Founders, business owners, and CFOs may not be familiar with the terms and conditions of their bank accounts. Business account charges can be expensive and complicated. But are they unavoidable?
Whether you’re a startup or a long-standing business, you shouldn’t have to pay excess business account fees to do your banking. Here’s how to reduce bank fees for your business.
1. Check the limits on transactions and deposits
Transaction limits are one way banks charge for business accounts. Transactions typically include deposits, credits, checks paid, ACH, and signature and PIN-based debit purchases. For example, the Silver Business Checking Account from U.S. Bank limits transactions to just 125 per month. You’ll pay $0.50 for each additional transaction if you go over.
To avoid paying this fee, find out the limits on your account. Then, add up the typical number of transactions your business makes each month. You may benefit from upgrading your bank account package or switching to a different bank altogether.
2. Maintain minimum account balances
Banks can charge business accounts monthly maintenance fees ranging from $6 to $15. But many institutions waive the cost if you maintain a minimum balance set by the bank.
Ask your banking representative if the business account fee depends on the minimum daily or average balance to avoid this expense.
3. Get overdraft protection
As a business owner, protecting business cash is extremely important. Overdraft fees usually fall in the $30 to $35 range, which can add up fast. It’s always best to avoid overdrafts, but you can put protections in place to avoid paying extra fees.
Your bank may offer an overdraft line of credit or let you link accounts to transfer money automatically to cover payments and purchases in case of an overdraft. You can also set up text messages or email alerts if your balance falls below a certain amount.
4. Connect your bank accounts
A checking account is just one financial account every business needs. Connecting your accounts can help you avoid overdraft charges and minimum account balance fees. Linking multiple accounts from the same institution could qualify you for a fee waiver by giving you a higher combined balance and offering funds to cover overdraft transactions.
5. Look for special offers
Looking for special offers can help you avoid business account charges and put some extra cash in your pocket at the same time. Many banks have promotions that offer no fees for the first year. You could also qualify for a one-time cash bonus of $100 to $500 for opening a new company account.
6. Always read the fine print
Before you open a new business account, take some time to read the terms and conditions. You can usually find them on the bank’s website, but most banks give you a copy when you apply for the account or can provide them on request.
If you have questions about what the terms mean or if they apply to your situation, speak to someone to get the answers you need. It's important to understand the fine print before opening your account, so you know what to expect in case of any issues later on.
7. Opt for internet banking
Internet banking is a great way for business owners to reduce their bank account fees and charges. It’s more cost-effective for the bank, and many pass the savings on to you through fee waivers of account charges when you take advantage of electronic statements and other online options.
Internet banking also helps with cash management by giving you access to account details and transactions around the clock.
All seven of these options will help you reduce your business banking fees, but if you’d rather your finances work for you and you want to start generating revenue from your idle cash, try Treasure Financial. Treasure is a free platform that lets you view all your business accounts in one place and earn a higher return on your cash.
Find out more and open a Treasure account today.