Experts: How To Choose a Business Bank Account
Choosing the right business bank account can be a great benefit to your company, providing the services you need at a low cost. But choosing the wrong one can be a costly, time-consuming mistake.
Since business accounts tend to come with more bells and whistles than basic personal accounts, you’ll have to do some research to see which of the many available options is best suited for your business. Here’s some advice from industry experts to help you find the right match.
Will This Account Serve Your Business?
The most important factor to consider when choosing a bank account is whether or not it provides the services that your business needs. Whether it’s access to various types of financing, money transfer services or invoicing, be sure that your bank account will be able to handle the transactions that your business conducts.
The experts at Accion Opportunity Fund advise companies to ask about business banking services upfront, as “You don’t want to sign up for business checking and find out that they can’t give you a loan when you need it.”
How Much Will It Cost?
Bank accounts in general are notorious for their fees, but business bank accounts in particular often carry a number of extra charges. According to the U.S. Chamber of Commerce, bank accounts may charge fees for everything from overdrafts and wire transfers to monthly maintenance fees.
To avoid those fees, you essentially have two options. You can either consider an online bank, or you can negotiate with a more traditional bank to lower or eliminate their fees. Sometimes, banks are willing to waive fees with certain qualifying activities, such as making a certain number of debit card transactions or keeping a minimum balance in the account.
Take Our Poll: Do You Tip for Service?
Is There a Signup Bonus or Introductory Offer?
Banking is an extremely competitive field. To get ahead, many banks offer signup bonuses or introductory offers to make their accounts more attractive to potential customers. For example, a bank might offer a $200 cash reward if you deposit a minimum amount of money, or you may receive a low interest rate for the first 12 months of a loan.
While these types of offers are appealing, the experts at Business News Daily suggest you make sure that “…the bank and its account features tick other boxes.” In other words, don’t open an account just for the offer if the bank itself won’t service your company’s needs.
Is the Account Insured and Secure?
When searching for the bank that offers you the best deals and the lowest fees, it’s important to stick with accredited institutions. While there aren’t many fly-by-night banks still in existence, it’s important to verify that your accounts will carry the FDIC insurance that you would expect out of a major bank.
In this day and age, however, FDIC insurance isn’t enough. You’ll also want to check that your bank has strong cybersecurity and can protect itself — and your company — from any hacking or malware threats.
Of course, you’ll have to do your part also. Donald Korinchak of CyberExperts.com suggests that in addition to avoiding weak PINs or passwords and sending sensitive information via email, banking customers should use multi-factor authentication and set up account alerts. Be sure that your business bank offers these types of customer protections before opening an account.
Do You Prefer In-Person Services?
Online banks can offer very competitive business accounts because they have low overhead. Typically, they pay higher interest rates than brick-and-mortar banks, and they often have no fees, which can make them outstanding choices. But if you value the ability to conduct some of your transactions in-person, then an online account may not be for you.
The Bottom Line
A number of variables should go into your selection process for a business bank account, but the bottom line is simple. The best bank account for your company is the one that provides all of the services that your business needs while charging the least amount in fees.
It can be burdensome, and possibly even expensive, to change business bank accounts, so it’s important to do the research the first time before you make your choice.
More From GOBankingRates