Friday, September 7, 2012

Selecting a Checking Account for your Business

Business owners have special needs when it comes to their business checking account. When one is opening a new business or considering a change in financial institutions, it pays to look beyond the standard commercial bank and do some extra research on a type of financial institution that has been around for years, the credit union. Here at Meriwest Credit Union we have been involved in business banking and lending for many years.

There are a number of questions that must be asked when you are vetting a new home for your business checking account. How will you use your checking account? Will you be writing checks or using online banking to pay bills and vendors? Using online resources can save you some money with some institutions. Are you able to designate people, such as a bookkeeper, and give them a personal secure log in account to do business or transact inquiries on the account?

What are the monthly fees and how do you get them reversed or cancelled? Is there a minimum balance requirement? Can that requirement be met by depositing funds in a savings/money market account?

Does the bank offer overdraft protection? This is often a deal breaker for a lot of business people. The best sort of overdraft protection is a line of credit associated with the account where dollars are transferred off the line of credit should a deposit need to be made when a check is clearing. Some institutions will allow you to overdraft the account slightly, while charging a significant overdraft fee of $35 or higher. The worst is what I refer to as a “Call and a Prayer Overdraft Protection;” the bank calls you to tell you that checks are clearing and you pray you make it to the bank on time to make the deposit for them to clear. This is very stressful and very expensive as they will charge you to pay those items provided you make it to the office to make the deposit on time. If you don’t make it, your checks will be returned and your time was wasted.  

More questions business owners should ask about a prospective financial institution: How convenient are the offices? Can you bank electronically? What are their hours? Do they open Saturdays?

An important aspect of this is the customer service the institution gives you. When you walk in to get information, are you recognized right away as a new client and greeted? Or are you ignored? Does the sales person strive to give you a complete run down of the information you need to make your decision or do they shove brochures at you? Does the staff appear to be well informed and competent or slightly confused and embarrassed by it? You can tell a lot about an institution from walking in on a Friday night an hour before closing and watching the flow of customers. Observe the tellers, are they competently going about their work or does a supervisor have to help with their transactions? Are customers in line pleasantly waiting or impatient? Impatience may be a signal that long waits in the teller line are common in that institution.

A few years ago, credit unions started offering business accounts to small businesses in their communities. Among the advantages of a credit union over a bank is the concept of shared banking. A business owner can go to any shared branch of any credit union across the country and make a deposit to an account at their credit union. Another advantage is that credit unions typically have fewer fees and those fees that are charged are often less than their bank competitors.

A business owner’s time is precious. It is important they spend a bit of time examining and shopping institutions they may be considering for their banking. This way they can save a lot of money, time and hassle in the future.

Meriwest Credit Union does offer a free business checking account. See our Business Banking link here to view our checking account offers for small business owners. 

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Home Buying Strategies for the Current Bay Area Housing Market
Thursday, September 13, 2012 - 6:30PM
Meriwest Credit Union Monta Loma Financial Center
580 N. Rengstorff Ave., Mountain View CA 94043

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