How to choose your Business Bank Account
There are many choices out there for you to choose the right business bank account for you, but which do you choose?
You’re probably already with a bank and building that relationship but it doesn’t take too much effort to do a bit of investigation and switch you business bank account.
Doing this could reap huge benefits in terms of offers, interest rates, overdraft fees and monthly costs.
But the choice is endless so this is something that is often hard to choose.
But what do you need to take into consideration?
First I would begin with asking yourself some simple questions about what you want and what you need from your business bank account:
- What do you currently receive from your business bank account?
- Do you need an overdraft facility and if so for what amount and at what interest rate?
- Will you need the facility to withdraw large amounts of cash and what are the limits on this?
- Do you want to be able to bank by phone and internet?
- Where is the nearest branch?
- Is there a cost for paying in cash over the counter?
- Are you able to post cheques in or do they need to be done in branch?
- Are there any costs associated with direct debits and standing orders?
- Are there any set monthly charges on the account?
- Is there the option to have a credit card linked to the account?
- Can you have multiple accounts and is there a cost to this?
There are so many options available to you but these questions will help cut down your options and streamline your decision making.
Banks exist both on the high street and online and the online banks often offer better deals as you aren’t paying for their branches too.
All the main UK high street banks offer business banking but their products vary.
You need to be able to build a relationship with your bank, and most banks will offer you your own personal banker to go to with enquiries. This will help you get what you want.
If you are a small business you are more than likely able to benefit from free banking for a limited amount of time but this sometimes comes at the cost of increased fee’s.
The best thing to do if look at some of the better looking banking packages then look at all of the advantages and disadvantages.
What do they offer and what do they cost? Make sure you compare all the costs you might possibly have and tally these up for the average month.
This will give you a clearer picture of the best deal for you.
Having more than one business account?
It may sound like you are complicating finances more but there are some advantages to having multiple accounts.
Advantages:
- You can find the best deals for different banking methods i.e put all direct debits through the account with no direct debit charges
- You can have multiple overdrafts that you can use in a better way. I.e use the better interest rate deal for longer term overdrafts or the set fee overdraft for a short term overdraft.
- You can spread your savings so you are still covered by the Financial Services Compensation Scheme – above £85,000 and you are no longer covered.
- If you come into problems with one account through a genuine reason or bank error, you have a back up account available to you.
Disadvantages:
- Streamline and organise your finances in one place
- One set of statements and one bank account to be reconciled
- Easier to build a relationship with your bank manager
- Online banking is in one place
Whatever you choose to do and whoever you choose to bank with be sure to keep your eye on current business banking offers.
Being able to adapt to different banking offers will help greatly in reducing your business costs.
They will be constantly changing and you may find a better deal for you.
Don’t just presume once you have done the research that the hunt for a better deal is over.
This is a constantly revolving process and its up to you how you choose to bank. Some businesses stick with the same bank for years and years and this suits them as they need the strong relationship they build with the manager to help them manage the harder times.
So think long term as well as short term about what you want and need.
Tags: bank account, business bank account, business costs, long term, short term