A commercial account is often a checking account that is utilized by a business or business owner that is separate from the personal checking accounts kept by the owner(s). A commercial account will often have higher fees associated with it than a personal account, but many banks provide a different arm of their institution to oversee commercial accounts which are sometimes referred to as business accounts. There are different services provided, such as payroll services and ways of paying your business taxes.

A commercial account can usually be set up at any of the same financial institutions where you may already do your personal banking. Examples of commercial banks include Bank of America, Wells Fargo, Citi Bank and Chase, all of which provide banking services for both personal and business use.

Advantages of Commercial Banking

You may be thinking that your business is still quite small and questioning the value of commercial banking. So, what are the advantages?

  1. Setting up direct deposit for your employees, often for free if your employees choose to bank at the same institution where your business account is housed.
  2. By establishing a business account and keeping the account in good standing, you may have an easier time obtaining a business loan, should you need one.
  3. Utilizing a commercial account can make the day-to-day accounting easier for a business.
  4. Often times, the bank will assign your business a designated individual who can assist you with your business’s banking needs.
  5. Your business may be able to save money by allowing the bank to take care of payroll and invoicing services.
  6. In addition to direct deposit, many larger commercial banks may provide retirement services to your employees.
  7. Commercial banks are generally large institutions with branches all over the place, making it easier for things like deposits and withdraws for both you and your employees.
  8. Many provide online banking services, which can be of benefit for both you and those employees who bank at the same institution.

Additionally, for tax purposes, it is greatly advantageous for a business owner to allow their commercial bank to oversee the payment of state and federal taxes. This can generally only be done if a commercial account and personal account are two separate entities. Even if your business is still quite small, chances are, you will still have to be paying taxes.


While there are certainly any number of advantages to commercial banking and having commercial accounts for your business, there can be some downsides, as well. Some of the disadvantages include:

  1. There are often additional fees included with commercial accounts that do not exist with personal accounts.
  2. While payroll services may be provided by the bank, there may be limits as to the number of employees your business can have on payroll to utilize those services.
  3. If you become dissatisfied with your financial institution and wish to move your accounts to another bank, it can sometimes be difficult to do so.
  4. You may be charged for the services provided by a commercial account, even if you are not fully utilizing them.
  5. If your business is one in which you receive a lot of checks, your bank may place restrictions on the number of checks they will process for free, causing you to then pay for processing any checks beyond that.
  6. Different banks may provide different products and services, and at different costs. Being able to properly compare and contrast among different financial institutions can sometimes be difficult, making it tricky to best determine the specific needs of your business.

As you can see, while there certainly are some downsides to a commercial account, the advantages often still outweigh the disadvantages, so it is probably still in the best interest of your business to establish a commercial account. With that said, if your biggest concern is being able to properly pay your taxes, and you are not currently concerned with issues of payroll or retirement accounts, then you may be fine with utilizing the services of a good accountant who specializes in business accounting.

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