How Many Business Bank Accounts Can You Have?

Ever wondered how many business bank accounts you can have or need? As long as you qualify, you can open as many as you want. Having more than one account can make a lot of sense, depending on your business goals.

In this article, we'll explore when it’s a good idea to open multiple accounts and how Wise Business might just be the ideal solution for your international business needs. Ready to dive in?

Are you looking for an account that helps you save while sending and receiving payments?

Learn more about the
Wise Business account >>

Trustpilot: 4.3/5 average rating - Excellent¹
Free opening for US business accounts
No minimum balance required and no monthly fees

Table of Contents
When to open multiple business accounts What to watch for with multiple business accounts How to set up multiple business accounts

When to open multiple business accounts

Let’s first talk about when it makes sense to take that leap and open multiple business accounts. The decision is all about timing and recognizing when your business could truly benefit from having separate accounts for certain things.

We'll break down some key factors and scenarios that might mean it’s time to open multiple accounts, including separating expenses and stretching your business earnings.

You want to separate certain expenses

One of the main reasons for opening multiple business accounts is wanting to separate certain expenses. Businesses often need to keep track of different revenue streams, operational costs, or project expenses. In these instances, maintaining separate accounts gives you a clear and organized framework, making sure every penny is accounted for.

A recent study by Intuit found that the majority of small businesses worldwide struggle with cash flow (61%).² So, having dedicated business accounts won’t just make it easier to assess and allocate funds, but it could also be a key component in keeping your business afloat.

For instance, consider you have a large-scale project that requires tracking a wide range of expenses - supplier payments, employee bonuses, and investment returns, to name a few. Merging these with your day-to-day operational costs can quickly throw the financial side of your business into chaos. Separating these expenses into individual accounts will help create a more efficient, transparent, and hassle-free management approach that saves both time and resources.

You’re looking for an international account

If you’re exploring the global market, finding an international business account should be at the top of your priority list. Navigating foreign transactions and exchange rates can be tricky, but that's where accounts like Wise Business are useful, making international business ventures that much easier.

Wise offers an ideal solution for businesses with international operations. The platform is specifically designed to minimize fees on cross-border transactions and provide mid-market exchange rates – significantly reducing overhead expenses. Wise's fees are much cheaper than those charged by typical banks, allowing your business to hold onto more of your earnings.

With Wise Business, you can send and receive payments in many different currencies, hold balances in 40+ currencies, and even get local banking details in 9+ currencies. Keeping a separate international business account from your domestic one can streamline tracking and monitoring of funds in each place – and Wise also offers a personal account.

You want to earn interest

To aid your financial growth and stability, you shouldn’t overlook the power of earning interest on your business funds. While it might seem like a minor detail, opening a business account that offers an attractive interest rate can make a huge impact on your company's bottom line over time.

By exploring options and diversifying your accounts, you can find competitive rates that serve your business's financial ambitions. Investopedia reported that the top rate on savings accounts available as of June 2023 stood at 5.12% annual percentage yield – more than 12 times the FDIC’s national average for savings accounts.³ That's where opening multiple business accounts, particularly high-yield savings or money market accounts, comes into play.

When you have a dedicated account for earning interest, you effectively turn cash just sitting in an account into a valuable, income-generating asset. This interest income not only bolsters your reserves but can potentially be reinvested in growth initiatives or even cover unexpected expenses.

You want to collect savings

In the dynamic and unpredictable world of business, having a buffer of savings can be a lifesaver when dealing with unforeseen challenges or preparing for future growth. Opening a separate account specifically for collecting savings not only promotes financial security but also makes resource allocation smoother.

There’s a lot of value in building a dedicated account for your business savings. Think of it as a safety net for fighting adversity or seizing opportunity. Imagine a scenario where the unexpected occurs – a global economic downturn, a sudden opportunity to expand, or skyrocketing costs of essential materials – that separate savings account will come to your rescue and make sure your business stays thriving.

With multiple business accounts in play, you create a systematic and disciplined approach to setting aside a portion of your profits.

What to watch for with multiple business accounts

While there are many enticing benefits of having multiple business accounts in your repertoire, we also need to acknowledge that it's not all fun and games. As with any strategic move, there are some potential pitfalls to look out for when juggling multiple accounts.

Here are some key areas of concern to keep in mind when navigating multiple business accounts.

