A business bank account will protect you from liability and make tax time easier. Not all bank accounts have the same features. Consider these seven factors when selecting a business account.
Consider the location of the bank and its importance to you. Do you want to find a bank that has many branches you can visit or is a good fit for you? Do you need to have access to a large ATM network?
Would an online bank suffice? Online banks usually offer lower fees, higher interest rates and mobile access.
There are no physical locations that you can visit. Customer support is provided online or by phone. If you want a more personalized service, then in-person banking is the best option.
Many bank accounts have a variety of fees. These include monthly maintenance fees and overdraft charges. Most customers may not think these fees are necessary, but they help pay for the bank’s branch locations, customer service, and other services.
Open an online business account with Kabbage, BlueVine or other providers. This may not be the best option for you if your preference is to do banking in person.
Ask the bank if they can waive their fees if you’re not happy with them. Some banks, for example, offer an overdraft or a way to avoid the monthly maintenance fee.
Least Balance Necessities
Some banks will require you to deposit a certain amount when opening an account. Some banks require that you maintain a certain minimum balance each month. If you do not, they will charge you a small monthly fee.
You may be required to maintain a monthly average balance of $5,000 or you will have to pay a $20 charge. Find out the minimum balance requirement and decide if it’s realistic for you.
Maintaining a balance in your checking account may not be feasible if you use it primarily to manage cash flow. Many banks are willing and able to waive these requirements.
Offers for Introductory Period
Banks will occasionally offer an introductory offer to encourage new customers to open a bank account. You could, for example, earn $300 if you opened a new checking account with Chase Bank.
These offers are a great incentive to open a business account. Be sure to read the fine print and meet all the requirements.
What additional features does the bank offer that makes it worth considering? Can you access your account via the mobile app of the bank? Does it offer bill-paying features?
If you are just starting out, ask your bank if they will extend you a credit line. You should always have credit available before you need it. A bank with whom you have an existing relationship may offer you better terms.
You might want to look at high-yielding savings accounts if you are planning on opening a savings account for your business. You can earn money by finding a bank that offers the best rates.
Online banks offer the best rates. Axos and Capital One, for example, offer high-interest saving accounts with low monthly charges.
Your business bank account will likely be used in conjunction with other tools. You might, for example, use QuickBooks to track your expenses and send invoices. You want a bank that integrates with the features that you use daily.
Find out the capabilities of a bank before you sign up. Also, check if it can sync with your accounting software. Integrating your accounting software with the right bank will streamline your finances.