Accounting & Finance

The Best Business Bank Accounts for Sole Proprietorships

Are you a sole proprietor in need of a business bank account? Increasing the financial structure and strength of your business is the first step toward success. Throughout this guide, we'll discuss why having the right banking products is essential for sole proprietors, how to select the best one suited to your needs, and what features come with most accounts. Let's start by understanding why finding an ideal bank account should be at the forefront of every self-employed professional's list when it comes to starting their new venture.

What is a Sole Proprietorship, and Do You Need a Separate Business Bank Account?

A sole proprietorship is a business entity that is owned and operated by a single individual, with no legal distinction between the owner and the business. Despite its simplicity, a common question arises - do you need a separate business bank account? The answer is no, and it is not legally required but highly recommended.

Having a dedicated bank account for your business not only helps in better financial management but also provides a clear separation between your personal and business finances. This separation proves to be truly beneficial in the long run, as it ensures accurate financial records, easy tax filing, and a professional image for your business. 

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3 Benefits of Having a Business Bank Account

Outside of the main reason of separating your personal and business financials, having a business bank account can support your growth in a few ways. 

1. Makes Bookkeeping Easier

Another benefit of having a separate bank account for your business is that it can make bookkeeping easier. When all of your business expenses are coming out of one account, it can be simpler to track and categorize them for bookkeeping purposes. This can save you time and money when it comes time to do your taxes or prepare financial statements for your business.

2. Gives You Access to Business Banking Services

When you have a separate bank account for your business, you may also have access to additional banking services that can be beneficial for your business. For example, many banks offer merchant services that allow businesses to accept credit card payments from customers. Additionally, some banks offer special financing options for businesses, such as lines of credit or small business loans.

3. Better Understand the Financial Health of Your Business

When you have your personal and business finances separated, you can get a clear picture of how your business is performing. With a clear overview of income, expenses, and cash flow, you can make better-informed decisions to grow your business and protect your personal assets.

Related Reading: 5 Financial Accounts to Help Manage Your Finances 

Best Business Bank Accounts for Sole Proprietorships

As a sole proprietor, you'll want a business bank account that makes running your business easier and saves you time. We've done the searching for you and found two of the best business bank accounts for sole proprietorships: Lili and NorthOne. Let's take a look at what they both have to offer.

Lili Business Bank Account

With Lili Pro, users can access a business bank account with a monthly paid subscription for $9 per month that comes with a tax optimizer feature and their own accounting software. With the Lili Pro plan, you also get fee-free overdraft of up to $200 and can earn interest on your savings accounts. With no minimum balance and no hidden fees, Lili makes business banking easy and transparent.

Lili also offers a free business checking account with access to a business debit card, fee-free ATMs, and quarterly reports.

Lili Pro Features:

  • Saving account that accrues interest
  • Fee-free overdraft
  • Make mobile deposits
  • Cashback rewards are select merchants
  • Customer support via email or phone
  • Integrate your third-party apps like Quickbooks, Venmo, Shopify, and more to streamline your accounting
  • Categorize your expenses on the go and in real-time
  • Set up automatic savings
  • Get automatic quarterly and yearly reports

Ready to start your business banking journey with Lili? Get started today with no credit check, no minimum deposits, and no paperwork.

NorthOne Business Bank Account

For $10 a month, NorthOne provides business owners with an online business check account with no additional fees except for wire transfers. NorthOne is proudly made for American small businesses, startups, and freelancers. They eliminate the time and hassle of business banking. No branches. No waiting on hold. Just simply designed, lightning-fast, and delightfully personal service.

NorthOne Features:

  • Send ACH or wire payments and pay invoices
  • Set up NorthOne Envelopes to budget money for rent, taxes, payroll, and other big expenses
  • Easily make mobile deposits
  • Live chat, phone, and email customer support
  • Connect your accounting software and keep your books tidy
  • Integrate your NorthOne account with your other business apps
  • No additional fees outside of your monthly account fee, and $15 for every wire transfer sent or received

Does NorthOne sound like the right account for you? Create your NorthOne business bank account now with no commitments and no minimum balance - get one month free when you join today.

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Choosing the Right Business Bank Account for Your Sole Proprietorship

Choosing the right business bank account is an important task! With a bit of research and consideration, you can easily find the perfect fit for your business. Firstly, think about the features you require. Do you need the ability to have separate savings accounts? Maybe you need a high cash deposit limit? Whatever it may be, make sure the bank you choose ticks all the boxes.

Next, consider the costs associated with the account. Are there monthly fees? Will there be transaction fees or ATM fees? Be sure to compare different banks to find the best value for your business. It's also essential to check if they offer mobile deposits, making it more convenient to conduct your business banking on the go from anywhere!

Finally, decide if you need a physical location to visit. Some businesses have the need to deposit cash at a branch in person, so make sure to choose a bank that has a convenient location for you. Remember, taking the time to consider and compare different options will only benefit you in the long run.