When you first set out down your entrepreneurial path, there are a lot of things to think about and become overwhelmed by, especially when it comes to finances and keeping your fledgling enterprise’s books balanced. That’s why choosing the right bank is so important in maintaining not only your financial well-being but your sanity too. But with all the banks in the world today, both brick and mortar and online, trying to decide which bank is the best for you can also be somewhat daunting. Here are my top 5 tips for choosing the right bank for your business:
- Determine what your actual banking needs are: Of course, there will always be those unforeseen one-off events that might cause a need for different types of funding or transactions, but for the most part you should be able to predict what your basic fiscal service needs will be. The following list highlights considerations
- 24-hour banking services
- ATM location availability and associated usage fees
- Types of accounts needed – checking, savings, overdraft protection, and credit
- Are cash deposits necessary?
- Ability to establish automatic, recurring payments
- Ability to receive different forms of payments from clients (multiple currencies included)
- Physical location or online only: There is a new crop of banks popping up on the internet that have no physical locations apart from where their network servers are housed. These banks exist only in cyberspace but command just as much financial firepower as the traditional brick and mortar banks do. A benefit of the online only banks is that because their overhead costs are so low, they can convey those savings on to their customers through lower fees and costs, or no fees at all in some instances. Although they do have traditionally fixed branch locations, Capital One’s Spark Business Checking accounts are one of the best digital banking accounts available today.
- Big or small, size matters: Depending on where your business is located, the size of your bank could make all the difference in the types of services they offer and the level of customer service provided. While large, well-known banks might offer more services than your local bank and trust or credit union, they often view their customers as nothing more than numbers and dollar signs. Smaller banks, however, are able to get to know their customers and their needs on a personal level.
- It’s not all in the name: Sure, everyone has heard of Bank of America and JPMorgan Chase, but banking with a major corporate bank doesn’t ensure better service or security. It is a sad reality that in today’s world, well-known, highly commercialized financial institutions and their clientele often find themselves the targets of hackers, data breaches, and phishing scams. It’s rare that a small bank draws the attention of nefarious players, and most of these low-level institutions provide the same FDIC backing their larger counterparts do.
- Fees, fees, and more fees: No matter where you think you might want to bank, there are going to be costs associated with almost every service provided, and they all contribute to your business’s total overhead. These costs can be based on how many transactions are allowed per month, per account, or come in the form of monthly account “maintenance” fees. Obviously, you’ll want to save money wherever you can but discounting a bank based solely on their transaction fees might not be in your best interests.
The adage, “You get what you pay for” tends to ring true in banking, and sometimes paying a few dollars more per month for a more robust suite of services can actually help your business in the long run. Determining whether the costs associated with doing business with a particular institution is a decision you’ll need to consider carefully while scrutinizing the costs per service.