Having a business bank account is a key part of being a business, whether you are a self-employed sole trader or a larger company. Business bank accounts are different from personal bank accounts and often involve things like charges for every transaction. So when you are looking for a new business bank account or to switch from your existing bank, how do you choose the best one?
Look at the needs of the business
Firstly, think about what you need from a business bank account. For some businesses, it can be pretty simple – you want somewhere to receive customer payments and to pay out for regular expenses.
A debit card is one of the priorities and the vast majority of accounts will come with one as standard. You may want the option for a cheque book if you still write the odd one.
You may also want to look at extras such as an overdraft, a savings account or even a business bank loan. While these might need to come into effect after you have banked with the bank for a little while, it is a good idea to check if they are offered so you know you can look into it when the time comes.
Finally, you may want to see if they have local branches. While there’s definitely been a move away from a branch in every village and town with most banks, many still have branches in the bigger towns and cities. So if you do sometimes need to visit the bank, it is worth seeing where the nearest branch is to where you live or work.
What do they charge?
The primary consideration for a business account when looking at switching is usually the monthly fees – how much are they and what do they charge for? Getting the right business bank account can save hundreds of pounds on fees while some accounts may give a fee-free period at the start of a new account which can be up to two years in some cases.
When you are looking at the account, look at the fees. There are often fees for deposits of cash, cheque, by card or by transfer. There are usually also fees for things like direct debits, debit card payments and other types of bank transfer. So an account with £1500-2000 worth of transactions a month can easily cost £20-30 a month in fees.
Does it offer online banking?
Ease of access is another big consideration for a business bank. How easily can you transfer money, make payments and check your balance? This usually means things like telephone and online banking, an app for your phone is another useful feature. Having these features means it is much easier to manage your money. Some accounts may even give free business support and advice to help you grow the company.
If you prefer to have a certain type of app for your phone, it is worth checking to see if the bank offers them. Most big banks and business account providers will offer a range of modern options including apps for Apple and Android phones as well as an online banking option that you can access via a desktop. Look for easy access phone banking too so you can speak to someone if you need help.
How easy is it to switch?
Under the Current Account Switch Service, it can often be a very simple process to change from one account to another. Let’s say that you have an account with Santander and want to take a new one with HSBC. To qualify for the switching service, your business needs to have less than 50 employees and a turnover not exceeding £6.5 million.
The switching service is a reliable and hassle-free way to switch accounts and usually takes 7 working days. Sometimes, you may need to cancel your Santander account once the switch has taken place but otherwise, it is a straightforward process. It is free and you can choose the date that you switch. Under the service the new bank will:
- Move all payments going out such as Direct Debit and Standing Orders as well as payments coming in such as salary
- Transfer any money from the old account to the new one
- Arrange for accidental payments to the old account to automatically redirect to the new one and contact the sender to update details
If there are any problems during the process, the new bank will refund any interest paid or lost and any charges on either the old or new account due to the switch.
All of this means it is easier than ever to switch to a new business account. You can find an account that offers the features you need and has sensible charges then allow the switching service to do most of the work for you.