LarryLJones says:

There is no reason you cannot have accounts at as many banks as you choose. The benefits of spreading out your deposits should be scrutinized.

If you wish to carry in excess of $ 100,000 in any account, then it would be beneficial to use multiple banks or change the ownership on each account to be different.

However, the benefit for a small business to keep all their accounts at one bank is to be considered.

If your business borrows to operate, the amount of deposits in the lending bank is considered both when approving the loan and when pricing it.

If you are borrowing $ 100,000 and you have $ 50,000 on deposit, the rate should be better. Your deposit is fixing the bank’s cost of funds expense. Therefore, they pass it on to you.

Sometimes the credit request is out of the normal way of doing business for a bank. A borrower may want special conditions or terms that the bank does not normally do. Because of a larger deposit relationship, they are more likely to accommodate.

Lastly, it is important for a small business to have a working relationship with their banker. If the banker sees accounts at multiple banks, it is probable the commitment to go any extra mile will not be as likely.

Remember: Interest is not the only factor involved in a deposit account.

I hope this helps…

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Gudsud55 says:

Certainly, Yes !
But no benefit, rather more confusion and more documents,
as well as more cost, and lesser creditability. Difficult to maintain loyalty with two, banks. Until and unless you have a specific requirement of your business associate.

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esturts says:

as a small business or individuals there are no limits to the # of accounts but why go through all the paperwork for it.

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gonzo says:

Yes. The only difference will be more paperwork.

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