactions. The Capital One Spark Business Basic Checking is one account that offers unlimited free transactions. 

2. Compare account fees

As noted previously, fees are worth knowing about ahead of time. Reviewing all fees before choosing a bank or opening a new bank account is the best strategy, as doing so can save you time and money. You may be able to avoid some fees if you meet specific conditions, like meeting account balance minimums. But if you don't do the research, you may waste money on fees. When you're a business owner, every fee adds up and impacts your professional and personal finances. 

Here are a few fees or requirements to watch out for as you compare bank account options for your small business: 

• Account maintenance fees
• ATM fees 
• Transaction limit fees 
• Cash deposit fees 
• Wire transfer fees 

3. Don't ignore interest rates 

Before opening a savings account for your small business, check the annual percentage yield (APY). You could earn more interest by choosing a bank account with a higher APY. Setting aside money for quarterly self-employment estimated tax payments and future business expenses is an excellent way to stay on top of financial obligations, so having a savings account is a good idea. 

By automating the savings process, you can have money automatically transferred from your checking account to your savings account so the money is there when you need it. Keeping this money in an interest-earning account (like a high-yield savings account) can be a win because you'll earn extra money as your cash sits in the bank. What's not to love about that? 

4. Look for accounts with valuable benefits and tools 

It's also worthwhile to research what perks are available. Some bank accounts may have additional benefits that make your life easier. For example, free business financial planning tools or free checks could prove valuable. Any perks that make it easier for you to run your business more effectively can be a win.

Before opening a new bank account for your small business, thoroughly research your options. While not all bank accounts are created equal, it's possible to find one that meets your needs. If you want to learn more about the benefits of small business accounts, check out our list of the best business checking accounts.