Getting a Business Bank Account
Getting a business bank account is a must for any business owner. The bank account provides a safe way to store cash and other valuables. But, there are a few things to keep in mind when opening an account.
Maintenance fees
Depending on the bank you open your account at, you may be required to pay a monthly maintenance fee. This fee usually covers additional benefits of your business checking account, such as no fee for using an ATM outside of your bank’s system, cash back on spending, and overdraft coverage programs. Usually, you’ll be billed for these fees automatically each month.
The best way to avoid monthly maintenance fees is to shop around for the best rates. Depending on your needs, you may be able to get a checking account with no fee, which is easier to find online than in the past.
Many financial institutions offer multiple checking account options. Some do not require an initial deposit, while others make the requirements minimal. Generally, monthly maintenance fees will not be charged if you maintain a minimum balance, make a certain number of deposits, or maintain a certain amount of transactions.
Transaction fees
Using a bank account is one of the best ways to keep your business safe and to protect yourself from liability. However, there are hidden fees that can cut down on your cash flow. Finding the best bank is important to keeping your business running smoothly. Thankfully, there are some tips and tricks that can help you avoid the most common business bank account transaction fees.
There are two main types of transaction fees: card and cash deposit fees. Card transaction fees are charged when your business processes a customer’s payment using a credit or debit card. These fees are usually a few cents per transaction. However, there are a variety of different card types, and the amount charged can vary.
Similarly, cash deposit fees are charged when your bank processes a deposit that exceeds the agreed-upon limit. These fees can be a percentage of the amount deposited, or they can be a flat fee.
Cash deposit limits
Depending on the bank, cash deposit limits for business accounts vary. Some offer unlimited fee-free electronic transactions, while others set a limit of 100 or more per month. Some banks even charge a fee for cash deposits over a certain threshold. Those with a cash heavy business should weigh this fee carefully when shopping for a business checking account.
For business owners who deal with cash, the IRS requires them to report all payments in cash exceeding $10,000. This rule applies to American dollars and foreign currency. Businesses that receive cash for expensive items also need to report the cash payment. The IRS will share suspicious activity with local authorities.
The Bank Secrecy Act requires financial institutions to provide a paper trail that helps law enforcement better control money laundering and other broad financial crimes. In addition, a bank may have a limit on cash deposits or other types of transactions.
Credit card payments
Getting a business bank account for credit card payments is the first step in starting a business. In addition to your traditional personal or business bank account, you’ll also need a merchant account. This account serves two purposes: it is a repository for your company’s funds and it also serves as your business’s credit card processing terminal. You can also opt for a virtual bank. These are often cheaper than their bricks and mortar counterparts and they come with all the benefits of a full service bank.
The best way to start is to look for a business bank account that offers the features you need at a price you can afford. There are many different providers out there, but the most reputable ones offer the most competitive interest rates, low fees, and a friendly customer service team.
Payment processing companies
Whether you’re new to business, or you’ve been in business for a while, it’s important to choose the right payment processing companies to manage your transactions. The process of accepting payments for your business isn’t a difficult one to navigate, but there are several things you need to know to find the right company for your needs.
Payment processors are the companies that process credit card and debit card payments. These companies provide a safe way for merchants to receive money from customers. They also handle all of the behind-the-scenes processing that occurs when a transaction is processed. These companies can offer payment gateways to accept online credit card payments and mobile wallets.
Payment processors also charge a fee for processing each transaction. The amount of this fee can vary, depending on the type of processor you choose. In most cases, they charge a fee of around 3% of the total purchase amount. It’s important to compare payment processors before signing up with one, because not all credit card processors work for every business.
