Choosing a Checking
Account for Your Business
Just like choosing
a personal checking account, you should select a business checking account,
or a series of accounts, that match your needs. Start by considering how
you use your business checking account:
- How many checks
do you write each month?
- How many and what
types of deposits do you typically make?
- How large of an
average balance do you maintain?
- Is there a convenient
branch or ATM close by, especially if you make daily deposits?
offer a basic business checking account with very low or no fees. However,
many states prohibit the paying of interest on business checking accounts.
Most institutions will restrict the number of checks that can be written
on a low or no fee account to prevent a business from having an account
with very low balances and writing a large number of checks. For instance,
most institutions would not allow an account with a very low balance to
be used to process payroll checks for a business with hundreds of employees.
The good news is that
most institutions have programs that combine a business checking account
with some type of interest bearing savings account for larger balances.
They may even have an automatic sweep provision that moves balances in
excess of a pre-determined level out of a non-interest bearing checking
account into an account where interest is earned. There may be a limit
on the number of monthly transfers back into the checking account, but
that works fine. All you do is periodically (perhaps once or twice a month)
move the funds you will need back into the checking account. If you can
do this online, so much the better.
If you are looking
for an account where you will write a large number of checks or a payroll
account for a large number of employees, be sure to discuss your needs
with the institution, and they will probably have an arrangement with
fees and balance minimums that will work for your business.
Depending on your
needs, ATM access to the account and online capabilities may be a must.