This article is a paid partnership with Midland States Bank. The content was provided by the advertiser and is published for informational purposes only.
There’s a fine line between personal and professional finances for small-business owners, leading to a lot of confusion and stress. This makes it even more important to partner with a bank that can manage both account types for greater convenience and peace of mind. Finding the right financial institution requires careful consideration of your individual circumstances and needs.
The Foundational Step — Separating Personal and Business Finances
Imagine you’re paying for groceries and accidentally grab the credit card you use for your business. It’s likely not your first time doing so, but the failure to split personal and business finances can make bookkeeping harder than it needs to be.
More importantly, it puts your personal assets at stake if your company comes across legal problems.
Opening a designated business account and tracking company expenses in a separate system clarifies accounting and streamlines tax preparation, enabling maximum deductions. It also reduces liability and improves your reputation and professionalism among clients and investors.
What to Consider When Choosing a Bank
It’s important to find a financial institution that supports your personal and business goals. To make sure there’s a good fit, determine whether each contender gives you the following solutions.
Account Features and Services
Look beyond basic checking and savings accounts and find a bank that helps you simplify operations and grow. This should include merchant services for receiving customer payments, incorporated payroll processing, and easy access to business lines and lines of credit as your business grows.
For personal banking, the right institution will help you manage individual wealth with high-yield savings and rewards. It should also have competitive mortgage and auto loans.
Fees and Interest Rates
Evaluate the fee schedule for any account you’re thinking about. Banks will often waive monthly maintenance fees when you maintain a certain balance.
You must also ask about transaction limits, out-of-network ATM charges and wire transfer fees. Competitive interest rates are equally important to achieve maximum profitability.
Customer Service and Support
According to a 2024 study, 50% of small-business owners say a lack of financial literacy leads to fiscal challenges. Always opt for a bank with strong customer service for help when you need it the most.
Entrepreneurs should also make sure there are available banking advisers with in-depth knowledge of business banking. They must also have tailored advice and remain a designated contact to meet your unique financial needs and goals.
Digital Banking and Technology
User-friendly digital banking platforms are nonnegotiable for busy business owners. A survey by Morning Consult on behalf of the American Bankers Association found that 54% of customers prefer managing their bank accounts from smartphone apps and other mobile devices.
Your financial institution should have a seamless mobile and online banking experience to save time on depositing checks and paying bills. The ability to incorporate bank feeds with bookkeeping software is also important if you run a small business. The automation feature streamlines financial processing, reducing risks and providing a real-time overview of your financial well-being.
Choosing Between One Bank or Two
Small-business owners must decide whether to use one or two financial institutions to manage their personal and professional accounts. Although safeguarding your assets at one bank has benefits, it also has downsides.
Pros of Using the Same Bank
Using the same bank for personal and business finances is convenient for busy entrepreneurs. You can manage both accounts using one mobile app and login and receive monthly statements, easily transferring funds between the two and receiving a more holistic view of the entire financial picture in one place.
Consolidating and using just one bank saves you time and effort by requiring you to build a relationship with one set of bankers and streamline your financial obligations, so you can run your business and live your life more efficiently.
There is also the possibility of qualifying for lower fees and relationship-based perks, including a higher number of free transactions, complimentary wire transfers and possible loan origination fee discounts.
Cons of Using the Same Bank
Among the problems of using the same bank is a lack of specialization. Although it may have great personal finance solutions, its business merchant services may not be as good. By choosing just one institution, you might have to accept quality in one category but miss out on specialized features in another.
Placing both of your financial accounts at the same bank might also spell trouble if the institution has technical issues. For instance, if its digital banking platform goes down, you might not be able to access your funds. A security freeze or transaction dispute on one account might also impact the other.
Additionally, although a single bank allows for convenient money transfers, the ease in borrowing from your business account for personal expenses might be too tempting. This habit can lead to chaotic bookkeeping and poor performance metrics, complicating tax season.
How Do You Choose the Right Bank for Personal and Business Accounts?
The first step in choosing the right bank for personal and business accounts is to determine your financial situation and requirements, and compare them with each institution’s products and services. It may be helpful to list the essential features you’re looking for and then create a short list of contenders.
Always analyze the fine print to understand a bank’s fee structures and minimum balance requirements. You should also consider whether it can scale with your company over time.
Ask fellow business owners for recommendations as you begin your search. Hearing their firsthand experiences could provide insight for making sound business and personal financial decisions.
The Solution for Seamless Integration — Midland States Bank
Midland States Bank excels in personal and business banking, catering to the financial goals of entrepreneurs. Individual customers can use its diverse checking and savings accounts, including the “Totally Free Checking” option, which has no minimum balance or monthly service charge and offers free digital banking, bill pay, and paper or e-statements.
There are also several financing solutions available for mortgages, auto loans and home equity lines of credit, along with wealth management advisory services for long-term wealth management planning.
Business owners can also tap into specialized products, such as the “Totally Free Business Checking” with 500 free monthly transactions and up to $10,000 in currency deposited each month at no charge. There is also an extensive suite of commercial banking services, from loans to treasury management.
If you’re wondering how to choose the right bank for personal and business accounts, choose a partner that can handle both everyday finances and long-term growth potential for individuals and companies. Midland positions itself as a versatile contender for a range of investment needs.
Banking On Your Future With the Right Financial Partner
The right financial partner will set you up for success in your personal and professional wealth. It is not merely a logistical choice but a strategic one that should align with your monetary ambitions. By practicing due diligence and assessing your needs, you can make a powerful investment decision for your future, building a foundation of stability and support to move forward with confidence.
Every business owner’s situation is different, so it’s important to compare multiple institutions and account options before deciding.
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