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10 Tips for Choosing the Right Bank Account for Your Small Business
Published on Sep 30, 2010
Read '10 Tips for Choosing the Right Bank Account for Your Small Business' at 'Time to Start Up,' the small business blog by BizFilings.
Opening a business bank account and obtaining a business credit card are factors that come into play for every business startup checklist.
Nurturing your hard-earned money in a savings account isn't as fast and easy as it was in the past. In choosing the right place for you to put your money, there are a number of factors to consider, especially in today's economic climate.
Shira Levine , business writer, offers these excellent tips in choosing the right bank account for your business.
Search online. Levine advises shrugging off any fears of online banking and accepting that these days the online experience is "as safe as the in-person visit. Online banking offers the same services with even higher interest rates." Additionally, she added that oftentimes minimum balances aren't required.
Protect your money. Levine recommends depositing your money into a savings account as a safe option. "A good savings account insures up to $250,000 under FDIC."
Hunt down competitive interest rates. Levine points out that a savings account makes sense when targeting liquidity and higher interest rates. If you just let your money sit idly under the mattress, you are not receiving a rate of return like you do from a savings account.
Figure out how quickly you need your money. Banks have different limitations and transfer times. Decide on one that suits your goals.
Select accounts with amenities. What else can your bank offer you besides rewarding interest rates? Levine cites that "many banks and credit unions offer add-on benefits. Look for perks like free or discounted safety deposit boxes, free payroll processing and for the culturally curious: free admission to museums or discount tickets to theme parks."
Proceed with caution. You've heard the saying, "everything comes with a price." Well, that statement certainly applies to banks. Keep in mind that a bank is a business trying to sell a product - just like you. Be cautious of limited-time promotions. Read the fine print and get all the details.
Large and in charge. "Big online banks can provide excellent savings. ING Direct Orange Savings Account and HSBC Online Savings Account are great options (although their rates aren't terribly impressive lately). Consider Capital One InterestPlus. It earns 1.6 percent with a quarterly bonus of 10 percent of the interest earned in the previous quarter," Levine advises.
Investigate high-yield savings accounts. Savings accounts with high annual percentage yields are ideal for business owners. However, Levine warns: "That means you have to stay on top of things and be fiscally responsible though. Scoring a high-yield savings account may require you to keep a high balance over a period of time, limit transactions and maintain more than one account. Research the high-yield savings account offered at the banks you check out."
Consider a hybrid account. The CapitalOne High Yield Money Market Account is an example of a hybrid account. You can pay earn interest - like it's a savings account - while paying your bills - like it's a checking account.
Research Deposit Accounts. Levine recommends checking out http://www.depositaccounts.com/ to discover the best rates around. Over 25,000 rates from local and nationwide banks are monitored.
Are there other factors to add to this list? What banks have you found to be most helpful for your small business?