Choosing your bank is one of the biggest decisions you'll make early on as a business. This is an easy decision to take too lightly, and choosing the wrong bank can waste your time and potentially expose you to unnecessary fees or bottlenecks. Each bank will offer slightly different products and pricing, and it can be a difficult process to figure out which one(s) will be best for your business. As someone who came from the banking industry, here are a few tips on how to choose the right bank for your business.
Our first piece advice is choosing a local bank first. This provides quick access to cash, cashier's checks, and a more personal banking relationship which can be a serious boon if you ever need a business loan. The more your local bank knows you, the higher the likelihood you can get better rates and better service overall. It's totally okay to use non-local banks as well (online only or major banks unavailable near you), but we recommend establishing with a local bank first. Once you have that, then it's okay to explore the online or non-local banks. These might have different beneficial products you don't get at your local bank, including higher interest rates and additional features.
Our next suggestion is to shop around. It's easy to settle for the bank you have your personal accounts with, but they may not offer the optimal business products for you. We suggest shopping at least 3 different banks for their products, services, and fees. Most banks have a lot of information on their websites, but for more in-depth details phone calls or showing up in branch always helps. Shopping, for local especially, can help provide you insight into a bank's customer service before you commit to banking with them.
Compare each bank's account types for what you need first and foremost. Banks usually have at least 2 separate business account products for different sizes of business, and fees can vary drastically between each. Many banks even offer small businesses accounts with no monthly service fees at all, which can be a great advantage for new businesses without established or consistent income.
Fees to keep an eye out for are:
1. Monthly Service Fees (charged each month, regardless of activity)
2. Excess Cash Fees (charged if you process more than X amount of cash)
3. Excess Transaction Fees (charged if you process more than X transactions)
Lastly, something you'll really want to consider is business online banking. Online banking for businesses usually differs from personal online banking. Businesses are granted (either freely or for a small fee) additional features that can make running your small business a little easier. Some of the most important things would include ACH and Wire origination, Bill Pay, enhanced security and protection against check/ACH fraud, and remote check processing.
Another important feature you should look for is multi-user access. This feature allows businesses to have multiple people access the business' online banking with separate logins and separate permissions. You can set read-only users, full admin users, and everything in between. This is great for things like allowing your accountant or bookkeeper access to your transaction history, without needing to give them access to things like transfers or wires or ACH processing. Or you can customize access for your internal accounting or business staff on a per-individual level.
I hope this guide proves helpful. If you have any further questions regarding finding the right bank for you, feel free to message us via our contact & booking page.