Why can I add secondary savings account to a personal account without hassle, but not to a business account?

Question

I've been using a small-town Credit Union for all of my personal banking for many years and have always been really happy with them. When I first set up the account, it included Checking, Savings, and a Credit Card. Since that time, I've used their website to open up several more accounts. One thing that's really nice about their website is if I want a secondary savings account, all I have to do is click a button and give it a name. So I entered "Escrow Account" as the name and hit the "Add Savings Account" button and bam, new account. Or "Vacation Savings" and hit the button and bam, another new account. It's super convenient because it allows me to bucket money for specific purposes, and I don't have to go into the bank, call them, or email. It's all automatic.

It seems it's a different story in the business world. I've got also got a small business account with that Credit Union, and recently I wanted to do the exact same thing - I wanted to immediately open secondary and tertiary savings accounts through their website. So I was surprised to see that in place of that "Add Savings Account" button was a different link, labeled "Contact Us to Open a New Account." It seems they offer no automatic way to add on secondary accounts for businesses.

And it's not just small-town Credit Union, either. I started calling around several other credit unions and banks in the area, to see if any of them offered this feature. None of them do. Several do have the same option for personal accounts, of quickly and effortlessly adding on additional accounts. But not for business. They need you to come in, fill out paperwork, set up signers, etc. All of this is surprising to me only because you have to fill out all that paperwork anyway for the first account. How hard would it be just to automatically copy over all the same values for the second account, on the backend?

Is there some law or regulation that prevents this from happening for business users? Having experienced it on the personal side of things, I know how useful it is. So it's very frustrating when encountering a seemingly arbitrary roadblock on the business end.

Answer 1

Unfortunately, none of us can answer this conclusively. Maybe you can ask your specific credit union if you want to know their exact reason. But, there may be a handful of potential reasons:

• Many credit unions use separate online banking software for business accounts versus personal accounts. Even if they look the same, the back end may be different, and the business account software may simply not have the functionality to do what you're trying to do even though the function exists in their member-facing software.
• Some institutions have different rules or requirements for business accounts, and they may not be able to automatically approve something as simple as a savings account without additional steps. Often these additional rules have to do with things like fee structures or other functional impacts.
• Some institutions simply want a way to market to you, or to talk with you about your needs when it comes to business accounts, so they'd rather talk on the phone (and potentially suggest different options) versus just letting you create an account

In general, for better or worse in your situation, credit unions are often much more focused on private individuals than they are on business members, so it may just boil down to them not really having much focus on your business needs.

Answer 2

Not the same issue, but related: I have personal and business accounts with the same bank. I can freely transfer money between my personal accounts on their web site, but I can't transfer money between a personal and a business account. For that I have to physically go to the bank. (Like we were living in the 19th century or something!) I asked about this and they told me that to transfer money to or from a business account, they have to have a signature. They can't do it with just a click on a web site. I didn't think to ask if this was a bank policy or some government regulation.

In your case, it may be that, either because of bank policy or government regulation, they can't just assume that a new business account has the same authorized signatures et al as an existing account.

I freely admit my knowledge on this is limited so I will gladly yield to someone who actually knows. :-)