Deciding on a business bank account that is suitable and valuable to you could save time, and if managed well, could provide a small amount of extra revenue, so you really should make a short term effort to reap the long term payback from great interest rates and offers. There are hundreds of different banks both on the high street and the internet who offer great deals for new and existing businesses, which means that you can shop around for the one which suits you.
Once you have got your business going and cash is flowing in and out, you should have a business bank account set up so that personal and business cash can be kept separate. The most important reason to keep everything separate is so that you and HM Revenue & Customs can clearly see the takings you are receiving, the costs you are paying and ultimately the profit you are making so that taxes can be accurately calculated.
Each business has different needs, these needs can often depend upon the size of the business and how much cash will be going in and out, therefore you should choose an account which works for you, and increases your bank balance as much as possible. If your business is small, then you may want an account which gives free business banking for a year or two, where as if your cash flow runs into thousands of pounds each week, you would look for an account that has low transaction fees and high interest rates on credit balances.
It is useful to make of a note of what you need from your account before undertaking the research into specific accounts. All of the attractive features and free services of an account may entice you, but you should clarify what you actually need, and what you just want. Think about some of the following common features and fees involved in bank accounts when looking around on the high street and online;
Do you get free business banking, if so, how long for and are there any limits or minimum balances?
Do you get a business debit / credit card for payments; how many would you need and how much are you charged each time?
Will you be setting up a lot of direct debits, standing orders and BACS payments, if so, are they free?
Will you need to pay cash in over the counter, is it free?
Will you need to pay cheques in over the counter or could you post them, which option is less expensive?
Will you need to withdraw large amounts of cash, if so, are there any limits and is it free to do so?
Is there an overdraft facility, if so, how much interest do you have to pay?
Is there a local branch near you?
Are you able to bank online, or over the telephone?
Can you only bank online, is this going to save you money or just be an inconvenience?
Can you freely transfer between your accounts?
Do you get a free reserve or savings account as well, and how much interest is paid on the credit balance?
How much are you charged when you exceed an overdraft limit, or do not have enough funds to cover a direct debit?
You will receive different benefits from an assortment of accounts, so it is important to shop around.