Opening Multiple Business Accounts For Your Business?

When creating a new business, one of the questions that comes to mind of every business owner is, “How Many Bank Account Should I Create For My Business?”. Before making a conclusion on this topic, you need to consider some of the merits and demerits of having multiple accounts. Let’s first consider the advantages;

Disadvantages Of Having Multiple Business Accounts For Your Business

Below are some of the disadvantages of having multiple business accounts for your business:

— Difficulty In Remembering Passwords

If you have multiple bank accounts, you will need to keep separate profile forms and passwords for each bank you open. Consider an example in which these banks require you to update your password every six months for security reasons, and you have to do so for five accounts. Isn’t that strenuous? What happens if you forget any of the passwords to these accounts by mistake?  These questions serve as an excellent reminder of disadvantageous it is to create multiple bank accounts.

                                                

— High Charges

Do you know that each savings account you open comes with its charges? This means you’ll have to pay a few small fees for things like ATM Card, SMS alerts, and ATM use, among others. Furthermore, at banks like UBA and other commercial banks, the service costs for maintenance could be as much as five hundred naira. As a result, having multiple bank accounts will result in higher charges.

 

— May End Of Being Dormant

You may have inactive savings account if you are unable to maintain track of your finances. Unscrupulous persons may detect that your account is dormant and try to take advantage of it, especially if the savings account has a balance. Inactive accounts also yield low-interest rates.

 

— Requires More Time To Manage

One of the main disadvantages of having multiple bank accounts is also that you must keep records of all of them. You don’t want to risk having insufficient funds in one of your accounts when a bill arrives because overdraft fees can add up quickly. To keep your accounts flush, you may need to constantly make transfers between them. While it’s not impossible to manage many accounts, it may need a little more work than creating a single account.

                                          

Advantages Of Having Multiple Business Accounts For Your Business

— Helps You Become More Organized

Every bank account is not the same. Savings accounts maximize the amount of income you earn when you save money, whilst transaction accounts provide quick and easy access to your earnings. There are offset accounts for controlling mortgage interest, as well as a variety of additional solutions to fit your specific financial needs.

 

— Give You The Opportunity To Enjoy Rewards

You may be eligible for prizes and rewards when you register or use multiple bank accounts, depending on who you bank with and whose accounts you’re interested in. Your choice of bank payments and financial products can provide significant incentives on top of their typical value, whether it’s a cheap starting charge or a unique interest rate. Some banks also provide package deals that give unique benefits when you take up numerous financial products, such as bank accounts, allowing you to take advantage of waived fees, additional interest, or other special offers.

                                

— Gives You An Advantage When Applying For A Business Loan

As your company expands, you may require additional funding to fill cash flow shortages or pursue expansion opportunities. Maintaining multiple business bank accounts successfully might help you develop a track record of responsible financial management. When you apply for a business loan, most loan companies require you to provide thorough financial records, both corporate and personal. If you don’t

have a specialized business bank account, many loan companies won’t even accept you for a loan. If you have a track record of good money management, you may have a higher chance of convincing the lender of your creditworthiness.

 
When having multiple accounts, it will not enhance you from accessing loans because you will be running on multiple accounts, and thereby maintaining one major account so as to have availability in accessing loans will be very difficult because there are some banks that before you can have access to loan you will have to run the account for 6 months simultaneously or 4 months as the case may be, so if multiple accounts are been acquired by the user or customer, how will he or she have the access to get a loan?
 

My advice is as a business person whose aim is to acquire a loan from the bank, having multiple accounts for you is not an option until your business has gone so wide that you can now choose to have multiple accounts for security reasons.

That’s all we can cover on this topic.

Do you have any suggestions or additions?

Feel free to use the comment box below.

 

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