Internet Bank Basics

What every small business owner should know about Internet bank accounts

You know that time is money, and you've heard that online banks can help. Using online banks can help you save time, maximize the return on your company's cash, provide easy access to your funds, and help with record keeping. You should learn the Internet bank basics that you need to know before choosing to set up your Internet bank accounts.

As with any bank, Internet bank accounts can come with a number of different features that may or may not be important to your business. When evaluating Internet banking institutions, you should compare the following items:

1. Interest rates - How much will your money earn while it sits in online savings accounts?

2. Transfer limits - A good business Internet bank account will allow your business unlimited transfers without incurring additional fees.

3. Data export compatibility - Make sure that the statements and transaction histories provided by the Internet bank are compatible with the accounting software that your business uses.

4. Fees - How much is this Internet bank going to charge you for their services?

5. Features - Different online banks may offer different features for their customers. Make sure you are getting all the functionality that you need.

 

Compare the current interest rates of Internet savings accounts

Comparing savings interest rates will let you know how hard your money will be working for you while it sits in the bank. You can place money into ordinary savings accounts if you may need to access the money, or a fixed term Certificate of Deposit (CD) if your business will not need to draw down the savings for a certain amount of time.
Try: You can visit each bank's site individually to check rates, but it is much easier to look at sites with comprehensive interest rate comparison charts. Bankrate.com has a list of current interest rates of nearly every major online banking institution. To check CD interest rates by state, use this link to Interest.com.

Select the Internet bank feature set that's right for your business

Different banks offer different features to online banking customers. Even within a single bank, you may find more than one type of business account available. Compare different account types not just between different banks, but also within each bank.
Try: Check every bank's account features section. The Bank of America offers four different bank accounts that you can compare. Wells Fargo also offers a detailed list of account features.

Identify secure online banking options

When choosing an online banking institution, security should be your biggest concern. Just because a bank has an Internet site doesn't make them a legitimate or secure option.
Try: Check this list at the FDIC website to make sure the US banks that you are considering are FDIC insured. If your business is outside of the United States or has a need for overseas accounts, the International Association of Deposit Insurers (IADI) has a comprehensive list of countries that offer similar protections.

 

• When comparing interest rates of different online banks, make sure to note the difference between introductory rates that expire in a short amount of time and permanent interest rates.
• When comparing Internet checking accounts, make sure that you take note of transaction limits and usage fees.

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