What to Look for in a Small Business Bank Account
Separating personal and business banking is important for simplifying the management of your business. For most small businesses, having a business bank account is crucial for running a company professionally and successfully.
Finding the right bank that caters to your small business needs is quite simple. Most Canadian banks offer affordable and flexible options for small-business banking. However, there are five reputable banks in particular who have competitive rates and a variety of business banking choices.
The five biggest and most reputable banks are Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CIBC). Though these are the top five banks in all of Canada, it is wise to seek out other financial institutions as well to find the right fit for your business.
Here are several things to look for in a business banking account:
Does your business bank account allow you to...
grow your existing funds? What are the interest rates like? Are you able to separate your funds in order to have a healthy cashflow and set funds aside? Are you able to save your funds and watch them increase to use in the future for business growth or unexpected costs?
easily send and receive business payments? Are there fees for each transaction made through the business account? Are transactions restricted with a limited amount permitted per month? Are you able to use an online banking portal for a range of online payment options, such as direct deposit and e-transfer? Are transactions simple to make, saving you time and money?
make scheduled and/or automatic payments? Is it easy to send out timely payments to your suppliers, including cross-boarder payments? Are you able to set up automatic and reoccurring transactions for payments, such as payroll and taxes?
conduct business at an affordable rate? What is the monthly fee for a business banking account at any given institution? Most small business bank accounts have a monthly fee of $5.00 - $6.00. Is there a minimum balance required in order to obtain a business account? Are there any other “hidden” costs, such as transaction fees for making deposits or e- transfers?
work remotely? Is the online banking website user-friendly? Is a mobile app available with your business banking account? Does the online banking portal allow for a range of online payment options? Does it cater to all your business banking needs so that you can conduct business as usual anytime, anywhere?
Find the answers to these questions before opting for a particular business banking account. Each banking institution is slightly different and offers a variety of business banking packages. Based on the above principles, determine which bank and business account is both cost effective and flexible towards your particular needs.
Remember that you can always talk to a financial advisor from a banking institution if you have any questions or feel unsure about what choice to make. Quality communication with your bank is the most important factor to consider as you look for the right business banking account.
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