Business Banking. Checking Accounts
While it’s not illegal to run a business without a bank account, it is hard to find a business nowadays that doesn't have a basic checking account. Most business operations will be run through the checking account. Business owners can deposit money, pay their vendors, receive transfers etc. Larger businesses with more complex operations will most likely open multiple checking accounts, such as 1 for daily operations, 1 for receiving merchant services deposits and 1 for paying employees. The main advantages checking accounts have over savings accounts include the ability to write checks, unlimited withdrawals and a linked debit card. On the other hand, checking accounts rarely pay interest, have typically higher fees and are more exposed to possible fraud.
When choosing a bank, businesses should consider the following:
The fees: typical fees on checking accounts include monthly maintenance fees and the requirements for waving them; transaction fees, as banks often start charging for transactions after a certain limit was met; ach and wire transfer fees both incoming and outgoing.
Location: It is advisable to choose a bank with a physical presence in the company's neighborhood, especially if cash and check deposits are planned. Even if not, there are still many issues that can be resolved much faster with visiting the bank versus using phone or online banking.
Convenience of online banking: the ease of use, more features, high mobile deposit and transfer limits are among things making the online banking experience the most efficient.
Other business products: it is more convenient and rewarding to keep different banking products together since banks often offer loyalty rewards, allow immediate funds transfers between accounts held with them and consider relationship when decisioning loan applications. Making sure the bank offers other products such as credit cards or term loans will help the business in the future.
Foreign person friendly: if the business has owners abroad, many banks may refuse or make it unreasonably difficult to open accounts. This consideration will insure smooth operation of the business banking remotely. While not endorsing any bank, neo banks tend to be friendlier towards foreign entrepreneurs.
Welcome bonuses: Many banks offer a one-time cash reward for new accountholders.