Running your own business can be complicated – so why complicate things more by juggling multiple accounts at multiple institutions?

By working with a single financial partner, you can build rapport and trust, paving the way for superior service.

It’s true that personal and business accounts have different needs and goals. But these needs can often be met by the same financial partner.

In this article, we’ll highlight some of the efficiencies and cost savings that can come with developing personal and business banking relationships under one roof.

Separating Personal and Business Banking

As an entrepreneur, keeping your personal and business finances separate is essential. Not only does this streamline bookkeeping and tax preparation, but it maintains the integrity of your LLC or corporation as a distinct legal entity. If you commingle funds, it’s much easier for creditors or plaintiffs to “pierce the corporate veil” and go after your personal assets in the event of a debt default or legal judgment.

Additionally, business accounts frequently offer specialized tools and resources that aren’t available on the personal side. These may include higher transaction limits, merchant and payroll services, remote deposit capture, cash management solutions, and advanced reporting.

4 Key Benefits of One-Stop Banking

You need separate personal and business bank accounts – but that doesn’t mean you need separate banks. In fact, working with a single financial institution in your community offers several advantages. Here are four ways this practice could save you time and money:

1. Greater convenience: Whether you prefer to bank in person, online, or some of both, using a single financial institution can simplify your daily life. You can save on gas, and you may be able to utilize a unified digital and mobile banking platform to see all of your account balances and activity in one place. For “solopreneurs” who file one tax return with a Schedule C, tax time is less of a hassle if your year-end account statements are consolidated.
2. Enhanced relationships: By working with a single financial partner, you can build rapport and trust, paving the way for superior service. When bankers and lenders can get to know you personally and gain a more complete understanding of your financial picture and goals, they can offer more individualized solutions. Plus, you might become eligible for special “relationship banking” perks and products.
3. Streamlined approvals: Consolidating your banking and borrowing under one roof can optimize the loan process. Whether you’re applying for a personal or business loan, lenders can more easily determine your creditworthiness with direct access to your combined transaction history and assets. You may also be able to access more favorable rates and terms because of your more established relationship.
4. Swifter transfers: Moving funds between your business and personal accounts is a snap when you bank with one financial institution. While interbank transactions often come with delays and fees, intrabank transactions are usually rapid and free. Most online banking platforms make it easy to set up automatic transfers and direct-deposited paychecks, issue one-off reimbursements, and keep track of these transactions for bookkeeping and tax purposes.

What About Deposit Insurance?

You might have heard that the federal government insures deposits up to $250,000 “per depositor, per institution, per ownership category.” Sometimes, this has caused confusion for holders of multiple accounts. It’s important to know that a legal business entity (an LLC or corporation – but not a sole proprietorship) can be considered a separate depositor. Additionally, on the personal side, single, joint, and retirement accounts are normally covered separately.

For example, suppose you had:

• $250,000 in a single checking, savings, or other standard deposit account
• $250,000 in a joint checking, savings, or other standard deposit account
• $250,000 in deposits within an individual retirement arrangement (IRA)
• $250,000 in a business checking, savings, or other standard deposit account (under your official company name)

In this case, you would enjoy a full $1 million in deposit insurance coverage.

Let’s Work Together

For more information on making the most of your personal and business finances, consult your financial institution.