Did you know that there are now 33.2 million small businesses in the United States? And while they have few to no employees, they still comprise 99.9% of all U.S. firms.
If you’re new to that crowd or plan to join it, one of the most crucial things you need is a business bank account. It may even be mandatory in your case, such as if you operate an incorporated business.
But even if it’s not a legal requirement for your firm, it still pays to open the best business bank account.
This guide lists the top tips for choosing bank accounts and why you even need them, so keep reading.
Table of Contents
Determine the Bank Account Type You Need
A business bank account can be a checking, savings, or merchant account.
You can use a checking account for business finances, such as writing checks to pay vendors. You can also use it to accept and make electronic fund transfers. It can also come with a free debit card, which you can use to withdraw cash at ATMs.
A business savings account lets you save an emergency fund and earn interest on it. It also simplifies money management, separating your working capital from savings.
A merchant account allows you to process payments with debit or credit cards. It comes in two types: low-risk and high-risk merchant accounts.
Low-risk merchant accounts are often for businesses accepting only one type of currency. They’re also for firms with monthly debit or credit card payments that usually don’t exceed $20,000.
High-risk merchant accounts are for companies specifically deemed high-risk. According to Getbankcard.com, a business can be “high-risk” because of its industry. It can also be due to having a history of chargebacks or poor personal credit.
If you want to be able to accept international payments, you need a high-risk merchant account. Likewise, you need one if banks and payment processors regard you as a high-risk business. Without it, you can’t get paid in foreign currencies, debit, and credit cards.
Mind the Account Maintenance Requirements
Most business checking and savings accounts have minimum deposit and balance requirements.
Checking accounts often have lower limits, as they’re for regular expenses. However, most don’t accrue interest, unlike savings accounts.
Consider opening accounts with low minimum requirements if you have a smaller capital. That can make it easier to stay above the threshold and avoid below-balance charges.
Then, once your company finances have increased, open a savings account ASAP. Contribute to this account as often as possible to build it quicker with interest.
Open Accounts With Low Transaction Fees
Americans waste $29 billion yearly in excessive charges, also known as junk fees. Bank charges are among the leading culprits for such waste.
Many banks charge fees for each transaction, such as wire transfers to other banks. They also have fees for using out-of-network ATMs, excessive usage, and overdrafts. Attempting to withdraw an amount that exceeds what’s in the account can also lead to a penalty.
The good news is that many of those charges are avoidable; for instance, not all banks charge all those fees. For that reason, it pays to compare banks and the prices they set for using their services.
Some banks even waive fees if a business account owner meets specific requirements. For example, you may not have to pay wire transfer fees if you have a personal account in the same bank.
Check for Available Incentive Programs
Banks often offer incentives like cash bonuses to get businesses to open an account.
Cash bonuses are one-time perks that usually require a direct deposit with the bank. Another typical requirement is to keep a set amount of money in the account untouched for a few months. Still, if you meet these criteria, you can earn several hundred to a few thousand dollars.
The terms and conditions differ, but the more you deposit, the higher the bonus. Likewise, the longer you can keep the money in the account, the better the perk.
Another offer to look out for is a higher introductory interest rate. For example, suppose a bank usually pays a 2% interest on a savings account. However, with the initial promo rate, it can go up to 3% or higher for the first few months or even the first year.
Feature-Rich Mobile Banking App
Mobile banking apps have become a top account management tool since the pandemic. That’s according to 44% of bank customers surveyed in 2021. That figure also shows an 11% increase in bank app users before the pandemic.
However, while most banks now have mobile apps, some have more features and are more intuitive. For example, the best ones allow you to deposit checks by taking their photos and uploading them. They also process QR code transactions, cardless ATM withdrawals, and multi-factor authentication.
If you want those features, confirm your prospective banks offer them in their apps.
Consider the Bank’s Credit Services
Some banks lower their credit requirements for existing customers. For example, they may require fewer documents if a business account holder wants to apply for a loan. They may also pre-qualify business account holders with good records for credit cards.
Banks also usually offer their existing business customers better loan or credit rates. For instance, you may get interest rates lower than a bank’s new clients if you’re a long-term account owner.
It’s wise to consider those factors, especially if you think you’ll need a business loan in the future. Ease of access to credit and financial help allows you to grow your firm. It can also be your business’s saving grace during times of low revenue or emergencies.
Open the Best Business Bank Account Today
As you can see, the best business bank account can help you save money by charging fewer, lower, or no fees. It can even grow your initial deposit with cash bonuses and higher interest. And, of course, it has a mobile app that lets you manage your accounts with a few taps of your phone, wherever you are.
So, keep all those factors in mind, and open the best bank account for your business today.
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