How Does Business Banking Differ From Consumer Banking?


Quick Answer

Some differences between business banking and consumer banking include tax benefits, legal protection and business lines of credit, according to LegalZoom.com. Many business checking accounts have separate lines of credit and credit cards for business purposes.

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Full Answer

People who run a business can set up a corporation or a limited liability corporation and get a business account under the organization, notes LegalZoom.com. This allows the individual to have more legal protection, where only business assets are affected. Money in the person's regular consumer checking account is protected and not touched due to business liabilities. The separation of business and consumer accounts for sole proprietors and business owners allows the individual to better track taxes and income.

Credit and debit card processing services and software are other differences between business and consumer checking accounts, according to LegalZoom.com. Some banks only offer these services with business accounts.

Having a business account also allows business owners to give permissions to employees to access the account, says Bankrate. This is good for accountants and bookkeepers who need to access the checking account for payroll or to pay bills. This is not typically an option with consumer or personal checking accounts. The banking fees may also be different with a business account as compared to a consumer account at the same bank.

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