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When you are running a small business, every pound counts. Banking is an important thing for small businesses, both for themselves and customers. It is important for them to know that credit card and checking accounts can incur more fees – often at higher amounts – compared to individual accounts. This makes it important to compare the fees when looking for a bank that is going to meet your business needs.
Below are 10 ways of lowering and avoiding business account fees:
Maintaining minimum account balances
Most banks waive the maintenance fee on your business account (the fee ranges from 12-20 pounds a month) as long as you maintain the minimum balance. Sign up for online alerts because it will help you know anytime your balances are too low.
Linking your bank accounts
If you have more than one account in the same bank, you may qualify for a monthly waiver fee when you link those accounts together. Your business is going to have a higher combined balance. Other accounts that can qualify are money markets, savings, and certificates of deposits (CDs).
There are some additional features that allow you to avoid monthly fees. You should talk with the bank and find out about adding credit or debit cards and using payroll services – and see how using the services is going to affect the fees you pay.
Getting overdraft protection
Ask your bank whether they have overdraft protection through linked accounts. You can set a low balance alert through text messages or email. There are some banks that allow their customers to use one sign-in when managing accounts for multiple businesses, sync with accounting software, and transfer funds.
Asking about transaction and deposit limits
How many transactions do you make on your business checking account every month? There are some banks that are going to charge you for every transaction over the limit. The limit is usually around 200 or more (it can be even lower for products targeted to sole proprietorship and startups). Some are going to charge you when the cash deposit exceeds a set amount.
If you are making mostly cash deposits, then it might be a good idea to look for a checking account that has a high threshold before the fees come into effect. Go through your transaction history to see the number of transactions.
You also need to have a closer look at payment habits on your credit card. If you are regularly paying off every month, then you should consider getting a business credit card that has a higher annual interest rate with more perks. If you are carrying overcharges every month, then go with a card with a lower interest rate with a higher revolving limit because you are going to save in the long term.
Be careful of fees for additional cards
Are you planning on giving employees credit cards they can use in making purchases for the business? If this is the case, then look for banks offering additional cards at no extra cost.
Keeping an active account
When you spend a minimum monthly amount on your business credit or debit card (this can be as little as £250), some fees may be waived.
Avoiding transfer fees
If you move funds between accounts regularly, make sure you look for a bank that provides free ACH transfers. If you are dealing with international payments then ensure you can a good deal on fees suggest banking platform, virtual IBANs can be a good option here.
Comparing travel perks
Are you going to travel a lot? If you are, look for credit cards connecting the purchase to frequent flyer programs and travel rewards. Keep in mind that most airline-affiliated & travel business cards come with an annual fee. This is why you need to weigh the benefits and the cost.
Small businesses can still benefit a lot by developing a relationship with a bank, even though more and more banking is moving online. Your bank is going to be an important partner for your business. The needs of your business change as it grows. If you are just starting your business, think about the features and services you are going to need, not just now, but also in the years to come.