Recommended Banking Accounts

Submitted by refugeplays t3_11eaa0i in personalfinance

Hello all. I’m 26m and on a quest to get my wife and I’d finances in a bit more order as we are approaching our dual income and no kids phase of life. I have a few questions I’m hoping more experienced adults could help with.

  1. Aside from our actual medical careers, my wife and I have owned and operated a wedding photography business for the last 5 years. It’s makes us an additional 35-40k per year. I run it as a sole proprietorship under my name and SSN not an LLC. We’ve always just kept records of payments and expenses; however, I’d like to make a separate business banking account of sorts to hold all of that money in the future. What are some good “business” bank accounts and would I need an LLC? Am I better off just using a separate personal bank account?

  2. Recommendations of business credit cards, preferably no annual fee. Rewards don’t have to be crazy good or anything. Purpose would be more for tracking business expenses.

  3. We have 25k set aside right now for a house down payment next year or maybe in two years that we’re actively adding to. It’s just in our checking account. Any recommendations for a good high yield savings account? Or is our timeline too short to worry about swapping to a HYSA now?

For any recommendations, is there a possible online bank/accounts options that are good and wouldn’t require making a trip in person?

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teakwood54 t1_jacyf7s wrote

3:. I use Ally. They currently offer 3.34% so that would be $800-$1600 depending on when you use it. Only downside is no physical location so you can't deposit cash.

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refugeplays OP t1_jacz0tx wrote

Thanks for the recommendation. Without the physical location, what deposit methods do they offer? Direct deposit? Transfers from other banks?

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teakwood54 t1_jad00ia wrote

I use it in combination with a regular checking account and transfer from there but I do think they allow direct deposit as well. They also have a "bucket" system so you can organize your money if you want to.

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lovemoonsaults t1_jad03au wrote

Direct deposit and ACH transfers between banks.

So to get it back to spend you forward it back to your physical bank. It only takes 1-3 days.

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MountainMantologist t1_jacyhy8 wrote

I'll just chime in on point 3 - definitely not too short a timeline to utilize a HYSA. All the big ones are the same - we use Marcus by Goldman Sachs and like them just fine. Currently paying 3.75%

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refugeplays OP t1_jacz5zv wrote

Thank you. I’ll look into that one as well.

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2ReddYet t1_jad0ka1 wrote

I would definitely recommend an LLC. Running the biz as an SP opens you up to individual liability.

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Win-With-Money t1_jad130v wrote

This is very wise of you and your wife to get your finances in order. This will help out in many areas of your life but most importantly, your marriage!

  1. LLC vs. sole proprietor needs can differ depending on the state. Typically, forming an LLC offers you a layer of extra protection and "official" status to your business and personal lives. You can also "pay yourself" through an LLC which can help manage your business and personal finances a little more and at the same time, lower your taxable income.
  2. Going with an LLC is never a bad decision. Regardless if you decide to go separate, you should probably ask the IRS for an EIN number (you can do this without an LLC).
  3. Definitely have a separate bank account, debit card, credit card etc. for your business. This should be separate from all of your personal stuff.
  4. AMEX offers a decent 2% cashback on most expenses so that could be good option. There are many great business credit cards to use however. Capitol one has some good products as well.
  5. Bank accounts SoFi, Ally, (Sofi and Ally are super user-friendly) Discover all offer around 3.5-4.00% interest in their savings accounts (conditions apply)
  6. 25k is a good start. It's never to late to earn some extra interest in a HYSA. It would be a wise move to move that into a HYSA. Credit Unions can be a great choice as well if you have a local branch that pays a decent interest (3% or higher in today's economy should be good).
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refugeplays OP t1_jad1fai wrote

Thank you for all of these recommendations. Swapping from SP to LLC has been one of those things in the back of mind for a while now but I just have never taken the time to do it

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Win-With-Money t1_jad1ylx wrote

It's super easy to do in most states. Not sure which state you are in, but I've had three LLCs in three different states and they all took about 15-30 minutes to create and cost about $200 each to file. The hardest part was picking the LLC name ha!

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refugeplays OP t1_jad254h wrote

I started the SP in MS but have since moved to TN. Also another part of the process was moving the business to a new state as well

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Win-With-Money t1_jad3p2v wrote

Smart move, TN is beautiful, great cost of living, and NO state income tax.

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