{"id":7929,"date":"2022-02-23T10:00:58","date_gmt":"2022-02-23T10:00:58","guid":{"rendered":"https:\/\/www.sage.com\/en-ie\/blog\/?p=7929"},"modified":"2026-01-07T12:32:00","modified_gmt":"2026-01-07T12:32:00","slug":"business-bank-account-small-business","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ie\/blog\/business-bank-account-small-business\/","title":{"rendered":"Business bank account: Why small businesses should use one rather than a personal account"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tMoney Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tBusiness bank account: Why small businesses should use one rather than a personal account\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

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\n\t\t\t\n\t\t\t\t\"\"\t\t\t\tSabuhi Gard<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n

Many Irish high street banks offer business bank accounts. The same can be said of challenger banks such as N26.<\/p>\n\n\n\n

Banks usually charge startups and established small businesses<\/a> a monthly or annual fee for the service, although some offer a fee-free period for new customers.<\/p>\n\n\n\n

In this article, we discuss what a business bank account is, and highlight whether getting one is right for your business.<\/p>\n\n\n\n

We also discuss the benefits of using one for your business compared to using your personal bank account.<\/p>\n\n\n\n

Here\u2019s what we cover:<\/p>\n\n\n\n

What is a business bank account?<\/a><\/p>\n\n\n\n

How does a business account work?<\/a><\/p>\n\n\n\n

Can I use my personal bank account for my business?<\/a><\/p>\n\n\n\n

Benefits of using a business account<\/a><\/p>\n\n\n\n

How to choose the right account for your business<\/a><\/p>\n\n\n\n

What do you need to do to open a business bank account?<\/a><\/p>\n\n\n\n

Final thoughts on business bank accounts<\/a><\/p>\n\n\n\n

What is a business account?<\/h2>\n\n\n\n

A business account is a bank account used for your business transactions.<\/p>\n\n\n\n

It shouldn\u2019t be used for making personal finance transactions, such as paying your household utility bills or TV licence.<\/p>\n\n\n\n

With the business account, you can make deposits and withdrawals, use a debit card for purchases, and apply for an overdraft.<\/p>\n\n\n\n

Deepak Shukla, founder of Pearl Lemon PR<\/a>, believes it\u2019s important to separate your personal bank account from your business bank account if you\u2019re a small business owner.<\/p>\n\n\n\n

He says: \u201cThe most important part is that business owners are able to separate what they do in their business with what they do in their personal life from a financial perspective.<\/p>\n\n\n\n

\u201cWhen it comes to the end of year accounts and financial projections, you\u2019ll need to access the activity that demonstrates the progress of your business separate from the activities in your personal life.<\/p>\n\n\n\n

\u201cSo, it\u2019s difficult for someone to project how much profit they made in one year if they also have to separate all of their personal holidays, expenses and home utility bills.<\/p>\n\n\n\n

\u201cThose kinds of expenses shouldn\u2019t be mixed up with business expenses because it makes accounting easier and business projection clearer when there\u2019s a separate account dedicated to business transactions.\u201d<\/p>\n\n\n\n

How does a business account work?<\/h2>\n\n\n\n

The account works similar to a personal bank account but the main difference is that it deals with the cash flow generated from your business.<\/p>\n\n\n\n

It can be opened in the name of a business at any time, and with no monthly fees. You might also have access to 24\/7 customer support if you open with a challenger bank.<\/p>\n\n\n\n

By opening a business account, you can allow payments to be made and received in the name of the business.<\/p>\n\n\n\n

However, a big difference between a personal bank account and a business account is that most banks will charge you per business transaction.<\/p>\n\n\n\n

So you may have to pay a small fee every time you deposit cash, issue a cheque, set up direct debits and standing orders, or make a bank transfer.<\/p>\n\n\n\n

Can I use my personal bank account for my business?<\/h2>\n\n\n\n

Depending on the nature of your business and how easy going your bank is, you can use your personal bank account.<\/p>\n\n\n\n

Sole traders can use a personal current account for business transactions because Revenue treats their personal and business income as one.<\/p>\n\n\n\n

For example, if you have set up a copywriting business, rather than a retail business.<\/p>\n\n\n\n

However, most high street banks state in their terms and conditions that personal bank accounts can only be used for personal use and not for business.<\/p>\n\n\n\n

Benefits of using a business account<\/h2>\n\n\n\n

There are many benefits of using a business account.<\/p>\n\n\n\n

For example, you can keep track of what you are spending on your business, simplify tax returns and view deposits made in your business\u2019 name.<\/p>\n\n\n\n

You can appear more professional to customers and potential clients by allowing them to pay you in your business name rather than your personal name.<\/p>\n\n\n\n

You can also cash in cheques made out to the business and build up your credit history, so it\u2019s easier to apply for a business loan<\/a> or credit card.<\/p>\n\n\n\n

Some banks may offer business customers extra support, too \u2013 you can perhaps chat to their local relationship manager.<\/p>\n\n\n\n

How to choose the right account for your business<\/h2>\n\n\n\n

Choosing the right account for your business can be a minefield, as there is so much choice, from the traditional high street banks to newer challenger banks and business banking apps.<\/p>\n\n\n\n

In order to choose the right business account, you need to look closely at your business needs.<\/p>\n\n\n\n

Have you just started your company? What is the size of your business?<\/p>\n\n\n\n

Is your business more established? Are you a sole trader or running a limited company?<\/p>\n\n\n\n

Start by comparing the different bank accounts that are available to you.<\/p>\n\n\n\n

Look at whether the bank charges fees.<\/p>\n\n\n\n

Is there a period of free business banking that you can make the most of? Will you be charged a fee for opening an account?<\/p>\n\n\n\n

What\u2019s the monthly account fee? How much will it cost for the likes of making electronic or cash payments in and out of your account?<\/p>\n\n\n\n

There are also overdraft charges to consider too, both authorised and unauthorised.<\/p>\n\n\n\n

Banks can also charge when international transactions take place, for example for non-euro card transactions.<\/p>\n\n\n\n

Your best place to start when deciding what business bank account is right for you is to look at comparison websites, where your options are clearly laid out.<\/p>\n\n\n\n

What do you need to do to open a business bank account?<\/h2>\n\n\n\n

In order to open a business account, your chosen bank will need to carry out credit and security checks.<\/p>\n\n\n\n

You\u2019ll likely need some (if not all) of the following too:<\/p>\n\n\n\n