Three Reasons Why Business Checking Accounts Require Such High Opening Deposits And How To Open One Anyway

Posted on

Starting a new business venture can be exciting. However, there are those moments when you feel as though you were defeated before you even get started. One of those moments is when you decide that you want to open a business checking account. That is a smart move on your part, as your business's money should never intermingle with your personal money. What makes opening a business checking account so challenging, though, is the typically high initial deposit amount. Brand-new entrepreneurial adventures rarely have the five, ten, or even twenty thousand dollars to open a business account, so why are these accounts such a challenge to open? Actually, there are some very good reasons why, but there are also ways to get an account open anyway. 

Reason #1: The Bank Expects That Businesses Will Need Considerable Cash Flow Through the Account

Banks expect that business accounts will have large sums of money flowing in and out of them all month, every month. That said, they want to be sure that your business has enough cash on hand in the account to handle your expenses without overdrawing the account. The bank does not want to fund your business through overdrafts of an account! They do, however, want to help your business grow with loans and financing, which helps keep your business account in the black.

Reason #2: The Bank Has to Pay for the Perks It Offers Its Business Customers

There is an old adage that states, "You have to give a little to get a little." When it comes to banks, that is very true. They want to offer business customers unlimited free checks printed at no cost, interest on the business account that is higher than the interest on personal accounts, and credit cards and loans with low interest rates to help business owners. They cannot do that if customers deposit little-to-no money when opening a business account. Hence, your big deposit turns into the perks offered and helps drive down the associated costs of banking in order to help you and your business grow. It is a mutually beneficial agreement. 

Reason #3: Banks Are Hoping That You Will Open a Business Loan with Them

If you do not have startup funding, you can always borrow it from a bank. Banks want to make it really convenient for you to borrow the money from them and automatically drop it into a business account with the same bank. You do not have to do that but that is typically what most banks are hoping for. Ergo, they set the business account opening deposit for the average amount of a typical business loan that they grant to people seeking startup funds. Additionally, by taking out a loan with them and opening an account with them, you bypass the requirement of the specified high amount because you borrowed the amount required from the bank itself. 

Getting business checking accounts can be intimidating, but it can benefit your business and the bank, making it a good idea to get an account.