When starting your small business, dropping everything to do research on the best small business bank accounts may not seem like a top priority. That is why many small business owners will often open an account with the first bank that comes to mind, and later have regrets about their choice.
Choosing a small business account is crucial to the ongoing success of your company over time. It is best to find a bank that you are comfortable with and one you will happily use for many years to come. Therefore, taking the time to compare small business bank accounts is not wasting your time as a company owner; instead you are actually investing your time into something worthwhile.
What to Compare When Choosing a Small Business Bank Account
There are several factors you will need to compare before you make a final decision. You will want to look at the perks offered by each bank you have in mind and weigh out the pros and cons. Here are a few of the essential details that all business owners should consider before they open a new business account.
Balance Requirements
Perhaps the most important factor when opening a small business bank account is the amount of money needed to keep in your balance to avoid any fees or penalties. Many business accounts require you to maintain a specific minimum daily balance to keep everything in good standing and for you to avoid fees.
Accounts with lower balance requirements can be good for businesses just starting out, but they will also have limited features such as no free wire transfers or monthly fee waivers.
Make sure that you open an account that has a monthly balance requirement you feel comfortable with. If the requirement is too high, try looking elsewhere because this amount varies greatly from one financial institution to another.
Limits on Transfers and Deposits
Owning a small business means that you will likely make dozens of transfers and deposits in a single month. Many banks will place a limit on how many of these transfers you can perform in a 30-day period. Others may offer several free transfers per month then begin to charge after a given amount.
If your business requires you to make more transfers and deposits than the average company, you will want to find a small business checking account that offers free or low-fee transfers and deposits, or one that allows for more of these transactions than other banks.
If you don’t need that much flexibility with your transfers, you will have more options for small business accounts available to you, and these limits should not be a deciding factor.
How Easy it is to Access Liquid Assets
As a small business owner, you may need to access your assets more frequently than larger businesses simply because you are working with a tight budget. Business checking accounts are designed to help you save as much money as possible, and therefore, they will place limits on how much and how frequently you can withdraw funds.
Although it is a great feature to prevent account owners from overspending, it can be a nuisance when you urgently need to access your funds.
If you feel that you may need more free withdrawals or deposits than the average business owner, you will want to look for a business account that will not charge high penalty fees for going over your transfer amount each month.
How Up to Date is the Bank with Today’s Technology?
Modern technology has changed the banking industry for everyone, especially business owners. More business transactions are performed using smartphone devices now than ever before.
Therefore, you will want a bank that keeps up with the changing times and today’s advanced technology. The banking industry has seen plenty of innovative changes over the years, and it is easy to find an account that offers mobile banking, automatic bill pay, and other essential features that will eliminate paperwork.
Choosing a business account that offers online banking, mobile banking, online transfers, and mobile check deposits can help save you time and allow things to run much smoother for your business.
Developing a Strong Business Relationship
Developing a strong business relationship with your bank, as you start building your company, is one of the best ways to ensure you will have a bank you can rely on for many years to come. If you can find a bank that caters to the needs of small business professionals and one that has clearly advanced with the changing times in the banking industry, you have made a good choice.
Staying with the same bank for years can help tremendously when you need to take out a loan because the bank already has a record of your financial history. This is true for both business accounts and individual accounts.