This article looks at some of the key things you should look out for when choosing a business bank account, based on the experiences of the Bytestart team.
You can also read more detailed tips on how to choose a bank account for your new business.
Business Banking Basics
- A limited company must open a business account, sole traders may use their personal current account for business activities.
- Unless you have good reasons otherwise, you should look for a bank which has a dedicated small business team.
- Find out what fixed charges your bank levies on business accounts (transaction fees, overdraft fees)
- Is there a fee-free period for new customers? (if so, take advantage of it)
- What, if any, ‘extras’ does the bank offer (e.g. credit cards, charge cards, free statements)
- What are the interest rates on business and business savings account (understandably, this point may not apply during the current economic downturn!)
- Does the bank offer online banking? (for Bytestart readers, this is a must, and widely available these days).
Opening an Account
Once you have compared several banks, you will need to provide various documents in order to open your account. Depending on how you are starting up your company (or if you are transferring from another business account), you may also need to provide a business plan and details of your business.
- Certificate of Incorporation (limited companies), which you will receive once you have bought the company.
- Identity check (passport, drivers licence, several personal utilities bills – the bank will tell you exactly which to bring along).
- List of signatories who can sign company cheques, and if more than one person needs to sign
- Mandate to open the account (provided by the bank)
Always remember that you’re not tied in to your new bank account for life – you can switch business accounts later on.
By doing the groundwork before you start rather than simply opening up a business account at your nearest bank, you may well save your business money and time.