Credit Union Business Accounts: Fees, Rates, & Other Considerations

A credit union business accounts, business loans, and business services such as counseling on how to build your firm are all available. Credit unions, on the other hand, are not the same as banks.

In the United States, credit unions have over 100 million members. They offer many of the same financial products to businesses as traditional banks.

If there are facilities near you and you qualify, a credit union may be an excellent option for a business bank account. When compared to banks, these nonprofit, membership-based financial institutions frequently receive high marks for customer satisfaction.

However, to find a good overall fit, compare credit union business accounts with those at the best banks for small businesses. The correct business account will eventually provide the advantages you desire, such as high-interest rates or quick ATM access.

The following are the top credit unions for business accounts. If none of these options are available to you, look for credit unions in your area.

What Is a Credit Union Business Account?

To handle its finances, a company requires a system. Business accounts are used to keep track of the cash balance, money owed to the business, money owed to creditors, and employee payments. The number of accounts required by a firm will vary, but business accounts are required by all businesses.

5 Types of Credit Union Business Accounts

Checking Account

The business checking account is the foundation of a company. Payroll is deducted from this account, bills are paid, and sales are deposited. This account is also typically the first point of contact between a business and a bank. Proper account management can help to build a relationship that will be useful if the company requires money for expansion or a line of credit.

Accounts Payable

Accounts payable are the accounts that the company owes to its debtors. Mortgages, auto notes, and lines of credit granted to the business by other businesses are examples of this sort of account. This account differs from usual company costs in that it is long-term or revolving. Payments on these accounts are usually made from the company’s checking account.

Merchant Accounts

Businesses that accept credit cards will require a merchant account for credit card payments. Merchant accounts can also accept online payments made with a credit card or PayPal. A merchant account enables the company to accept all kinds of payment, which is an appealing and handy service for customers.

Accounts are opened with the help of a bank and a third-party processor. A merchant account will be especially beneficial to a company with an internet presence.

Receivable Accounts

Receivable accounts are the inverse of payable accounts; they indicate money owing to the company by other companies. For example, if a company gives credit to its clients, the money due to the company is referred to as a receivable. Payments on receivables are paid into the business’ checking account rather than credited to this account. This, like the payable account, is an informational account.

Payroll Account

When a company employs employees, money is transferred from the business checking account to the payroll account. Using separate accounts to pay staff allows for simpler tracking of amounts for general accounting and tax purposes. Not all businesses employ a payroll account; instead, the total amount of payroll is deducted from the business account.

Best credit unions for business accounts

In the US, there are lots of credit unions. Do credit unions, however, benefit businesses? Not all credit unions provide goods and services for businesses. It’s worthwhile to investigate the offerings of the neighborhood credit unions in your area.

Here are a few credit unions that provide their members with business items to get you started:

What to consider when choosing a credit union business account

A business account with a credit union might provide benefits including personalized service and cheaper transaction costs. There are some drawbacks to take into account, though.

You must carefully consider how you intend to use your account and whether the credit union can meet all of your requirements.

You may locate the account that’s right for you by doing some research and looking at a variety of accounts from banks, credit unions, and alternative suppliers, like the Wise Business account.

The following are some of the most crucial details you should be aware of regarding credit unions:

Fees

Every bank offers a unique set of features and pricing structures. In general, fees and minimum balance requirements for business accounts are greater than those for personal accounts.

Sign-up incentives

Banks occasionally provide incentives for opening business accounts with them. A bank might provide $300 as an illustration if you create an account and keep a specific minimum balance. These opportunities can be a terrific way to generate some additional money, but keep in mind that any bonuses are taxable. The following tax season, don’t be shocked if you receive a 1099 for the bonus.

Features

When comparing banks, pay close attention to which account features you absolutely must have. Do you, for instance, require a business bank account with in-depth analytics? Do you want a mobile app that enables digital check deposits? Are corporate debit cards necessary? Would getting notifications when your balance is getting close to your minimum balance be useful?

Account maintenance requirements

There are many requirements for business bank accounts that you must fulfill; if you don’t, you could be charged fees. For instance, it’s typical for banks to demand that you keep a minimum balance, however, the exact amount varies from bank to bank and may be a daily or monthly minimum.

How to open a Credit Union business account

With the exception of sole proprietorships, opening a business bank account is the same procedure as doing so for a personal savings or checking account.

Bring your Social Security card rather than your EIN if you’re a lone owner. The business license, DBA certificate, and personal identification documents are still required for sole proprietors.

Business Bank Account Checklist: Documents You’ll Need

Find out what forms of identification and permits you must present when opening a business bank account.

• Your articles of incorporation, employer identity number, and personal identification documents are required in order to open a business bank account.
• You can open a checking and savings account for your business.
• You need a business bank account to separate your personal and corporate finances.
• The goal of this article is to inform small business owners about the requirements for creating a business bank account.

Is it better to apply in person or online?

Some banks do not allow you to open a business account online, either to reduce the risk of identity theft or because certain businesses require it. Banks that do allow you to apply for a business bank account online may take longer to review your paperwork and set up your account than if you applied in person.

If the bank you chose has both application choices, you must choose which option (and trade-off) is preferable: the ease of applying online but having to wait longer for your account to be set up, or applying in person and having your account set up the same day.

READ ALSO:

• Can Credit Unions Lose Your Money? Understanding The Risks
• What Credit Union Does Discover Use? The Inside Scoop
• Credit Union Services (Membership Requirements, And Vs. Banks) 
• How To Open A Credit Union Account: A Step-By-Step Guide

How to choose a credit union for your business accounts

1. Can you join? Because credit unions are membership-based organizations, you must be eligible to bank with one. Some credit unions have very lax conditions, like making a small payment to a specified charity. Many others, however, restrict their eligibility pool to those who live in a specific area, work for a specific employer, or are related to someone who meets those criteria.

2. How do you bank? Even if you don’t join your local credit union, you’ll want convenient access to your money. Check to see if the credit union participates in ATM or branch-sharing networks with nearby sites and has an app with services such as e-deposit and bill pay. Some credit unions have smaller footprints, including those on the internet.

3. How do its characteristics compare? Credit unions may offer better deposit rates and place a greater emphasis on customer care than regular banks. However, make certain that the benefits of a credit union’s specific business account stand out for you, especially if you choose an inconvenient provider. If you won’t be doing much banking in person, consider online business accounts, which may have reduced costs or better rates.

4. What other goods are there? Some business owners prefer to do all of their banking with a single financial institution. If that’s your objective, make sure the credit union you choose provides business solutions for both your current and future demands. For example, you will almost certainly require small-business finance at some point. By establishing a relationship with a credit union today, your prospects of obtaining a loan later may improve.

When should you open a Credit Union business account?

Before accepting the first payment for your company’s goods or services, it is best to open a business bank account. During the incorporation procedure, a business bank account is often opened. A bank account cannot be opened unless the business has a license to operate and an identifying tax number (for a sole proprietorship, this will be an employment identification number or a Social Security number).