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Opening an Account for a Small Business

By: Michele Godfrey-Watson, Assistant Vice President Commercial Services

Posted on 1/19/2022 9:00:00 AM

Small business owner reviewing financial documents

We have some suggestions of what you should consider when searching for a bank or credit union.

As a small business owner, it’s crucial to separate business spending and expenses from personal ones. However, choosing a business bank account that suits your needs is a little more complicated than just walking into your current bank and opening a second account. How you run your business and the type of business you operate greatly impacts what kind of business account you should open.

Look for a financial institution with an excellent reputation and a network that matches your business. Whether you're just starting your business or looking to find an account that supports your growing business needs, you want a bank or credit union that is supportive and reliable. The reputation of the financial institution you choose to bank with matters. Additionally, you should pay attention to how their services are delivered and if they provide a call center option, live chat, and online account availability to meet the needs of your business.

Choosing the right place to do your banking is just part of the equation. Let’s look at some other factors you should consider while searching for a financial institution to open an account for your small business.

small business owner calculating her current cash flow and expenses

Finding the Right Business Bank Account

1. What Are Your Needs?

In deciding to open a business bank account, it's essential to consider your business's growth potential and goals. What works well for another company may not necessarily work for yours. Consider how much cash flow will be moving in and out of your business account, and choose a scalable account, so it will continue to fit your needs currently and as your business grows.

Are you looking for specialized business services like taking out a small business loan or investment advice? It’s essential to consider what type of services your business will need before setting up a new business account.

2. What Are the Available Account Features and Services?

Business accounts differ on the types of features they offer when compared to your more traditional, personal accounts. Depending on your core business, you might need:

  • Remote check depositing availability
  • Online wire access and/or mobile access
  • Merchant Services
  • Bill payment services
  • Lending services

As your business expands, you might want to consider looking at business savings accounts and retirement accounts for you and your employees. Keeping all your business accounts in one centralized place can help you better manage your finances and also help with building a positive relationship with your bank or credit union.

3. What Are Their Service Fees?

Different business accounts come with varying fees. A few to keep a lookout for include:

  • Cash processing fees
  • Coin order fees
  • Transaction fees (electronic deposited items, ACH or ATM transactions)

4. Does the Bank or Credit Union Offer Branch Banking, Relationship Banking and Convenient ATM Access?

Another thing to consider, especially if you run a business that mainly works with cash, is where their ATMs and branches are located. Are they in locations that you can quickly get to, and if you need to go into a branch, are their hours convenient for you? Also consider if they offer night drop services if the hours are not convenient.

Choosing a bank or credit union with branches local to your home or office will allow you to get immediate help when needed. Some businesses prefer a physical branch location, while others prefer the convenience of a Relationship Manager or strictly online. These factors are very important when establishing a partnership with your financial institution and should always be considered.

5. Check for Ease of Integration

Chances are, you will need or already use accounting software to manage your business accounts, for example, online payroll or tax preparation software. It’s important to ask whether the bank's platform has easy-to-use integrations that can connect with the software you use to manage your business.

6. Credit Unions vs. Traditional Banks

Today, there’s little difference between credit unions and banks regarding convenience. You’ll find most credit unions are members of co-ops that allow them to give you access to your money through an extensive network of branches and ATMs nationwide. However, some key differences remain and may have an impact on your choice.

Traditional Banks

  • Are for-profit organizations
  • Ideal for cash-heavy enterprises that require in-person banking
  • Full range of services

Credit Unions

  • Non-profit organizations
  • Smaller than traditional banks allowing them to offer more personalized services for their members
  • Offer similar products and traditionally offer lower interest rates and more manageable access to lending

At a bank, you are just a customer; at a credit union, you're a member!

The Bottom Line

The right business account is one that checks off all the right boxes for your business. Consider the services you need, then factor in management fees and take a look at their interest rates before deciding. Choosing an institution that has your best interest in mind and one that can grow with your business along the way, will save you the hassle of having to find a new bank in the future.

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