Picking the right business bank account helps to protect your finances and streamlines your operations.
There are several key factors to consider and weigh, including hidden transaction fees, account management tools, and whether FSCS deposit protection is provided.
With several essentials to evaluate when choosing a business bank account, here’s what to consider.
7 Things to Look for in a Business Bank Account
When you’re looking at a business bank account, think about the following before you commit to one.
- Account Fees and Charges
Firstly, you’ll want to look past the fee-free introductory periods and instead evaluate the ongoing monthly fees, specific transaction costs, and charges for international payments.
- Accounting and Tool Integrations
When it comes to your bank account, it should be something that actively saves you time on admin. You should look for accounts that integrate seamlessly with your preferred accounting software. This could be QuickBooks, FreeAgent, or Xero.
This is a great way to automate bookkeeping, to track expenses, and to simplify VAT reporting
- Transaction Limits and Allowances
Growing businesses will often experience fluctuating transaction volumes. You’ll want to ensure the bank’s monthly deposit and withdrawal limits align with your cash flow so that you can avoid any sudden account freezes, as well as excess penalty fees.
- Overdraft and Credit Facilities
Cash flow isn’t always perfectly predictable, and cash flow problems can contribute to the downfall of the business if you’re not careful. Check if the bank offers business overdraft facilities or short-term credit options. Knowing what interest rates and arrangement fees apply is good to be aware of if and when you need to dip into it.
- Multi-Currency and FX Capabilities
If you do business with international clients or purchase goods overseas, then you should look for accounts that offer multi-currency wallets, as well as low fees for cross-border transactions.
- Team Access and Expense Cards
If you’re looking to scale your business, then you’ll need some built-in tools for your team. You’ll want to look for certain features, like multiple debit cards for staff. Role-based approval workflows for outgoing payments and the ease of tracking employee expenses in-app.
- Deposit Protection
It’s important to make sure that all of your hard-earned revenue is secure if your current banking situation collapses.
In the UK, you’ll want to look for institutions that are backed by the Financial Services Compensation Scheme. This will typically protect your eligible deposits up to £85,000 or up to £125,000 temporarily for large business events.
A business bank account is definitely something that you need to think about establishing from the very beginning. It’s good to keep personal finances and business finances separate to ensure nothing risky happens legally, and it helps you take advantage of any tax benefits, too.
There are plenty of business bank accounts to choose from. With that being said, make some comparables and assess which ones will offer the best opportunities in terms of fees, deposit protection, and all the other considerations covered on this list.
