Part 2 – Choosing the right bank

It’s often the case that the bank you choose when you first start out can end up being the one you stick with for the life of your business, after all, it can be a pain to move so here’s a few points to consider when choosing a bank.

Free banking

Quite a few banks offer a free period of banking when you first join them, whether it’s for 6 months or 24 months it’s important to have an idea of what their fees are once you become a paying customer and the extras you get with the account.

Remember time is money and you get what you pay for, there’s no point in picking a bank that won’t provide the support you need when you need it just because they have the longest free banking offer.

It can be tempting to keep switching banks every time the free banking period runs out but keep in mind the balance between saving money and the time and energy wasted while you to change.

Online banking

In the digital age, it’s more important than ever to have access to online banking that’s easy to use.

When picking a bank account you may want to do some research into the quality of their online banking website and especially the mobile phone app as this is likely to be the feature you will use the most.

There’s quite a lot of accounting software out there that can link into your online banking and help you automate a lot of your bookkeeping, it’s worth finding out if the bank you wish to go with can facilitate this to make your life easier down the road.

Credit History

Due to anti-money laundering and terrorism funding regulations the lengths the bank will go to in order to ensure that the money flowing through your account are legitimate can often seem over the top, however you will at the very least be asked for proof of ID and address and may be called into a meeting at the local branch.

For signatories on the account, many banks will also credit check them and refuse accounts to people with poor credit, but there are a few banks out there that provide services to people with poor credit.

For limited companies banks will often want to ID all of the directors and sometimes even the shareholders depending on how significant their holdings are, to keep things simple it can often make sense to incorporate a company with one director and shareholder and then add the others later once the bank account is open.

Direct Debits

Direct debits are a great way to reduce bad debt and make payments for your clients easier, while it can be difficult to get the facility directly for your bank if you’re a new business, there are third party providers that can give you that function for a small percentage of the transaction value.

There’s no one size fits all answer to finding the right bank, it usually comes down to the best you can do based on your situation and working style, we’re a firm of accountants based in Northampton and if you’d like to find out a bit more about how we help our clients make the right decisions then please contact us.

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