Business Bank Accounts - Key Factors to Consider
Key Factors to Consider
Business Bank accounts generally are designed to do the same job, but depending on how you'll run your account, you will be looking for different things in terms of what your account offers.
Bank Charges
Most of us are used to free banking as individuals, but bank charges are the norm for business accounts. Accounts for clubs and charities do tend to offer free banking. Its well worth understanding exactly what accounts charge for and what they don't. For example some accounts charge to pay in cheques (or make payments by cheque) and action direct debits, others don't.
Credit Interest
Credit interest is available of some business credit accounts, but is usually a pretty low rate. Business deposit accounts offer better rates of interest.
Overdrafts
A decent overdraft facility can be a key benefit for businesses when cashflow isn't easy to predict. You'll want to have an account which charges a low rate for its authorised overdrafts and many business accounts allow you to negotiate this rate with your bank. You might also want to look at what rate you'll be charged on an unauthorised level of overdraft as these rates are typically around the 25 - 30% mark, although lower rates are available.
Standing Charge
A number of business current accounts require a regular monthly or quarterly standing charge. This normally works out around £15 to £20 per quarter, but a good number of accounts don't have this fee at all.
Access to the account
Make sure you choose an account which you can access in the way you need. Some accounts are only accessible via internet and phone, while others allow you to deal with your account through branches and even the Post Office. This can be pretty handy for withdrawing money and paying in cheques. Some accounts are operated solely by post.
What to do Next
Now you're aware of all the key things, take a look at the things to watch out for when choosing a business bank account. Then check out the latest bank account best buys to see the latest rates and deals on offer.
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