Learn how to select a business checking account based on the costs, features, and services that are most important to your company. You probably use a variety of tools as a business owner to operate your company. You might have a point-of-sale system, inventory management software, and accounting software.
Most tools are designed to improve the efficiency and effectiveness of your business. While some tools are essential for your business, they can also be very inconvenient. A company checking account is just one of these instruments.
You may better manage the finances of your business by using business checking accounts. They enable you to maintain financial and banking privacy between personal and business accounts.
Sadly, not every company checking account is past due. For company owners, many of these checking accounts provide a terrible experience. They might have expensive fees. Others might have had a bad experience with mobile or online banking.
Continue reading this article about what to look for in your future business checking account to help you select one that will make your life as a business owner better.
Determine Your Needs
Each small business owner has unique requirements for business banking.
A business that relies largely on cash will probably select a different checking account than one that primarily accepts and sends payments via wire transfers.
A company that only operates online could probably handle all of its banking needs electronically. A business that operates on cash will also require a local branch to receive deposits.
Analyze Potential Banks
Once you are aware of your company's requirements, you can compare various business checking accounts to determine which one is ideal for you.
- ATM service and costs
- Transaction charges
- Maintenance fees each month
- Cash deposit fees
- Employee account access
- Wire transfer fees
- Online banking resources
ATM Service and Costs
Some companies could use ATMs frequently as an easier approach to handling their financial needs. Businesses that want to use ATMs need to consider several important factors.
Start by examining the bank's ATM network. Make sure the ATMs are close to where you need them to be. Check to see if the bank has any ATM fees next. Some impose fees even while using an ATM owned by a bank. You might get reimbursed for the ATM fees that other banks charge.
Recurring Maintenance Charges
Checking accounts for businesses frequently includes monthly maintenance costs. They may go by different names, such as a monthly service charge or a minimum balance requirement.
Whatever name they go by, you might be fortunate enough to locate a better bank account that doesn't impose any fees at all. If you can't, most of these monthly costs are usually refundable if you engage in certain activities. The secret is knowing how to fulfill the requirements to avoid paying the cost.
Many banks will waive the fee as long as the account maintains a minimum balance. Some banks mandate that you maintain a minimum amount at all times to avoid being charged a fee.
Other institutions will add together your daily balances and divide them by the number of days in the statement cycle to determine your average daily balance. If your average balance goes below the cutoff, you will be charged the fee.
Though not all banks prioritize balances. Some may demand that you deposit a specific sum of money each month or do a specific number of debit card transactions.
Costs of Transactions
You can typically get a set amount of transactions per month free with business checking accounts. If you go above the allotted amount, you can be charged for each additional transaction.
Find an account that doesn't impose these fees, if possible. Find one with a high allowance for cost-free transactions and the next lowest fee per transaction if you can't and you conduct a lot of transactions.
Know what a bank believes to be a transaction. Every item on your monthly statement is typically included. Deposits, paid checks, withdrawals, wire transfers, and other debits or credits are included in this.
Deposit Fees in Cash
Be aware of cash deposit fees if your company accepts cash payments. The majority of banks only offer free cash deposits up to a few thousand dollars per month.
When you reach the cap, you must pay a fee for further cash deposits. This is typically a few cents for every $100 placed. A company that only gets a modest sum of money might not have a problem with this. High fees might apply to other businesses that deposit tens or hundreds of thousands of dollars in cash each month.
Wire Charges
Wire transfers are frequently used by businesses that handle significant payments to shift money. Both sending and receiving money are covered by this. Fees for wire transfers are common and vary based on the type of transfer.
Various wire transmission formats include:
- Local incoming
- Domestic travel
- International arrival
- External to the world
There may be a monthly cap on the number of free wire transfers you receive from some institutions. For each transfer, some others levy a fee.
Banking via Mobile and Online
Tools for online and mobile banking are becoming crucial for business owners. Anywhere you have an internet connection, you can check your balance. Various service tiers may be available on mobile banking applications. While some might provide mobile check deposits, others might not.
Before opening an account, become familiar with the features that come with an app or online banking. Find out if there are any fees associated with app-based services or transactions.
You can learn if an app is missing any important features by reading app reviews.
Online Business Bank Accounts Are an Option
If you don't need access to physical branches, online business checking accounts might be a wonderful choice.
Unlike brick-and-mortar banks, online banks do not have to pay for physical locations. This lowers the bank's expenses. Customers may receive some of these cost reductions from digital banks in a variety of ways. Online banks could have more affordable service costs. Some offer interest rates on checking account balances that are significantly greater than average. They could also remove transactional restrictions that many physical banks frequently impose.
Additionally, these banks frequently leverage a sizable ATM network for a limited number of in-person transactions.
Create the Ideal Business Checking Account Right Now
Examine the free business checking account options available in your area once you've determined your banking priorities. If they might suit your needs, don't forget to take into account online business checking accounts.
Compare your requirements to the offerings and costs that each bank imposes. Then open a business checking account at the financial institution that best suits your firm.
Contact Notebanks for more information.