Start Investing

What is a Corporate Account?

Andrew Goldman

Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC's Today show as well as Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier. In his spare time, he hosts “The Originals" podcast.

A corporate account is a catch-all term for a bank account that businesses use to hold their money. Corporate accounts are often referred to as business accounts. They can be used for investing, saving or every day banking. A corporate account is something that every business owner should open so that while they’re working, their money is working too.

Think about it. You pay corporate income tax on the money your small business earns when you withdraw it. What if you don’t need to withdraw it? Are you just going to leave that money stagnating in a corporate bank account that earns 0.01% interest? You don’t have to once you open a business investing or savings account.

Pros of corporate accounts

What are the pros? Business investment and saving accounts are great for enterprises that are making more money than they immediately know what to do with, or any business that has cash reserves. Opening a business investment account allows your enterprise to do with its money what any smart person would want to do with his or her extra money: invest it. This means it will be free to grow instead of stagnating earning virtually nothing in a bank account.

These accounts are especially good for businesses that are prone to good years and bad years. Why take profit at a time you’re earning plenty when you can wait for a slow year when you’ll be charged a lower income tax rate?

Is there anything to be careful about?

Yes. There are thousands of things to be careful about if you own a business—taxes are a big one. Anyone who’s ever been in business or knows what ultimately landed notorious gangster Al Capone in jail knows all about the importance of business taxes. Paying them is certainly necessary, but deferring them whenever legally possible is what every businessperson should probably aspire to do. We can help.

As soon as you incorporate your business you will be faced with major decisions that will ultimately affect your current lifestyle as well as your retirement. If your business is taking in more revenue than you need to pull out for a salary, you’ll have to decide how much to allocate to your RRSP and how much to invest or save through a business account. How much should you pay yourself to keep in the best tax bracket in order to maximize your TFSA room? Should you use investment dividends as a source of income?

If any or all of these questions make your head hurt the tiniest bit, you’re actually a perfect candidate for one of our business accounts. Wealthsimple employs a team of experts who have spent far too much time thinking about every possible permutation of situations faced by small businesses and are ready to offer unlimited, complimentary human advice to create the absolute best, tax-advantaged plan for you and your growing business. Just as with all Wealthsimple accounts, advice is free for everyone, regardless of account balance.

Check out Wealthsimple’s two different business accounts. If you just love the sound of both and just can’t decide which is preferable, why choose? Open two.

Invest for Business

Got extra cash on the books that should be working for you? Invest extra funds when you have them. If you have a slow business year, let the tax code work in your favor and withdraw the funds at a lower tax rate. Repeat as often as you like without penalty; there are no withdrawal fees. Invest in any or a combination of the following: GICs, mutual funds, stocks, bonds and ETFs.

While you mind the store, we’ll stay busy doing all of the following for free.

  • Dividend Reinvesting: We’ll instantly put your stock dividends back to work, earning you more.

  • Automatic Rebalancing: We precisely rebalance your portfolio as the market changes

  • Easy Access: manage your accounts from anywhere with our award-winning website and mobile app.

  • Invest And Save The World: Consider our Socially Responsible Investing portfolio to align with your business’s values.

Save for Business

The ideal home for funds that you don’t need right this second but might need in five minutes. Earn a truly respectable interest rate and never worry about access to your funds.

  • Earn 2% Interest on Your Business’ Cash: There are no introductory rates, limited-time offers, or expiries. The rate is the rate, period.

  • Quick, Easy Account Access: Get unlimited free transactions and never pay for having a low balance. Your money is your money. We’d never try to keep you two apart.

We might be a bit biased, but we think we’re the best home for your business account. Signup for a Wealthsimple business account today.

Last Updated August 21, 2018

Wealthsimple is investing on autopilot.