Controls/Alerts

With several accounts at your fingertips, monitoring transactional activity, account balances, and potential fraudulent behavior might prove to be more of a challenge. In fact, according to the Association of Certified Fraud Examiners (ACFE), small businesses experience the highest median fraud loss of over $150,000 per year - a blaring reminder that businesses can’t let their guard down.⁴

While multiple accounts can work wonders for overall financial strategy, the complexity of managing each account can expose businesses to risks if we’re not careful. Missing crucial alerts, going over transaction limits, or not setting up proper access controls can cause headaches and even lead to financial losses.

So, what’s the solution? Consider using banking platforms or aggregation tools that give you a bird’s-eye view of all your accounts, so you can easily handle all your controls and alerts from a single dashboard. This way, you’ll have a clear picture of your financial activity and can stay up-to-date with account-specific alerts.

Report and Taxes

Another thing you need to pay close attention to is reports and taxes, as handling various accounts can make these tasks more challenging as well. In fact, 40% of small business owners cited bookkeeping and taxes as the worst aspect of owning a business.⁵

A practical solution to address these challenges is using accounting software integrations with your bank accounts. By doing so, you get to streamline report generation, expense categorization, and tax document preparation. Integrating your business accounts with compatible accounting software helps maintain up-to-date records and simplifies the tax filing process.

With the right accounting software integrations in place, managing reports and taxes across multiple business accounts becomes a lot more efficient and organized.

How to set up multiple business accounts

With a well-planned approach, the process of setting up multiple accounts can be smooth, efficient, and highly advantageous for your business. In this section, we'll guide you through the key steps to establish multiple accounts.

1. Pin down your purpose and objectives

Understand the purpose each account serves and the objectives you hope to achieve. Are you looking to separate your operational expenses from project costs? Do you need an account for international transactions or to earn interest on idle funds? Figuring this out will make it easier to pick the right business accounts for your needs.

2. Research suitable bank accounts

Take the time to thoroughly research suitable bank accounts and financial institutions. Consider their features, fees, interest rates, and additional services. Comparing these factors will help you find the perfect banking solutions that fit your needs. Maybe you're on the hunt for high-yield savings accounts to maximize returns on idle funds or perhaps seeking accounts that offer robust expense tracking and management tools. Or, if a significant portion of your transactions are international, look for accounts that specialize in international business, such as Wise Business.

3. Understand account opening requirements and regulations

Each bank or institution will have their own requirements and regulations, such as providing legal documentation, minimum deposit amounts, or maintaining minimum balances. You’ll also want to ensure your business complies with relevant regulations and industry-specific guidelines to avoid any complications or penalties.

And if you haven’t already, register for an employer identification number (EIN) from the IRS. This nine-digit number EIN is something you’ll need handy for all your business-related transactions and documentation.

4. Open the accounts and assign responsibility

Wise Business - the international business account that helps you save

Now you’re ready to open your chosen accounts. If you’re not a sole proprietor, then consider assigning responsibility for overseeing and managing each account to a trusted member of your team. This way, every account is adequately monitored, proper controls and alerts are in place, and financial activities are carried out responsibly.

And speaking of making things easier, the Wise Business account is the perfect solution for anyone looking to simplify their business finances. It's important to remember that Wise is not a bank, but a smart online alternative to traditional business bank accounts.

With the Wise Business account, you can send and receive payments from anywhere in the world, in multiple currencies, and at low cost with the mid-market rate.

You'll get 19x cheaper costs than when sending money on PayPal.

Plus, you'll have access to tools to help you manage your cash flow, pay bills, and more.

1. Account Software Integration: QuickBooks, Xero, Sage, and Wave
2. Batch Payment Tools: Pay up to 1,000 invoice in one instance
3. The Most International Account: Hold 40+ currencies at once
4. Transparency: Wise Business is trying to get rid of all your business account fees with no monthly fees or minimum balance requirements.

Are you looking for an account that helps you save while sending and receiving payments?

Learn more about the
Wise Business account >>

Trustpilot: 4.3/5 average rating - Excellent¹
Free opening for US business accounts
No minimum balance required and no monthly fees

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Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks.

Sources:

1. https://www.trustpilot.com/review/wise.com
2. https://www.intuit.com/company/press-room/press-releases/2019/quickbooks-study-cash-flow-woes-mean-a-third-of-small-businesses-can-t-make-payroll-pay-bills/
3. https://www.investopedia.com/best-high-yield-savings-accounts-4770633
4. https://uhy-us.com/insights/2022/november/small-businesses-prove-perfect-environment-for-financial-fraud
5. https://www.prnewswire.com/news-releases/new-infographic-the-burden-of-small-business-accounting-taxes-and-payroll-300026479.html