7 Things To Look For In A Small Business Bank…Plus: What Bank Did I Choose?

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In one of my first posts here on Y.F.N.C.G., I outlined the first first few things I plan on doing to get my computer business up and running.  Up to this week I had completed four of them:

Have a business plan
Come up with a name
Register the business name
Start finding ways to make money

And now, this week, I have reached another important milestone in the preparation of my business, opening a bank account for my business.  If you’re wondering why I think establishing a business bank account is necessary so early in the planning process, I’ve listed some of my reasons.

• -Keeps your business money separate from your personal money.
• -Gives you access to lines of credit (essential to some businesses, but not mine)
• -Merchant account for processing credit cards (something I will take advantage of down the road, I’m sure)
• -Can accept checks written to your business

The Quest

About two weeks ago I set out on trying to find a business checking account that fit my needs.  The first thing I needed to tackle was figuring out what my needs were exactly.  After doing some quick and dirty google research, I realized most banks offer some form of a Free Business Checking account for start-ups like myself.  They all offer things like no minimum balance, no monthly fee, online banking, and a debit card.  The catch is that they put a limit on the amount of transactions you can complete per-month, which makes sure that only small businesses, and not large corporations, will be able to get away with free checking.

Once I knew what kind of bank account I wanted, I hit the websites of some of the major bank branches.  What I came to find out is that some of the biggest national chains really don’t have business bank accounts that suit he small local business owner.

I then started digging into some of the more regional and local branches.  They all had much better plans, truly “free” checking with no hidden fees or minimum account balances.  It was then time to figure out what made these banks unique from each other.   I came up with a list of…

7 things to look for in a local bank that will set it apart from the rest:

1. Hours – This is the number one most important thing for me.  Being that I’m starting my business as a part-time thing, I’ll be working mostly evenings and weekends.  I want the flexibility to be able to deposit money late in the evening and weekends.
2. Branch Locations – This is another really important aspect for me.  I want someplace that has a good number of branches in my county, plus the convenience of a branch close to my house and my “day job” office.  I’m gonna be driving enough as it is, I don’t need to waste more gas depositing my earnings.
3. Fund Availability – When you deposit money, how long does it take to post to your account and become available?  Banks range from same day to 3 days, so this is a question to ask.
4. ATM Fees – Although all the banks I researched offer debit cards, only a small handful of banks offered free use of their card on OTHER bank ATM’s and fewer still offered refunds on the fees those other banks charge for using their ATM.  I don’t plan on using the ATM alot with my business, but it’s nice to know that when I do, I’ll be covered.
5. Personality of staff - As a business banker, you’ll be dealing with the tellers and bank manager a lot more than you probably would be as a normal bank goer.  Make sure they’re the type of people that you’ll look forward to working with. I also see employee moral as a reflection of how well the bank is going to treat me.
   
6. Reputation of Bank – Make sure you do some quick research online and ask your friends about the bank you’re thinking of choosing.  Some banks have a bad reputation and you want to avoid those.
7. Monthly transaction limit - The final difference to note is the monthly transaction limit.  By signing up for a free business checking account, they will put a cap on the amount of transactions you’re allowed to make in a month.  I’ve seen it range from 50 to 300 in the banks I looked at.

So Tell Us What Bank You Chose Already!

After weighing all my options what bank did I finally settle on?  TD Bank was my choice.  It used to be Commerce Bank in my area, but was recently bought by TD Banknorth in the Mid-Atlantic, Metro Washington, DC and Florida Markets.  TD Bank is a sister company of TD Ameritrade, the largest online brokerage in the world.

What attracted me first and foremost to TD Bank were the first two things on my list above, hours and location.  TD Bank calls itself “America’s most convenient bank”, and that’s no joke.  There’s a branch right down the road from my apartment (the closest bank to where I live) and there’s a branch down the road from my office.  Here’s the kicker….the bank is open until 8PM on weekdays, 6 PM on Saturday, and 4 on Sunday!!  Yeah, that’s right, evenings and ALL weekend long.  This was the only bank anywhere near me that offered these kind of hours.  They also offers same day fund availability and 300 transactions per month, the highest of any bank I visited.  To top it all off, the staff there was super friendly and very helpful.

Too good to be true?  We’ll find out.  Believe me, you all will be the FIRST to know if something goes wrong with these guys.  But so far, I’m in love.

Keep in mind that when you go to open a business account, you’ll need to have some documentation:

Photo ID with current address.

EIN – Employer Identification Number – a unique business tax number assigned by the IRS which you can apply for here.

Trade Certificate or equivalent document that proves you are a business.  This is obtained when you register your business.

That’s it.  Nothing too complicated, just make sure you do your homework because, although you can always change banks down the road, it saves a lot of hassle if you go with the right bank the first time out.

What experiences have you had with business banking and what bank do you use?

“I saw a bank that said ’24 Hour Banking’, but I don’t have that much time” – Steven Wright

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