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We will cover several topics in this guide on transferring money from a business account to a personal account. These include explaining the differences between the account types, the top 3 companies that facilitate this account transfer, and the reasons you may want to transfer funds. By the end of the guide, you will see that companies like Wise and TorFX are some of the best choices for transferring funds between the business and personal account.
How to move money between my business and personal accounts?
One of the best ways to fund your business, especially starting out, is using personal funds. Therefore, most money transfer services make it easy for you to move funds straight from your personal account to a business one. If both accounts are with the same service, the transaction will likely be instantaneous, and no fees will be charged.
However, you will need to check if this is the case with your money transfer company. Services like Wise and TorFX are excellent options that allow straightforward transfers between the two account types.
Can I move money from my business account to a personal account?
Now let us ask if you can legally move money from the business account to the personal one. In most cases, it is legal to move money between accounts. However, there are many nuances for why it might be a good, bad, or misleading idea.
For instance, moving money between accounts can have unintended tax complications. Therefore, it is worthwhile to hire the services of a tax accountant to help you decide if money between the accounts is a good idea.
In some cases, moving funds to a personal account might be a good idea. For example, let us say that you want to protect your liability by not losing all of your money if the business goes under. Then you could move some of the money to a personal account. Note that this will not protect the money from all kinds of liability. Getting advice from an attorney and business accountant arms you with the proper knowledge to make a decision.
There are some conditions under which you cannot send money from the business account to the personal one. This might be when you have business expenses that need to be paid. You can technically move money between the accounts, but it is not advised.
Steps to sending money from a business to a personal account: the process of each money transfer service will differ, but generally speaking, it is similar. Below we will highlight the process that is used for Wise customers.
You need to start with a business and personal account with the service. Next, you will need to gather the details of the recipient account (personal), which might be bank details for that account. Finally, you must enter the amount you wish to send and the currency.
Top 3 business accounts for easy money transfers between accounts
This section showcases the best three companies facilitating money transfers between business and personal accounts. We recommend these services because they provide low fees, fast transfers, and competitive FX rates.
Wise is an FCA-regulated money transfer service that matches the mid-market rate and offers instant balance transfers. Their user interface is easy to understand and contributes to business owners’ stress-free money management experience.
You can set up accounts with multiple currencies and convert when required. Also, Wise converts at the mid-market rate when sending money in a currency different from the source account. Finally, Wise makes it easy to transfer funds from your business account to your personal one. You simply need to enter the personal account bank details and enter the amount you wish to transfer.
- FCA-regulated and safe to use
- Matches the mid-market rate
- Instant balance transfers between Wise users
- Occasional delays of 1-2 days
- Limited to 61 countries
Airwallex offers businesses a low-cost way of sending money overseas. Using local payment technologies, Airwallex can cut the fees to zero in most cases. And the currency conversion markup is competitive, too, at 0.3-0.6%.
Airwallex provides 14 currency accounts that can be opened for business customers. Sending money from the business to personal accounts can be completed in just a few simple steps. Also, businesses can take advantage of accounting software integrations to help manage transactions.
- Low-cost business transfers
- Can open 14 currency accounts
- Integrations with accounting software
- No mobile app
- Limited transfer payments options
TorFX is a business-orientated money transfer service that has an excellent reputation. They provide up to 60 currency accounts, which is perfect for international businesses. Also, there are no transfer fees; instead, you will be charged a markup percentage of 1-3% for currency conversions. Therefore, businesses will save significant sums of money for money transfers where no currency conversion is required.
TorFX makes the process of sending money from your business account to your personal one simple. It allows you to pay yourself a salary from the business without having to register with another money transfer service.
- Provides business features like spot contracts and mass payments
- Zero transfer fees
- Multi-currency support of 60 currencies
- Costly smaller transactions
- Limited transfer payment options
What is the difference between personal and business accounts?
The differences between a personal and business account depend on the money transfer service. Each one provides different functionality for both types, and there is a lot of overlap. Typically, business accounts have more advanced features like forward contracts and mass payments.
Furthermore, they come with higher transfer limits so that growing businesses can handle the required sales volume. Finally, business account holders may receive a dedicated customer service person to help with urgent business-related finance matters.
You can also transfer money from one business account to another. The costs will depend on the money transfer companies involved in the transaction. Companies like Wise and Xe would allow these transfer types without charging significant fees.
What are the legit reasons to take money from a business account?
This section will cover the top reasons you may want to transfer money from your business account to the business one. These reasons are generally acceptable in many countries, but it is always worth checking the local laws to err on the side of caution.
Taking a salary: it is common for business owners to take a salary from their business funds, which is one of the top reasons for sending money to a personal account. There are likely to be tax implications for this transaction since receiving an income is a taxable transaction in most legal jurisdictions around the world.
Receiving dividends: dividends are payments made to shareholders from company profits once the corporation tax has been deducted. Since most business owners also own shares, it makes sense to transfer dividends to their personal accounts.
Paying for expenses: in some instances, it might make more sense to pay for expenses from a personal account instead of a business one. This might be done for tax purposes or because those are personal expenses that have nothing to do with the business.
Reimbursement for business expenses: in the past, expenses might have been paid from a personal account that now will need to get reimbursed from the business one.
Director’s loan: this transfer type is not an expense payment, dividend, or salary. It is money that has previously been loaned to the company.
Money transfer companies - Easily transfer money from a business account to a personal account
To summarize, many multiple top-tier money transfer companies can be used for transferring funds from the business account to the personal account. The top reasons for doing this include paying for a salary, receiving dividends, and paying for expenses. Furthermore, the top services we recommend are Wise, Airwallex and TorFX.
We encourage our viewers to continue learning about international business transfer by checking out our other guides. These guides will help businesses manage their finances to cut costs and reduce transfer time.
