The chore of finding the right bank to fit your business needs can be a daunting task. It is a necessary and important one though. As mentioned in our earlier article, "Keeping your Business Separate", it's imperative to keep your business and personal accounts separate. So, what are some things you want to consider when shopping around for your financial institution?
You have immediate needs like a place to keep your money, of course. But, you also want to think ahead to the future of your company. You want a bank that offers services that will give you a place to go as your business grows. For instance, does the bank have experts in investment options? It makes your life simpler to already have a place to grow with than to have shop around again when your needs change.
You may be inclined to do your banking with the big banks. The advantages there are that they may offer lower rates and more locations. The downside is that their fees tend to be higher. Smaller banks may not be as competitive but you'll likely save in fees and have a better chance at being approved for a small business loan. The other advantage of a small bank is the service is more personalized.
Credit unions have become an increasingly popular option. Being non-profit facilities, they offer lower fees than that of traditional banks. Also, their rates can be lower on loans and rates higher on savings accounts. Not all credit unions offer business loans though, so ask lots of questions.
Something that can really add up is bank fees. Of course, you want to avoid them all together, but life happens. When it does, is your bank going to make you pay through the nose? Big banks charge an average of $ 35 for each occurrence of an overdraft. Yes, there's overdraft protection, but there are still fees. Other fees may include a maintenance fee just for having the account or falling below a minimum balance requirement. You'll want to know ahead of time what a bank charges for fees. You do not want this to come as a surprise.
Speaking of fees … be sure to check availability of ATM's. It's frustrating to have to pay fees to take out YOUR OWN MONEY! If a bank has minimal locations for you to utilize their ATM, you will have no choice but to pay their fees. However, some banks offer free withdrawals from specific third party ATM's.
A feature that I absolutely love is mobile banking. It is life changing! The convenience of being able to deposit a check from my smartphone is invaluable. It is such a time saver. Definitely see if this is something your future bank offers. You'll be happy you did.
Sadly, something we do not do enough homework on in advance is customer service. We find out too late that the staff does not return calls in a timely fashion. Too often, we're put on hold for reasonable amounts of time to get the help we need. A great tip I saw was to test them out ahead of time. Send an email and see how long it takes for them to get back to you. You can also contact them through their customer service line to ask questions and see how long you have to wait. This will save you time later on.
Last but not least, investigate and ask opinions of your peers. You can also check forums online to see what other people had to say about the financial institutions you're considering. There is some homework to do. But, this is where you are keeping your hard earned money. I think you've agreed that this is a good investment of your time.