When running a business, be it a B2B or B2C, an offline or online store, one of the things an entrepreneur should have is a business bank account.
When choosing a business checking account, you need to consider your future expected business needs and not just your current needs. The bank you want should have the potential of serving your business for the foreseeable future.
A good bank account can help you in putting your business finances in order. In turn, your business can gain access to financial products that can help to expand and grow the business. There are a ton of banks in the market. Choosing from nationwide chains, online banks, or community credit union can be confusing.
Here is what you must consider when looking at the best business banks.
Assess your banking habits
The best way to understand your business banking needs is to examine the financial history in the last 6 to 12 months. This is if you already have an established business. For new companies, look into the 6 to 12 months financial projections. This information can help you project a few factors.
- The amount of cash you may have at hand monthly.
- The amount you spend monthly.
- Credit card transaction values.
- Whether your business needs additional capital like a line of credit or a loan.
In turn, you can use this information to determine what you need from the right bank.
Every bank has its unique features. Ideally, it is better to consider a large nationwide bank for your business. These banks provide a more significant range of services and products as compared to local credit unions or local banks. Big banks also offer more perks, lower fees, and you enjoy a nationwide banking network and ATM services.
Even so, larger banks offer less personalized services as compared to smaller, local banks. If you run a local business, you are more likely to get better services from your community bank. These small banks offer more flexibility for loan applications and can provide waiver benefits under excruciating circumstances. Small banks are more interested in building a relationship with the client. However, they may not serve the needs of large businesses.
Do you need branch banking or online banking
Advancements in technology have made it possible for most banks to offer online banking facilities. Other banks strictly run their operations online. These banks give you the convenience of electronic money transfer, mobile check deposits, and also online bill payments.
Even with the convenience of online banking systems, sometimes it may not apply to your business. If you deal with handling more cash than digital transactions, it is best to choose a bank with a physical branch. It is also a better idea to physically go to a bank branch when planning on taking out a business loan. Face to face relations can significantly improve your chances of getting a loan.
Comparing the fees
Almost all banks charge fees for business accounts. The trick is finding a bank that has the lowest fees rates but still offers cutting edge services and products at reasonable prices. Most banks allow you to deposit funds for free up to a specific limit. Deposit fees are charged when your deposits exceed this amount. Most bank fees are charged at 30 cents for every 100 bill over the deposit limit.
Some banks also limit the number of transactions an account can conduct. You are charged for any extra transactions above this limit. Some banks charge 40 cents for additional transactions.
Every bank has limits and restrictions. The key is to find the most flexible one for your business needs.
The earning potential
Even with a business account sometimes, it is possible to earn interest from your account. This feature is especially valuable to entrepreneurs who deposit large amounts of money in their account. An interest-earning account allows your money to multiply, which is a bonus if you have large amounts in the account.
Some banks will offer interests on deposits. Just ensure you check that expensive banking fees do not offset these interests.
Visit a branch
When considering a physical bank, it is best to visit the bank before committing. Take the time to discuss the type of business you run and ask for recommendations for the best account choices. Ask for information about their services and products.
Visiting a bank is also a good way of knowing whether it is the right fit for your business. Because you will be working a lot with the bank, it is best to build a good rapport.
Customer service ranking
Every bank has its advantages and disadvantages. You only need to ensure that the good outweigh the bad if you want to get the best fit for your business. Checking the customer service ranking of the bank will tell you everything you need to know about their services.
You can check for bank customer service ranking in the major online ranking sites.