A commercial account is an account that allows customers to use it for business rather than personal reasons. Commercial accounts are usually charged interest, fees, or other costs businesses incur for using the account.

However, there are some advantages to using a commercial account as well. Certain types of businesses can apply for a commercial-only savings account, where the bank won't allow withdrawals from personal accounts without permission from the business owner.

To understand these advantages, let's talk about what makes commercial-only savings accounts so important to certain industries.

Banks that offer commercial accounts are typically very selective in who they accept. If you want to open a commercial account, you must find a bank willing to take you.

Why is this?

For one thing, your bank may be subject to regulatory oversight. All banks are required by law to monitor how their customers use the money in their accounts. They do this for one simple reason: You don't want severe penalties for abusing your account's privileges.

If that seems like a bad thing, it is - but it's not necessarily as big of a deal as you might think. If a bank is not careful, it could be subject to penalties of up to $10,000 for each customer that abuses its privileges through illegal transactions. If you are a criminal or other bad person, then that would be bad news for you.

However, there are many banks out there which have no interest in monitoring your account. Maybe they're not aware that their customers can withdraw from their accounts or use them for illegal means.

Maybe they just like money and would rather make sure you get business from it instead of pocketing it themselves. Whatever the reason, if you want the benefits of a commercial account, you need to keep looking for a bank that doesn't care that your account is being used for illegal transactions.

Next, you need to think about how to use your commercial account once you have it. If you plan on using it for legitimate transactions and don't want your business to get into trouble, there are things you can do to ensure everything runs smoothly.

Methods Used by Commercial Banks

Commercial banks serve by providing standard banking services and products to individuals and small and medium-sized enterprises. Services such as safe deposit accounts and basic investment services like savings accounts and certificates of deposit are included here.

It is via these types of fees that banks generate revenue. Account costs (monthly maintenance fees, minimum balance fees, overdraft fees, non-sufficient funds (NSF) penalties), safe deposit box fees, and late fees are all examples of product-specific expenses. Fees, in addition to interest rates, are standard in the lending industry.

When a bank lends money to another customer, it collects interest payments from that customer. They use depositors' money to make loans. The bank pays less interest on the funds it borrows than the rate it charges its borrowers. A bank might give its customers a 0.25% yearly interest rate on savings accounts while charging its customers 4.75% yearly mortgage interest.

Historically, commercial banks have been housed in facilities where clients may use a window service and automated teller machines (ATMs) to handle their day-to-day financial transactions. Since the advent of the internet, most banks have made it possible for their clients to do a wide range of banking transactions, such as deposits, withdrawals, and bill payments, entirely online.

Example

For example, when withdrawing from an ATM with your business savings account, make sure that the transaction is conducted in front of at least one other person and yourself.

If a teller or bank employee catches you conducting an illegal transaction, they'll turn you in. Remember, it's illegal for your business to use personal accounts for business transactions.

Another way to avoid this is to simply not use ATMs for your withdrawals over $100. If you have a bank account of some kind, use that instead. Transfer money from your savings accounts regularly instead of making withdrawals throughout the year.

That way, if anyone ever questions you about it, you can simply show them the dates on which your transfers were made.

The final thing you need to do when using your commercial account is being aware of the requirements for opening a business account. If you want to open a savings account, find out if the bank needs your ID or Social Security number to open the account.

Make sure you have that information in case the bank needs it. When you visit the bank and make your deposit, walk up to a teller and ask if they need any additional information from you.

They should let you know if this is not one of those accounts, or tell you what is needed if it is required for opening an account there.

In addition to savings accounts, commercial accounts can also be used for checking accounts. These are not as commonly found as savings accounts, but they are still available.

If you don't have the cash available in your personal account to cover your business transactions, it would be a good idea to find out whether or not that bank accepts commercial checking accounts.

Then you can deposit your business funds into the account and withdraw them from there instead of draining your personal account to make purchases or make tax payments on time.

Overall, commercial accounts are something that lots of people can benefit from. However, it's not a free ride. You're going to have to do your research and find the right bank before you can convince them that you are a legitimate business owner. And, as with most things, if you do it right, so much the better!

Conclusion

A commercial account is a great way to get the products and services you need for your business. They offer a variety of benefits that can help your business grow. If you're looking for a new supplier or want to learn more about what commercial accounts offer, be sure to check out this blog post.