While starting a new business, there are many things one needs to look into. This includes setting up the company and making sure that you have all the necessary paraphernalia and equipment to get going. However, do not ignore another important aspect – accounting. You would be surprised at how different your bank accounts can be even if they are under the same name. Take time to go over these 15 important questions regarding business bank accounts before you take the plunge.
15 Questions To Ask Before Setting Up Your Business Bank Account: A Helpful Guide
- 1 What type of bank is it?
- 2 How many branches does it have?
- 3 Do I want a personal account or a business account?
- 4 Will my account be considered “business” or “commercial”? Why?
- 5 (If business account) How many free ATM withdrawals do I get every month?
- 6 (If business account) How much will additional ATM withdrawals cost me?
- 7 Does the bank charge any fees if I use a different bank’s ATM?
- 8 How much are monthly maintenance fees?
- 9 Are there any minimum balance requirements to avoid monthly maintenance fees?
- 10 What is the average transaction time — how long after I make a deposit before funds are available in my account, and how long after I pay a bill before it leaves my account?
- 11 Can I access my accounts online? If so, is there an online fee?
- 12 Can I order checks online, through the mail, or over the phone? If so, is there a fee for this service?
- 13 Any other fees for operating my account(s)? If so, what are they and when do they apply? (e.g., returned check fee, stop payment fee)
- 14 If I receive overdraft protection, what are the details of that service and how much does it cost per month and/or per overdraft?
- 15 Conclusion
What type of bank is it?
The first step in choosing a bank is to decide whether you want an online-only account or one with a physical branch. If your business needs a physical location, then making sure they have brick-and-mortar locations close to where you live or work is important.
If you’re planning on going exclusively online, then the next thing to consider is what services they offer and how much those services cost.
There are tons of banks with different features and perks depending on your needs. Some might offer great savings rates for small businesses while others offer loans at competitive interest rates for large companies looking to grow their operations quickly or run an ad campaign that requires expensive equipment purchases. The best way to learn about these things is by talking directly with someone from each one so they can explain all its advantages before deciding which one fits best within your budget.
How many branches does it have?
You should also ask about the number of branches. A bank with a large network is better than one that has just a few locations.
The next question you should ask is how far away are these branches? You don’t want to have to drive far just to make an appointment at your bank or open an account, so it’s best if they have a branch near where you live or work.
You should also find out how many ATMs does your bank have, and how many free ATM transactions do I get per month? It would be even better if there were no limits on the number of free transactions because then it wouldn’t matter how far away from me was my nearest ATM machine—I could still use it for free.
Finally, find out if there are any limits on the number of free transactions I can make because this can affect whether or not I choose this particular bank over another one with similar features but lower fees for making withdrawals from its ATMs (also known as “debiting from its own machines”).
Do I want a personal account or a business account?
The answer to this question will depend on how you plan to use the account. If you want to use the account for business expenses, then yes, a business account is better suited for what you’re trying to do.
However, if you plan on using it for personal expenses as well (like paying rent or buying supplies) then it may make more sense to open a personal account instead of a business one. Business accounts have higher limits and therefore lower fees than personal ones—so if that’s important to your business model, it’s worth considering whether or not opening one is worth the extra expense upfront.
Will my account be considered “business” or “commercial”? Why?
Business accounts are typically more flexible than commercial accounts, but they also come with their own set of requirements. Businesses that want to open up a bank account that doesn’t meet the requirements for a business account may end up with a commercial account instead. This can be due to the type of company you’re running, its size and structure, what type of transactions you’ll be doing with your bank, who’s authorized to make changes to your account (if anyone), etc.
It’s important for entrepreneurs in the startup stages of their business planning process to understand which type of account will work best for them so they know what kind of documentation they need when applying for an account at different banks and if there are any other special considerations that need attention before opening an account with one particular institution.
(If business account) How many free ATM withdrawals do I get every month?
If you are setting up a business bank account, this is a question that will be important to you. You want to know what the limits are on your free ATM withdrawals and whether or not additional ones cost money. Keep in mind that some banks may charge for using an out-of-network ATM.
In addition, monthly maintenance fees may apply if the balance in your account remains below a certain amount or if you don’t have direct deposits coming into the account often enough (this usually varies depending on how much money is in there). The other fees associated with using ATMs can also vary widely between different banks, so it’s important to look into them before signing up with one specific institution.
It’s also important to find out how long it takes for funds transferred between accounts through ACH transfers or wire transfers (if applicable) because these can take longer than online banking transactions made within the same bank network as well as faster than transferring funds through checkbooks issued by both institutions used together (but only when dealing directly with someone else who has access).
(If business account) How much will additional ATM withdrawals cost me?
If you are opening a business account, be sure to ask how much each additional ATM withdrawal will cost. Some banks have flat fees while others charge more per transaction.
Banks also vary in the number of transactions they allow and where they are available. You might also want to consider whether or not you’ll need an online banking option for your business. If so, find out what type of fees come with this service before signing up for it—and remember that there could be monthly charges as well as per-transaction costs too!
Does the bank charge any fees if I use a different bank’s ATM?
