Every business needs to have a business bank account. It does not only ensure that you keep your personal and business finances separate, but it also helps with your important business transactions. As your business grows, your business bank account requirements also change. Business growth is one reason why you should consider changing your business bank accounts.
Once you decide that your current bank account does not meet your business’s needs anymore, it’s time to start looking for other options. Before making a decision, make sure to do the following steps.
1. Identify Your Business Banking Needs
One of the reasons why businesses consider changing business bank accounts is because of their evolving business needs. It’s essential to first identify both your current and future business needs before finding a bank account that is suitable for your business.
Some business owners need a bank that offers longer business hours while others prefer to bank with a financial institution that can provide both of their banking and financing needs. Whatever your growing needs are, they are an important factor that you should reflect on before finding a new bank to work with.
2. Research New Bank Account Options
When evaluating banks, it’s important to not only focus on your current needs but also take into consideration your future needs. As your business continues to grow, it’s best to find bank account options that are scalable with your growth.
When comparing bank account options, you should consider not only the features these accounts offer but also the corresponding fees, rates, and other banking aspects that will help you decide which will work best for your business. When choosing a new bank, it’s also a good idea to ask about the bank’s loan products, funding options, and ability to integrate with your business accounting software.
3. Take Note of Any Automatic Payments
In preparation for applying for a new bank account and closing your old one, make sure to take note of any automatic payments you have previously set up. Do not close your old account before these payments are posted to ensure that you won’t be in trouble with your suppliers. Also, make a list of all your automatic payments so that you can transfer these transactions to your new account when it is opened.
4. Choose & Apply for a New Business Bank Account
Once you have chosen which bank account will work best for your business, it is now time to open a new bank account. The process for applying for a new business bank account typically is the same as when you applied for your old bank account. However, this may vary depending on the bank.
Check if there is an option for an online application or if you will need to go to a physical branch to process the account opening. Either way, make sure to gather all the necessary information like your personal identification, business papers, and financial documents. Once your new account is opened, check your online and mobile access, debit cards, ATM access, and funds transfer capability. You want to make sure that everything is working correctly.
Top Business Bank Accounts
The best banks offer business accounts with the opportunity to earn interest at a lower cost. When choosing a bank account, consider the fees associated with it, the size of its network, its accessibility, and other features that are useful for your business.
If you aren’t sure which banks to consider, here are some options:
5. Update Any Automatic Payments
Once everything is up and running with your new business bank account, do not forget to set up your automatic payment transactions. Check the list that you have created from step three and make sure that you don’t leave out anything. Update your automatic payments as necessary to ensure that you don’t miss any deadlines.
Ask your new bank if it offers a “switch kit,” which is typically designed for businesses. With this kit, the bank will notify any service providers and suppliers who do business with you when you transfer any automatic transactions. Some banks have an account transfer form that you can send to your suppliers, service providers, or even customers to notify them that you have changed to a new bank account.
6. Close Your Old Bank Account
When you are certain that your new bank account is set up fully and working properly, that all automatic payments have been transferred, and that all physical checks drawn on your old account have cleared, you may now close your old bank account. In most cases, closing a business account needs to be done in person.
Most likely, your bank will ask you to fill out certain forms for the account closure. If there are any pending transactions, make sure that you have enough balance in your account to cover them. The bank will release the remaining funds to you or your business’s authorized representative after all pending transactions are processed.
Signs You Need to Switch Business Bank Accounts
The type of bank account you maintain and where you bank can have a great impact on your business. Sometimes, you feel like you should switch to a different bank account, but you’re unsure whether this is a good idea. When this happens, you need to check for signs that would tell you the switch is necessary.
The following are the top five signs you need to switch business bank accounts.
1. Your Account Costs Are Too High
Most bank products and services have corresponding fees. It’s important to consider your monthly and annual costs in maintaining your bank account. Fees for account maintenance, excess transactions, account inactivity, paper statements, ATM withdrawals, cash deposits, and other extra charges can add up and can greatly affect your business’s finances. If you think you’re paying too much to keep your account, it’s a red flag that you should find other, cheaper options.
2. Your Bank Doesn’t Meet Your Needs
Most bank accounts have certain restrictions—like the number of free transactions in a month, whether or not you are allowed to deposit cash or the number of deposits you are allowed to make. These restrictions may become an obstacle to your business’s growth. Also, you may have needs that your current bank does not offer, such as overdraft protection, business software integration, or other services, that are important to your business transactions. If your current bank cannot meet your growing needs, it’s a sign that you should find a new one.
3. You Want to Bank Completely Online
If your business has outgrown the traditional banking system and you now prefer to bank completely online, it’s another signal that you need to switch to an online-only business bank account. Perhaps you’ve become too busy to visit a physical branch to process your banking transactions, or you travel too often and still want to access your bank account. If you want to bank anytime and anywhere, switching to a digital bank can simplify your banking experience.
4. You’re Unsatisfied With the Service
Another good reason to switch to a different bank is if you are unsatisfied with your current bank’s customer service. Perhaps the employees are rude, or they are not knowledgeable about their products, or they did not handle your concerns properly. Maybe you were not able to build a good banking relationship with your bank due to several reasons. Whatever the reason for your dissatisfaction, it’s best to take your business somewhere else where you can get a better service and the best value for your money.
5. You Need Access to More Business Products
If your current bank has limited business products, it may no longer meet your business’s growing needs. If you need to access other business products that your current bank does not offer, such as loan products, credit cards, and merchant services, it’s a good idea to switch to another bank that can cater to your needs.
When choosing a business bank account, it’s important to consider its scalability with your future needs as your business grows. If your current bank account can no longer meet your needs, or if you experience one of the signs mentioned above, changing banks may be the best way to go.