How to Choose the Right Business Banking Account

Aside from getting all of your paperwork filed properly, choosing the best checking account for your small business is probably the most important decision you’ll have to make in the beginning stages of your business.

So where do you start and what should you look for?  I’ve put together a list of items I looked at before I finally settled on my business’ checking account.  While this certainly isn’t a very intensive list, it should be enough to help get you going down the right path.

Features:  I think it goes without saying, but there are a wide range of features for business banking accounts.  Some of them aren’t going to be important to you, but some of them are going to be make or break deals.  Make sure you do a good job looking at a bunch of different accounts from several different banks in order to determine what’s available to you.

For example, after doing a bunch of research, I determined that I wanted a bank account that gave me a Visa debit card, gave me at least 100 free transactions per month, had free online banking and bill pay and would allow me to apply for a small business credit card.  Thankfully, because of all the options available to me, I was able to find my perfect account. 

Initial/Minimum Balance:  For most of us who run small businesses, we tend to do so while keeping our regular 9 to 5 jobs.  Sure we hope that one day our small business will take off and replace our regular income, but in the meantime, things are probably going to be pretty low key.

That also probably means that we don’t want to have to sink a whole lot of money into the business right away, especially if we don’t have a lot of discretionary income to begin with.  That being said, make sure you take the required minimum balance into account when deciding on who you’re going to do your banking with.

When I was researching different banking accounts I saw a wide variety of required minimum balances – ranging from $0 to $5,000 or more.  And on top of that, the there was also a wide range of monthly penalties for dropping below the minimum balance – ranging from $5 to $25 per month.

Convenience:  This should pretty much be a no brainer – you’re going to want to bank somewhere that is easy for you to get to.  That way, if you ever need money or need to talk to one of the account reps, you don’t have to make a special trip that’s out of your way.

And you don’t have to resign yourself to one of those national banks in order to make sure your banking is going to be convenient.  Considering most small businesses aren’t unleashed on a national scale, you can probably get away with using a smaller local bank if it fits your other needs.

Room to Grow:  As I stated earlier, many of us run our small businesses as side projects with the hope that they will grow into something bigger.  Well, what happens if they do?  Will your bank have other accounts available to you that will cover your new needs?

Granted, you can always switch banks, but I think it’s nice to be able to stay with the bank that helped you grow up as a businesses and where you’ve developed banking relationships.

I know that this isn’t the be-all-end-all of business banking check lists, but I think it should be enough to get you started.  As someone who recently opened his very first business checking account, I can tell you that you have to make sure you do plenty of research before you finally settle on an account.

That being said, don’t beat yourself to death over it.  Figure out what you need, what you’d like to have (but might not be deal breakers) and then go from there.