How to Select the Right Checking Account for Your Business
Still, choosing the right checking account for your business isn’t always simple, especially if you process lots of cash transactions. To help you select the option that best suits you, we’ll outline what you should consider when selecting a checking account.
Four Steps to Selecting a Business Checking Account
1. Know Your Business Checking Needs
Not all checking accounts are the same. Each one has different fee structures, transaction limits, and other factors to consider. So, you should understand exactly what your needs are before you start shopping for a checking account.
To do so, figure out the number of transactions you expect to make each month, and estimate the amount of cash that you plan on depositing. Also, you should determine the minimum balance you plan to have in the checking account.
If possible, make estimates about how things will change based on seasonality. For example, if you run a restaurant, you may need to process significantly more transactions during certain times of the year. That seasonal change in transaction volume will affect how much you pay in fees, so you should be aware of it.
2. Evaluate Different Fee Structures
Fees for business checking accounts are generally based on cash deposit and transaction limits. In other words, you’ll pay based on the amount of cash you deposit and the number of transactions you make.
According to NerdWallet, some banks will have cash deposit limits as low as 3000 dollars. That means, if you exceed that limit, you’ll pay a fee based on the amount you deposit over that limit. Essentially, the more you exceed the limit, the more you pay in fees.
The same goes for transaction limits. When you exceed the transaction limit, you’ll pay a fee for each transaction over the limit. Additionally, some banks may charge monthly maintenance fees, which is something you’ll need to look out for.
3. Consider Your Other Banking Needs
If you’re going to require services other than a checking account, you should ask about those as well. Banks that charge maintenance fees on checking accounts will often waive those fees if you use their other services.
Beyond the fee savings, though, it’s important to see what other services the bank provides so you can set yourself up for the future. Even if you’re only interested in a checking account now, you may find yourself needing other services down the road. Take the time to consider where your business might be in the next couple years and the services you might require.
4. Don’t Forget About Credit Unions
While they’re generally smaller and have fewer branches than a national bank, credit unions are known for their customer service and lower fees. Plus credit unions can have higher deposit limits than most banks. For a cash-heavy business, a high deposit limit could mean huge savings.
Conclusion: Take Your Time and Find the Right Fit
It’s tempting to rush through administrative processes like setting up a checking account. After all, administrative tasks aren’t what you envisioned when you set out to build your dream. Unfortunately, opening a checking account for your business is a chore you can’t avoid.
Since you have to do it anyway, you should do it right. Once you’ve completed the steps outlined above to identify your needs, take the time to compare a few different options. When it’s all done, you can focus on running your business while saving on fees and enjoying the convenience of working with a bank that suits you.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.