Questions to Ask Before Setting Up Your Business Bank Accounts

Starting a business is an exciting and complex endeavor that involves numerous decisions, including where to establish your business bank account and what types of accounts to get.

Each business is unique, with its own financial needs and product cycles. While we can’t prescribe the perfect bank account for every business, we can provide essential questions to consider before opening an account.

Here are the top 15 questions to ask before opening a business account:

1. What Business Banking Services Do You Need? Business bank accounts come in various forms, including checking, savings, investment and money market accounts, credit/debit cards, checks, deposit-only cards, online banking, and employee checking accounts. Most new businesses will need both a checking and savings account, but you may require more or fewer options depending on your cash flow.
2. Do You Need Quick Lending? Determine if your business might need short-term credit for periods of high expenditure, like a seasonal business preparing for peak sales. Ensure your bank can provide rapid credit options such as a line of credit or on-demand lending for existing customers.
3. How Much Impact Will Your Credit Have? As a new business, your personal credit will initially influence your business credit. Obtain your credit report and work on improving your credit score before selecting a bank. Different banks have varying credit policies, which could affect your final decision.
4. Is There a Minimum Balance Requirement? Every bank account has a minimum balance requirement to avoid extra fees. Find out the requirement for each account, whether it’s an average balance over a statement period or the lowest balance in a month. Compare this with your expected cash flow to ensure you can maintain it.
5. What Is the Fee Schedule? Banks charge various fees, including monthly service, transaction, cash deposit, ATM usage, wire transfer, minimum balance, overdraft, and maintenance fees. Know the exact costs for each account to compare pricing accurately.
6. Is There a Maximum Transaction Limit? Some banks charge extra fees if you exceed a certain number of transactions per month. Understand these limits and whether they fit your business’s transaction needs.
7. Are There Minimum Transaction Amounts? Some accounts, particularly money market and savings accounts, charge fees for transactions below a specific amount. Ensure these limits align with your typical transaction sizes.
8. Are There Linked Service Discounts? Inquire about other services the bank offers, such as payroll, employee accounts, insurance, loans, and credit cards. Some banks provide discounts if you use multiple services.
9. Is the Account Interest-Bearing? Does the account pay interest, and at what rate? Find out if the rate varies with the balance and how interest is calculated.
10. What Are the Online Banking Options? Request a demo of the bank’s online business banking tools. Online banking quality can vary significantly, even between large and small institutions.
11. What Perks Matter to Your Business? Banks often offer perks for new customers, such as cash bonuses, limited-time interest rates, payroll services, accounting software, travel discounts, and more. These perks can help you decide between otherwise similar options.
12. How Much of Your Deposit Is Insured? The FDIC insures deposits up to $250,000. If your business operates at higher levels, especially seasonally, check the deposit insurance options with your bank.
13. What Is the Lag Between Deposit and Availability? Understand the time it takes for different types of deposits to become available. For example, cash deposits are generally available faster than checks. Larger amounts might have longer wait times.
14. Who Will Need to Sign Checks? Determine who among your owners and employees will need to sign company checks and ensure they are present with identification when opening the account.
15. What States (and Countries) Does the Bank Do Business With? If your business operates out of state or internationally, confirm the bank’s coverage areas and any associated fees for transactions made outside your home region.

By asking these questions, you can make a more informed decision when choosing a business bank account that best suits your company’s needs.