Where do you have your business bank accounts?

[Matt Ferch]

Hello, I’m wondering what bank you use for your business bank accounts? Because of a variety of circumstances, I cannot use a credit union, it must be a national bank. Please provide any feedback that you have, thank you.

[Jeff S.]

A few other considerations that most don’t put a lot of thought into, @Matt Ferch …

As real estate investors or lenders, we all tend to throw a lot of money around. Every time you write a check or provide instructions to have money wired into your account, you are publicly announcing your bank account number to the world.

With your bank account number, I could print a check with any check writing software and make it out to myself. Then I’d deposit it to my secret account at the Bank of Kazakhstan. (Or more realistically Doha or Nairobi, which are the true hot spots for banking fraud now.) You’d likely get repaid by your bank but will pay hell and it won’t be in any sort of timely manner; especially it was a substantial sum. Who needs the headache?

Instead, you might open two accounts at the same bank. One account would be your “public” account. This would be a checking account to which you can assume everyone has the account number. The other should be a savings account or similar, with an account number you hold as privately and as securely as possible.

You’ll keep a nominal amount of money in your checking account. Enough to pay monthly bills and other necessities. When money gets wired in or the rent arrives, you immediately sweep it into the savings account. When you have a substantial bill to pay or to make a loan, you transfer the money from your savings into checking and wire the money out from there or write a check.

Not that anyone wants to lose any money, but you mitigate your risk of bank fraud by exposing as little as you can using this method. Interesting, @Kyle J., this was recently recommended to us by Chase bank.