As a consumer, you most likely have access to a personal checking account with no fees for regular use. As long as you don’t overdraft, you won’t pay anything for normal activity. That isn’t always the case in business. Most banks charge monthly fees for checking accounts, and depending on your needs even more for high transaction volume, cash deposits, and advanced features. If you are looking for a simple business account without any fees, or want to get out of paying the fees your current bank charges, read on to learn how.
As you start thinking about how to save money at the bank, think about what you do that costs your bank money. If your bank has to print out a paper bank statement and send it to you in the mail every month, that is a significant cost. A 2013 article from American Banker indicates a $0.60 cost per statement mailed, though costs have likely increased in the years since in higher printing and mailing costs.
Some banks charge fees for accounts with paper statements, and waive them for those who take digital, online statements only. This could be worth $10 to $15 in fees, so don’t overlook the easiest way to save on bank fees!
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Minimum Balance Requirements
The next popular option to get dodge checking account fees is to keep money in the bank. For example, my business checking account at Chase charges a $15 per month maintenance fee, but that is waived if I keep at least $1,500 in the account at all times. That $1,500 requirement was tough early on in my business, but these days I like to keep at least $10,000 in the business checking account, so I don’t worry about getting charged.
Banks lend out cash you keep on deposit in a checking or savings account to other businesses, homebuyers, credit card holders, and other borrowers to generate a profit for the bank. Keeping cash in your account means the bank has more to lend, so they can offset your cost by lending out that minimum balance, as long as you keep it there.
Maybe you don’t want to keep too much cash in your business checking account, so the minimum balance fee waiver doesn’t work for your needs. You may be able to find a minimum balance across linked accounts that will offer the same effect.
For example, if you keep a business savings account at the same bank with a decent balance, you help the bank with its lending requirements as explained above. So even if you don’t keep a lot of cash in your checking account, if you keep it in another account at the same bank, the bank may be willing to waive monthly fees.
Bankers have more ability to waive fees than most people realize. If you build a strong relationship with your bank, or specific managers at your bank, you could find some benefits headed your way, including fee waivers.
Banks know the average profit per business and consumer customer, and they spend a lot on advertising and other customer acquisition costs. If they can keep a customer around doing something as simple as waiving a fee, it might be cheaper than finding a new customer. If your bank manager knows that, and you have a good relationship, they may be happy to waive a fee for you.
Unless you need to deposit cash, you can do pretty much all of your business banking online. Outside of depositing a random check above my online deposit limit, I have zero reason to ever go to a branch for any banking needs. Online banks save millions by skipping local branches around the country, and they are more likely to offer no fee accounts.
One example is Capital One’s Spark Business Checking, which has no fees for regular use. More business checking accounts charge fees than don’t, so don’t expect to find too many no fee business checking accounts out there, even online. But you don’t need many, you just need one.
Stop Throwing Away Your Money
You work hard to make your business profitable, don’t let those profits slip away due to bank fees. Between credit card processing and checking account fees, you could easily spend hundreds of dollars per month on financial services. If you find the right account and take the right steps for your business, you could see those fees go down to zero.
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