How To Start A Business- Business Bank Accounts

What is the purpose of a business bank account?

The purpose of a business bank account is to keep business finances separate from personal finances, ensuring better financial management and legal protection. Key Benefits of a Business Bank Account:

• Financial Organization – Helps track business income and expenses more efficiently.
• Legal Protection – Provides liability protection by keeping personal and business funds separate.
• Professionalism – Makes your business look more credible and trustworthy to clients and vendors.
• Easier Tax Filing – Simplifies tax preparation by keeping clear records of business transactions.
• Access to Business Services – Enables access to business loans, credit lines, and merchant services (e.g., payment processing).
• Compliance with Regulations – Many legal structures (LLCs, corporations) are required to have a separate business account.

Most major banks offer services related to small business banking. Make sure to do your research and find the best bank, rates, and packages that suit your business needs. Here are some examples;

• TD Canada Trust https://www.td.com/ca/en/business-banking/small-business
• CIBC https://www.cibc.com/en/business/accounts.html
• Scotiabank https://www.scotiabank.com/ca/en/small-business.html
• BMO https://www.bmo.com/en-ca/main/business/
• RBC https://www.rbcroyalbank.com/business/index.html

Want to explore credit unions?

• Alterna Savings https://www.alterna.ca/en/business
• Kawartha Credit Union https://www.kawarthacu.com/business/banking/account-options

Bank vs. Credit Union

When choosing between a bank and a credit union for your small business, it’s important to understand their differences in services, fees, and benefits.

Banks offer a wide range of financial services (loans, credit lines, merchant services), have more branches and ATMs nationwide, advanced online banking and mobile apps, and can handle larger businesses with complex needs. But usually come with higher fees for accounts, transactions, and loans, stricter lending requirements (harder to get approved for loans), and less personalized customer service due to a high volume of clients.

Credit Unions usually have lower fees and better interest rates on loans and accounts, more personalized customer service with a community-focused approach, an easier loan approval, especially for small businesses with lower credit scores, and member-owned, meaning profits benefit members (lower costs, better rates). But usually have limited branch locations and ATM access, fewer business banking products compared to big banks, and may require membership eligibility (e.g., local residency, industry, or affiliations).

Choose a Bank If: You need advanced services, nationwide access, and large loan options.

Choose a Credit Union If: You want lower fees, easier loan approval, and more personalized experience.