Finding launch capital is one of the basic considerations of starting a company. You will need to open a bank account for your business, in order to manage your start-up cash effectively but if you choose the wrong provider, you could restrict your firm’s cash flow and damage its operations. Turner Little names the factors you should consider when opening your business’ first bank account.
Account types
You can choose between several types of bank account. These are savings accounts, which feature high interest rates over fixed periods and current or business accounts. Opt for current or business accounts as a new business owner, because with a savings account your cash may be tied up for long periods of time. You will have to handle a range of expenses when starting a business, so current or business accounts are more suitable, especially as they typically offer you easy access to your money.
Beware expenses
Be aware that you may be liable to pay certain fees, when opening a bank account for your firm. You may be obligated, for instance, to pay charges on transactions made via cheques and other traditional payment methods. We would advise you to research each account provider via price comparison sites like Money Saving Expert, to learn of any applicable fees and find the most cost effective bank account.
Check all claims
You may be drawn to a bank because its accounts features amazing bonuses or fantastic headline rates. Check these claims before you sign as they can be misleading. With headline rates, for example, you may have to pay additional fees for services such as withdrawals, making it less cost effective than implied in the long-run. In this case, use online calculators to determine how any transition costs e.g. standing orders, may inflate your account’s headline rate and cut into your firm’s operating capital.
Traditional vs. online
If you wish to save money on your banking, you could open an online bank account, instead of banking with a high street provider. With this option, you can handle your finances anytime, anywhere, making it perfect for firms which work remotely, for example online banking would be good if you work from home. You should also remember that online bank accounts often come with lower fees, as they can reduce overheads by working remotely and they may pass these savings onto you.
Consider bolt-ons
You should opt for a business banking provider which offers a comprehensive service, to accrue value for money. Check whether the provider in question offers bolt-on services such as contents insurance. You will have to devote a significant investment, when buying the equipment e.g. laptops, needed to operate your business. Therefore, a bank account which comes with contents insurance can be useful, as it will allow you to safeguard your firm from risks such as equipment theft and breakdown.
Banking advice
With so many factors to consider, you may wish to seek expert advice, before opening your business’ first bank account. As registered bank intermediaries, Turner Little can offer guidance on British business banking matters. We supply a comprehensive service, allowing you to select the best banking provider for your firm and manage your finances effectively during the launch process and beyond.
Turner Little
Turner Little was founded in 1998 and it has since become a well-established UK based professional Company Registration Agent, Registered Bank Intermediaries and Business Consultants, as well as Trust provider. You can receive our monthly newsletter by signing up using the form below.
