How to Choose the Right Bank for Your Business: Everything You Need to Know Before Opening an Account
Banking can be a financial burden for a startup. You have to constantly track expenses, manage cash flow, and deal with banks that charge high fees just to open an account. The process of finding the right bank for your business isn’t any easier as well. You need to think about several factors before you can confidently choose a bank: Is the bank offering competitive interest rates? Are they going to charge high fees or impose other penalties if you switch accounts? Do they offer services that are important for small businesses? Read on to learn more about choosing the right bank for your business.
What drives small business banking?
Banks are businesses, too. They do business by earning money through fees and interest. But when it comes to serving small business, what drives these financial institutions? First and foremost, you need to look at the banks’ focus on small business customers. What is their strategy? What are their goals?
Check if the bank is offering a good deal on interest rates
One of the most important steps when choosing a bank for your business is checking the interest rates. Interest rates are the amount you earn on your money. For example, if you put $10,000 in a safe deposit box earning a 4% interest rate, you would earn $4000 after one year. Let’s say, however, you choose a bank with a 2% interest rate. What happens if you have to wait for years until you can withdraw the money? The bank’s interest rate is irrelevant. What is relevant is what you get out of that $10,000. If you have to wait six months just to get your hands on the funds, you would be better off not having the account at all. So how do you choose the right bank? There are a few factors you should consider. First, find a bank that offers competitive interest rates. Interest rates can vary from bank to bank, and it’s important to find the one that offers the best deal for your business.
Think about the perks you require in a bank
Banks offer a variety of services to their clients. Some banks specialize in certain kinds of business and offer extended services at a discounted price. Depending on your requirements and the bank you choose, you can add value to your business by choosing certain services. This can help you save on costs and improve your operations. Let’s say, for instance, you need a business bank account that is suitable for online transactions such as bill payments. If you choose a bank that offers online services, you can add a customized web portal that allows clients to view and pay their bills online. This can save time and money.
Decide if the business needs an online or mobile banking platform
A big decision you have to make when choosing the right bank for your business is deciding whether you need an online or mobile platform. If you have to make frequent transactions, an online platform is preferable. This is because you would be able to sign in from any computer and make payments from there. If you have to work from multiple devices, an online platform would be ideal for you. But if your business does not require a lot of transactions or you prefer making payments from a mobile device, a mobile app is a good option. Some banks offer both online and mobile platforms. It all depends on your preference. Make sure you go with one that offers the best fit for your business.
Think about the staff’s personal and professional experience with your company
You can assume that the bank staff members know your company better than anybody else. This is because they deal with your business day in and day out. You need to ask yourself a few questions before deciding whether you want to choose any of the bank staff members as your banker. Does the banker know your business well? Is he/she experienced enough to help you? Does the person have a history of working with companies such as yours? These questions can help you in deciding who to choose as your banker. You can also ask these questions of the bank’s CEO or management team.
Summing up
Banking isn’t easy. You have to make difficult decisions, deal with complicated procedures, and follow strict guidelines. If you don’t fully understand the process, you can easily get overwhelmed and make a mistake. That’s why you have to take your time when choosing the right bank for your business. Once you have found the bank that fits your needs, make sure you have a good relationship with your banker. This can help you in a crunch if you ever have to make a difficult decision. One last thing you should keep in mind is that banking is an ongoing process. Start with one bank, but don’t be afraid to branch out once you get a better understanding of the industry.
