Choosing the best small business checking account to accommodate your banking needs is an important decision every business owner needs to make. Not all business checking accounts are created equal and the needs of small or medium-sized business can be vastly different from those of Fortune 500 corporations. The best small business checking account should simplify your banking needs, not complicate them.
Because choosing a small business checking account is so important, you want to make sure you spend time researching the options that are available. You should pick a checking account based on the type and location of your business, your transaction requirements and your cash deposit requirements. Here are a few of the top considerations for small business checking that you need to keep in mind before signing up for a new account:
- Cost of transfers and transactions. While a small business checking account may seem like a great fit, make sure you’re paying attention to the associated cost of money transfers, overseas transactions, and other potentially hidden fees.
- Quality of the online banking platform. Online banking is crucial for small businesses watching their bottom lines. The online banking platform connected your small business checking account needs to have up-to-date balances, transaction histories, and the ability to make payments at the minimum.
- Customer payment processing. While a business with a lower volume and higher transactions may just require a standard checking account, businesses with greater transactions such as e-Commerce stores may need a merchant account that allows customer credit card processing to easily integrate with your business checking account.
Small businesses are all about the bottom line. Without the right checking account, you could be spending more on your banking than intended. Do your research to find a small business checking account that meets your needs. Compare small business checking accounts from banks that are used to accommodating the needs of small businesses such as yours and in the industry that your business is in.
Types of Business Checking Accounts
There are 4 key areas to consider when determining what type of business checking account your small business needs. Have your expected minimum balance and average number of transactions per month handy as these are crucial in determining the type of business checking account your small business will be a best fit for.
- Basic: These types of checking accounts often have no monthly fee or a very low one. However, they also often have lower transaction and cash deposit limits.
- Premium: Nearly all businesses qualify, but the monthly fee will be greater than that of a basic account. The average balance to have fees waived, the transaction limit and cash deposit limit are often greater, however.
- Non-profit: Non-profit, sole proprietor and government entities are the only ones eligible. With low monthly fees, these types of accounts typically have a $5,000 minimum requirement for fees to be waived.
- Analyzed: Here, the monthly fee, balance for fee waiving, transaction limit and cash deposit limit all vary. You’ll need to discuss this type of account directly with a banker who will assess your needs as these accounts are more individualized.
When selecting your checking account, look for ways your business can benefit by opening an account with one business over another. As of July 21, 2011, a federal prohibition against the payment of interest on business checking accounts was repealed. As a result, business checking accounts can now accrue interest.
Take a look at whether or not the accounts you’re considering let you earn interest. Take a look at the types of accounts listed above and see if you meet your bank’s requirements for getting fees waived. While a great interest rate and no fees is the ideal situation, you may not be able to make both happen. Narrow down your options and calculate whether or not the interest or the waived fees will benefit your business the most.
If you're interested in a business checking account, you may also want to look at business credit cards.