One of the many essential things in any business is a bank account. Unlike your personal bank account, a company account can be used for business processes like sales, payroll, text returns, and many more.
If you’re a business owner looking for an open business account, here are some valuable tips to help you set up a business bank account:
- Determine The Nature Of Your Business
When setting up your business bank account, you must be mindful of your business procedures. You need to be sure about the type of account that best suits your type of enterprise. There are different types of businesses, including proprietorship, partnership, and corporation.
In a partnership and corporation, there have to be some appointed signatories. On the other hand, if you’re a sole proprietor, you’re personally responsible for all your business operations, including cash flows. It means you can be the only signatory to your business bank account. Once you’ve understood your type of business, you can now search for a bank that offers the type of bank account you need
- Establish The Services You Need
Depending on the nature of your business and your banking requirements, you must be sure about the services you need from your bank. The bank you pick should at least have the following basic business products:
- Current account
- Checking account
- Savings account
- Credit card
- Debit card
- Checkbook
- Deposit card
- Online business platform
- Checking accounts for employees
Also, find out about the bank’s other perks and incentives. You may find them beneficial.
- Choose The Right Bank
There are thousands of banks offering business banking services. In the big financial jungle, you could easily get lost and end up with an unsatisfied client. Although banks generally offer financial assistance, they have different products to offer. Therefore, you must take the time to understand the different offerings before picking the best one to meet your business needs.
- Understand The Terms And Conditions
When you have settled for a bank that you’d like to work with, try to understand their banking requirements. Credit requirements, interests, fees, borrowing options, and other incentives could vary from bank to bank. Therefore, you must be sure you’re happy with the bank’s terms and conditions before opening a business account.
- Know Your Banking Charges
One of the things you must be mindful of is the cost of banking. Most banking transactions come at a fee. And here are some common banking charges to expect:
- Account application fee – most banks will require a business account application fee when you open a new business account.
- Maintenance fees – typically, you’ll need to pay a monthly or annual fee for your account.
- Transaction fees – most transactions you make, including card use or online transfers, will attract a small fee.
- Overdraft fees – you’ll usually be charged a fee for using an overdraft facility.
Knowing your banking charges beforehand could help you pick the best account for your business needs.
- Maintain Good Credit
Although some banks may be less strict, most big banks would prefer working with businesses with good credit scores. To avoid being rejected by a financial institution, try to maintain a good credit score for your business. A good credit score could also help your company secure some lines of credit.
- Beware Of Bogus Internet Banks
Always approach any Internet bank with caution. As you may be well aware, Internet scams are on the increase. If you’re considering dealing with some online banks, you must do thorough research about them. Because banking is based on trust and honest relationships, at times, a physical meeting with your banker may be better than Internet-only banking.
- Consider Bank Location
When setting up your business bank account, you must consider the bank’s location. It’s always better to have a trusted banker that is easily accessible. A nearby bank could come in handy when you need urgent services like making daily deposits, getting bank-issued certified checks, and visiting the ATM.
If you don’t need to visit the bank physically, you could consider online financial institutions that are reliable and safe. Fintech platforms like Airwallex and many others are examples.
In Summary
Before setting up a business bank account, you must think carefully about the account you need. Speak to your business manager and understand what the bank could offer to suit your business needs. It’s always worth setting up an account with a bank that connects with your business. After all, a good relationship with your bank could come in handy.