The Five Important Questions to Ask When Choosing a Bank for Your Small Business
As your business grows, it’s likely that you’ll need to open an account at a local bank or credit union. These institutions offer many benefits and services that can help your business take off, but you should also be aware of their drawbacks and hidden fees so that you can avoid problems in the future. To choose the best bank for your small business, consider asking yourself these five questions before settling on an account with them.
Does my bank offer business accounts with better rates than personal ones?
Banks offer different rates depending on the type of account. For example, business accounts may have higher interest rates than personal accounts. It’s important to shop around and find the best rate.
Do I need overdraft protection or payroll deposit services?
If you do business in cash, this may not be an issue for you. If you take checks or debit cards as payments, however, then you need to take overdraft protection into account. Overdraft protection is when the bank pays your expenses (up to a certain limit) if you don’t have the funds in your account.
What will it cost me to use these services?
One of the most important things to consider when selecting a bank is the cost. You will want to know what kind of fees you’ll be paying and how much they are per month before signing on. Some banks charge fees just to use the ATM, while others may waive certain fees if you maintain a certain balance. You should also ask about any monthly minimums you might have, as well as whether or not there are penalties for overdrafts.
Is there an online banking component?
Online banking is a great tool for small businesses that need to move large sums of money without incurring costly fees. With online banking, you can transfer funds between your accounts or send money to someone electronically with the click of a button. Plus, many banks now offer mobile apps that let you deposit checks and manage your account on the go.
Can I pay bills from my account?
One of the most important questions you should ask yourself when choosing a bank is whether or not they offer you the ability to pay your bills directly from your account. This will save you time and money, as many banks charge fees for bill payments, and some may even have limits on how many payments you can make each month.
Are there ATM machines convenient to my business location?
This is an important question, as it will determine how much you have to pay in fees. For example, if your business doesn’t have a lot of traffic and is located in the middle of nowhere, then you may want to go with a bank that has more ATM machines. This way, you won’t have to worry about paying high withdrawal fees.
Is customer service available 24/7?
Some banks offer customer service 24 hours a day, 7 days a week. This can be helpful if you don’t have time during regular business hours. What is the length of their typical hold times? Some bank hold times are more than 15 minutes, which is frustrating when you need help right away. How many customer service representatives are there? Large banks may have hundreds of customer service representatives, but that doesn’t necessarily mean they’re able to provide better service.
Will they hold checks if I have insufficient funds in my account?
One of the most important considerations when choosing a bank is whether or not they will hold checks if you have insufficient funds in your account. If they don’t, it’s very likely that you’ll bounce the check and incur overdraft charges. This can happen even if you’re just depositing your paycheck with insufficient funds in your account!