Kids Kreative Korner
As You Get Your Business Off the Ground, It's Time to Open a Bank Account.
By Bonnie Drew
If you don't already have a savings account when you start your business, you should open one immediately. A savings account gives you a safe place to keep the money you earn. It also establishes you as an account holder at the bank. Then when a customer gives you a check, you will have a place to cash it.
Not every young entrepreneur needs a checking account. To open an account in your business name, you will be required to show the bank a copy of your DBA form. One disadvantage of a business checking account is that the service charges are higher than for personal accounts. However, a checking account is an excellent record-keeping tool for your business if you faithfully deposit all income and pay all expenses through the account.
Fees, service charges, and interest vary widely from bank to bank. Before you choose a bank to handle your business account, do some shopping around.
CHECKLIST FOR COMPARING BANKS
* What is the minimum deposit required to open an account?* What rate of interest is paid on savings accounts?
* What are the service charges on checking accounts?
* Are there extra fees on commercial checking accounts?
* Is a parent required to cosign on checking accounts?
* Are the location and hours convenient?
* Is the bank friendly to young people?
Many banks throughout the U.S. are starting to think more about serving the needs of young people. Some have special tellers for youth, computers with games that teach math and money, and workshops to help kids understand banking.
The Young Americans Bank in Denver, Colorado, which opened in 1987, was the first commercial bank for young people under the age of 22. Anyone more than 12 years old can open a checking account. And you don't have to live in Denver to start an account.
Your business plan should include a listing of your bank accounts, the purpose of each account, and the name and address of your bank.
Bonnie Drew is the author of FAST CASH FOR KIDS (2nd edition), published by Career Press (1-800-227-3371). She is also the creator of the KIDS BUSINESS software for young entrepreneurs, available from Homeland Publications (713-332-9764).
Drew is also Editor of YoungBiz online magazine, published by Kid's Way, Inc., a company that helps youth prepare for business and the workplace of the 21st century. For more information, write to Kid's Way at 5589 Peachtree Rd, Chamblee, GA 30341 or call toll free 1-888-KidsWay (1-888-543-7929). YoungBiz magazine can be found at http://www.youngbiz.com
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