LET YOUR BANK KNOW YOU HAVE A FEW QUESTIONS TO ASK BEFORE OPENING A BUSINESS ACCOUNT
To effectively manage your finances, these are the main questions to ask before opening a business account.
This post answers 11 top questions you should know if you want to choose the right bank for your business account.
One of the mistakes which most entrepreneurs make is undermining the need to consider the prospect of a bank to fulfill their business needs before account opening.
It may be good to have a bank close to your store, office or company, but that may not eventually make the closest bank be the right one for your business.
You have to consider asking each available banks some few questions before opening a new business account. Otherwise, it will be disappointing if after opening an account is when you discover that the bank doesn’t offer the service you need.
In every organization, owners must take cognizance of how money comes in and out not only for monitoring transactions but also for easy budgeting and disbursement of funds.
If anything goes wrong with the financial process, it may have adverse effects on the entire organization.
Against this mishap, you have to consider an effective banking relationship right from the moment you start planning your business.
This will prevent your continuing costs of running a business account from hitting you in ways you never expected.
How is that possible?
It is possible if you know the right questions to ask before opening a business account.
Questions to Ask Before Opening a Business Account to Know the Best Bank
There are a few questions to ask before opening a business account to make you know which bank is the best for a business account.
That will provide you with the right information you need to know about the services, products, and resources that different banks offer.
What you read on papers about each bank may be different from what the banks actually implement in the real sense.
So, answering these questions will guide you in making the right decision about opening a new business account.
1. What Options Do I Have?
One of the questions to ask before opening a business account is to know the options available for each account type.
Both savings and current accounts have different options and you have the privilege to choose the one that is most suitable for your needs.
Having identified your business needs – what your business requires from a bank to achieve its objectives, it won’t be difficult for you to know which account option to select.
The essence of this assessment is to know which bank has comprehensive services or supports for your business account.
Assuming you’re into an eCommerce business, and you need to open a new business account, you must choose a bank that has varieties of options for internet or mobile banking since most of your transactions will be conducted online.
2. How Long Would Deposited Funds Take to Reflect on My Account?
This is also one of the vital questions to ask before opening a business account. As some banks delay certain deposits while some don’t, you need to know how long it takes each bank to process your transactions if you bank with them.
Although each bank might have a reason for a delay and that makes them different. The problem is that if a transaction takes longer than you expected, it might frustrate your business.
So, you need to know this.
Assuming a customer deposits a paycheque to your bank to purchase some goods from you.
If you fail to supply the customer because the fund has not been reflected on your account, he won’t be happy. As a result of this, you have to thrash this out first with each bank.
Ask about the bank’s process of handling cash deposits, transfers, and paycheques, and ensure you don’t open your business account in a bank that will frustrate your business.
Some banks handle the largest withdrawals and delay the smaller ones. This is likely going to cause a serious delay if your customer’s cheque is small.
3. When is Interest Payable on My Savings?
Most people don’t pay attention to the interest banks pay on their savings because the rate is too low.
Since the rate is not fixed, you can get more on your long-term savings if you monitor it well.
At the end of the month, you can use your interest to clear your monthly charges on SMS alerts. You have to know when to withdraw in order not to skip your interest for the month.
If interests matter to your account, then knowing when each bank pays is one of the questions to ask before opening a business account.
All you have to do is to ask the bank what requirements are involved to earn interest on your savings?
4. Are Mobile Banking and Online Bill Payments Available?
Some banks offer mobile banking and online bill payments, while some don’t. And yet those that offer these services don’t support all options.
Before opening a new business account with any bank, determine what options matter to your business and choose the bank that has full support for your options.
5. What is the Cost to Make Inter-Bank Transactions?
Most banks don’t charge you when you directly transfer from your account to another account of the same bank.
But if you are purchasing something with your ATM card via the POS or directly transferring funds to another account different from your own bank, some charges will be made on your account.
This makes one of the top questions to ask before opening a business account.
If the fee is more than what your business can bear, then you should find another bank that doesn’t charge that much.
6. How Secure Is Mobile Banking?
Despite the huge development experienced in the banking industry lately such as financial technology, most people still don’t want to opt for mobile banking due to series of security threats attached to it.
Fraudsters can easily breach the security protocol of any online banking platform if it is weak and drain the account of their victims without the bank noticing.
So, if your business depends on mobile banking, knowing which bank has the most secure mobile banking system is one of the questions to ask before opening a business account.
This will enable you to know what protection is in place by each bank to defend against fraudulent attempts on your account.
Some banks use up to three different security protocols to protect customer accounts before a transaction can be completely successful.
At each process, there is a password challenge before further access can be granted to your account.
In fact, some banks offer their customers a hardware device (token) to generate random keys to make your business account very difficult to hack.
Aside from this, another measure that is put in place by banks is the use of SMS to alert customers of current activities on their accounts.
So, before opening a new business account, you have to ensure that all these security measures are in place to monitor your account from time to time. This facility will help you quickly block a suspicious transaction on your account.
Banks that don’t have such powerful protection in place may expose you to the risks of online banking. If you open an account in such a bank, you won’t notice any fraudulent activity on your account except if you request your account statement and do a thorough audit, which might be too late.
7. What is the Minimum Balance To Open and Close an Account?
Some banks require a minimum balance for opening and closing an account. Be sure you know what is required and you’re okay with it before opening a new account. Yet some banks don’t require any balance to open and close an account.
Consider the two and choose the one that is most appropriate for your business. Those that have a minimum balance required won’t approve your withdrawal if the amount you want to withdraw will reduce your minimum balance.
You have to know this earlier in case you will need to apply for an overdraft to avoid your withdrawal from being rejected.
8. What Business Development Training Programme is Available?
Some banks see the need to educate their customers on how to manage their businesses and offer investment advice to help them acquire the skills they need to grow their businesses. As a business owner, you need this kind of training.
All you have to do is to find out which bank has provisions for such a program. Meanwhile, a bank that invests in your growth will be very suitable for your business.
9. How Effective Can I use the ATM?
Most of the time we can’t use our ATM cards in our banks, it is probably because our bank’s ATMs are out of service, temporarily unable to dispense cash, or because there is a long queue at the machine and we don’t want to queue in the scorching sun.
All this indicates ineffective use of the ATM and poor customer service. The more we use other banks’ ATMs, the more we pay. So you have to think twice before opening your business account in such a bank.
10. What are the Withdrawal and Transfer Limits on My Account?
If you enjoy using mobile banking to meet your business needs, it is very important to know what limit is placed on the transactions you do online.
Here, a limit is put on how much you can withdraw and the numbers of transactions you can make in a day.
No matter how much you have on your account, once you reach the limit set by the bank, you still have to visit your bank or wait till the next day to complete the transaction online.
You have to know all this before opening a new bank account so that you won’t be stranded after putting your money into the new account.
11. Is There a Nearby Branch?
Sometimes when you travel and a need arises to visit your bank, it would be disastrous if the bank doesn’t have a nearby branch.
So, at the time of opening a business account, consider the coverage and network of the bank locally, and internationally. As a businessman, you need a bank that is well connected for you to have access to your bank anywhere you find yourself in the world.
From the services each bank offers, you will know the best bank for your business account.
In the absence of a good banking relationship, take your leave for the best. Don’t patronize a bank because of personal reasons.
Make your business needs your top priority. And each time you need to make a decision regarding your business, be objective.
State in your comment if there are other questions to ask before opening a business account.