New Business Bank Account - The Investing Site’s top tips for choosing the right business bank account

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New Business Bank Account

It doesn’t matter if you’re a business veteran or just starting your business, you both need the same thing – a business bank account. When you open your account you may decide to try the bank where you have your personal banking, they will be more supportive, after all you have built up a track record with them over the years. However, you should be getting the best deal for your business rather than being nostalgic or lazy. Charges can be quite modest while other banks skyrocket, what you’re looking for is something with good all round benefits for your growing business.

Start off by comparing banks on the high street. You should always ask the following;

Do they have a dedicated small business team? What services do they offer? What do they charge for those services? How they charge for fees – are they one off or per transaction? Are there any hidden charges? Some banks charge for letters etc…

Choosing the account;

This depends largely on the way you will ultimately run your business. If you have large numbers of transactions then maybe a fixed fee account instead of per transaction will be better. Do you need free direct debits and standing orders? Whichever bank you decide to select will help you decide what type of account you need from the products they offer, and if they don’t offer the services you need you can of course hold accounts at several different banks. Do be aware though that some banks can offer better deals if you commit all of your business to them instead of their high street competitors.

You are likely to need to following accounts;

Current account – you can use this for all of your daily running costs, if you can get a bank which offers interest then great, but many don’t and you may need to open a savings account to move balances over to.

Loan account – set up for any business loans you may require. Be careful with this one as there are many different options for loan accounts, just like mortgages. You may be better off getting a personal loan instead.

Foreign currency account – if you are going to be dealing with overseas clients. This saves you paying overly large conversion charges too many times.

You should monitor your accounts and review them each 6 month term.

Don’t overlook online banking – this can be a godsend to many small businesses, and almost all banks offer this for free, with some offering better deals on the charges and fee’s.

When you have decided what bank you’re going to use, contact them and set up a meeting to open the accounts you need.

Depending on how your business is set up you will need to provide various pieces of information. The basics are;

Details of the business you are running and it’s activities Details of where the finance for the start up of the business has come from (if any). This can be your parents, business partner, personal loan, re-mortgage etc… A business plan – so many banks these days demand a business plan, best to take it Either a passport or driving license (for all people involved in the banking) A recent utility bill (under 3 months old) such as gas, telephone, water, rates. Again for everybody involved in the banking. An account opening mandate – provided by the bank A list of people who can sign on the account, they will also have to be present to sign the mandate.

If you are operating a limited liability company you will also have to provide;

Certificate of incorporation – provided by accountant, solicitor or company who set up LTD Company

In the case of Limited Liability Company the above passport and utility bills will need to be provided for ALL directors and the company secretary who will all be required to sign the mandate.

It’s worth noting that like all relationships, they don’t always work out. The same goes for your bank, if it doesn’t work out as planned; you’re not tied to it for life. Change to another bank, but always start from the beginning and do your research. If not you could always end up much worse off!


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