What Is the Difference Between a Business & a Personal Account?

by Jessica Kent ; Updated July 27, 2017
Business and personal bank accounts are different.

When you own a business, you have bank accounts for your personal income and expenses; you also have bank accounts for your business income and expenses. Although it may be inconvenient to keep separate accounts, it is good business practice.

Account Types

You can set up checking, savings and money market accounts for your business. Unlike the offerings of many personal checking accounts, business checking accounts do not offer interest.


To open a business bank account, you, as the business owner, often must provide a copy of the business' federal identification number, articles of incorporation, board meeting minutes and the signatures of two individuals for deposit and check writing privileges. In the case of a sole proprietorship, one individual is sufficient. Personal accounts can be opened by one person with a driver’s license with a current address and Social Security card.


If a bank advertises a personal bank account with no fees, the bank must uphold that. However, in the case of business accounts, banks are allowed to state the accounts have no fees and then provide a list of exceptions. The most common exceptions are fees for the number of checks paid each month and the amount of actual cash deposited, as opposed to checks deposited.


Setting up a corporation provides legal protection for the individuals running the corporation from corporate liabilities. If you keep your personal and business accounts together, you run the risk of being personally liable for corporate debts since it appears there is no boundary between you and the corporation.


Maintaining separate business and personal bank accounts allows you to easily identify business expenses for tax preparation. In the event of an audit, it is also easier to substantiate business expenses if the expenses are all from business bank accounts.

About the Author

Jessica Kent started writing professionally in 2002. Her articles have appeared in publications including the New York State Bar Association's "Family Law Review," "Valuation Strategies" and "Metropolitan Corporate Counsel." Through her writing, she strives to assist people in making informed financial decisions. She is a Certified Public Accountant in New York. Kent holds a Bachelor of Science in accounting from Binghamton University.

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