Can I Have Two Business Bank Accounts?

It’s possible—and often beneficial—to have two or more business bank accounts for your small business.

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Can you have two business bank accounts for your small business? And if so, is it a smart decision? Here, we’ll explore the pros and cons of opening more than one business bank account. Once you understand the benefits and drawbacks, you’ll be better equipped to make smart financial decisions for your company.

Table of contents

Can you have two business bank accounts?

Yes, you can have two business bank accounts for your small business. In fact, you can have as many business bank accounts as your business needs require (as long as multiple banks approve your application, of course). There are no laws prohibiting small-business owners from having more than one bank account, and many business owners find it beneficial to have separate accounts for different expenses.

How many business bank accounts should a small business have?

Every small-business owner should have at least one business bank account to simplify taxes and separate business finances from personal finances. Beyond that, there aren’t any hard and fast rules.

Ultimately, it may come down to your own preferences or the size and complexity of your business finances. A brand-new small business or side gig may not require multiple business accounts, but a larger, high-volume business may benefit from having more than one account.

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The benefits of having multiple business bank accounts

Despite the many benefits of safety stock, this inventory management strategy comes with a few challenges small-business owners should be aware of too.

Here are a few concerns business owners should consider before ordering safety stock:

  • Excess safety stock. If a company orders too much safety stock, it could end up as obsolete stock that is difficult to get rid of.
  • Limited cash flow. Investing in safety stock requires cash—meaning small-business owners may not have as much money to put toward new products of cycle stock.
  • Increased storage costs. There’s no way around it: Keeping stock on hand costs money. Business owners will need to consider the cost of storage and warehouse staffing before purchasing safety stock.
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The drawbacks of having multiple business bank accounts

Despite the perks of having multiple business bank accounts, there are a few downsides to be aware of. Weigh these drawbacks against the benefits before you decide what’s best for your business.

  • Increased responsibility—If you already struggle with money management, having multiple accounts to keep track of could prove challenging. You’ll need to check multiple balances, be aware of bank fees, and avoid overdrafting on more than one account.
  • Complicates cash flow—When your money is spread across multiple bank accounts, you’ll need to take extra steps to track and manage cash flow. Sometimes, you may want to transfer funds from one account to another, which takes extra time and energy.

The takeaway

It’s perfectly legal—and often smart—to have more than one business bank account. If you’re a high-volume company with complex finances, establishing multiple accounts can help you stay organized, streamline your taxes, and improve overall financial security. However, it’s not always necessary, especially if you have a brand-new business or side hustle.

Opening two or more business bank accounts also comes with added financial responsibility, and it may not be the best choice for small-business owners who struggle with money management.

Would you like to learn more about business bank accounts? Read Small-Business Bank Accounts: Your Ultimate Guide.

Related reading

Business Bank Accounts FAQ

Is it good to have two business accounts?

It can be beneficial to have two (or more) business bank accounts. Here’s why: having multiple business bank accounts can help you better manage cash flow and save money by separating different types of expenses, such as employee payroll and client payments. It can also give you access to more capital if you use a higher-interest account to build your savings.

Can you open a second business bank account?

Yes, it is possible to open a second business bank account as a small-business owner. Just have a clear idea of why you want to open a second bank account before you apply, since having more than one account can complicate your bookkeeping and money management.

How many bank accounts should a business owner have?

There isn’t a set number of bank accounts that your small business should have—or a limit on how many bank accounts you can set up. At a minimum, you’ll need one business account to optimize your finances and simplify your taxes. After that, you may want to open one or more additional business bank accounts in order to better organize finances and separate expenses. However, you might also prefer the simplicity of having just one business bank account.

Is it illegal to have two bank accounts with different banks?

No, it’s not illegal to have two bank accounts with different banks. In fact, there are some benefits to having more than one business bank account. If you have savings, a higher-interest account will help you grow your cash reserves at a faster rate. Multiple bank accounts can also help you better organize your finances and separate taxes from payroll.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Brooke Kunz
Written by
Brooke Kunz
Brooke is a copywriter and artisan ice cream enthusiast dwelling in California's sunny Central Valley. She's happiest when hiking in the backcountry, baking an overly complex cake recipe, or reading an engrossing new memoir.
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