This is a great question to ask, especially if you plan on living in an area with limited ATM access. Some banks will charge a small fee for using another bank’s ATM, and others won’t. Some banks charge based on the number of transactions you make at other banks’ ATMs and some just charge one flat fee per month.
You should also ask about any fees associated with international transactions, as these can be quite high depending on where your business is located.
How much are monthly maintenance fees?
One of the first things you should ask is what kind of maintenance fees are associated with your bank account.
These types of fees can be anywhere from $5 to $10 per month, and they’re a common part of the banking world. Some banks will waive these fees if you maintain a minimum balance amount in your account, but some banks require specific amounts just to avoid them altogether.
If this is something that concerns you when researching potential bank accounts, make sure to ask about it during the conversation so that there are no surprises later on down the road.
Are there any minimum balance requirements to avoid monthly maintenance fees?
One of the most common bank fees is a maintenance fee. This applies if you don’t keep a minimum balance in your account.
If you do not maintain a certain balance, your bank could charge you monthly or at least quarterly. The amount varies by institution and sometimes even within an institution depending on the services offered by that specific branch of the bank.
For example, if you don’t maintain a minimum amount of $10,000 in your checking account with Wells Fargo, they will charge $12 per month (as of January 2018). If instead you have an active business credit card with Bank of America and don’t keep at least $4,000 in combined average monthly balances across all BofA deposit accounts (savings & interest-bearing checking), they will charge $15 per month for each such account beginning in July 2018 (as stated on their website).
What is the average transaction time — how long after I make a deposit before funds are available in my account, and how long after I pay a bill before it leaves my account?
When you’re setting up a business bank account, it’s important to ask how long it typically takes for deposits to clear and how long it takes before they can be withdrawn. You’ll also want to ask about the average transaction time when making withdrawals, paying bills, and making electronic payments.
The same applies if you’re thinking of switching banks: you should take into account the amount of time that any payments or transfers can take before moving forward with opening an account with a new institution.
Can I access my accounts online? If so, is there an online fee?
The first question to ask is whether your bank charges a fee for online access. If so, it’s important to know how much that will be because you’ll want to take this into account when making your decision. Most of the time banks charge around $5 per month for an online banking account, though there are some exceptions where they don’t charge anything at all.
If your bank doesn’t offer full-service online banking through a computer or smartphone (usually called “web” or “mobile”), there are still ways you can manage your accounts without being connected at all times.
For example, many banks have automated phone systems that allow customers to make deposits and withdrawals from their checking accounts over the phone in addition to accessing their balances through touch tones on their phones’ keypads—this makes it possible for anyone with access (even if it’s just yourself!) check on transactions and even make transfers between accounts within certain limitations (such as only during normal business hours).
Can I order checks online, through the mail, or over the phone? If so, is there a fee for this service?
While checking availability is usually not an issue, check costs can vary. While some banks charge a per-check fee for all orders, others have tiered pricing based on the number of checks you order in a given time period.
If you’re ordering a large number of checks—for example, if your business has multiple locations or employees who handle payroll—it may be worth inquiring about volume discounts and other pricing options.
If there’s any doubt as to whether or not your bank offers online ordering and/or shipping services, don’t hesitate to call them up and ask!
Any other fees for operating my account(s)? If so, what are they and when do they apply? (e.g., returned check fee, stop payment fee)
- What are the details of the overdraft protection service? This can be a useful service that allows you to manage your account more easily, but it has associated fees. Ask about them before signing up for this option.
- What are the fees for overdraft protection? These vary by bank and how much you’re trying to overdraw on your account. If they’re too high, consider keeping some cash in your pocket or at another bank. You could take out a small loan if you need extra capital until payday arrives or ask friends and family members for help getting through an unexpected expense.
- What are the fees for stopping payment? To stop payment on an item that has already been paid (e.g., check or debit card purchase), it’s typically just $15-$25 per request—but double-check with your bank first!
If I receive overdraft protection, what are the details of that service and how much does it cost per month and/or per overdraft?
If you’re planning on using overdraft protection as part of your business bank account package, be sure to ask about the details of that service. It’s easy to overlook this question; however, it can make a big difference in how much money you’ll have access to when making deposits and withdrawals.
Here are some questions to ask:
- Is overdraft protection included in my package or am I paying for it separately?
- What is the cost per month or per overdraft? This may vary depending on the number of authorized transactions and which ones they’re being used for (whether they’re for cash withdrawals or checks).
- What steps should I take if there are insufficient funds in my account? For example: Will I be charged interest immediately at an increased rate (and how much)? Or will there be fees associated with each transaction that causes me not enough funds in my account (and how much)?
You should always know where your money is going and how much you have to spend. It’s important that you keep track of your expenses so you can make smarter decisions in the future. You also need to make sure that everything is being done legally, from what taxes are owed on a particular transaction all the way down to how much interest they charge on loans.
Your bank will help answer these questions and more as you set up each account with them. We hope this list has helped give some insight into what questions may be asked during these meetings so that when it comes time for yours, all goes smoothly!