Finding launch funding is one of the key considerations of starting a business. You need to source appropriate banking services, to handle starting and operating capital effectively, while keeping day-to-day business costs low. Turner Little discusses how your business can save money on banking.
Establish savings goal
On average UK firms pay over £2,500 on bank fees and charges per year. If you let these costs build, you could limit potential expansion capital. It is wise to establish a savings goal, for example saving to hire more employees, before finding banking services. With this goal, you will have the motivation needed to source cost-effective services, avoiding unnecessary fees and building savings.
Explore providers
Some entrepreneurs decide to open a business bank account with their personal provider. This may not provide you with the best deal, so research other provides via comparison sites like Money Supermarket, to determine the most cost-effective services. Look at online banks as well. These banks do not have the same building and staff costs as traditional institutions, so they may pass these savings on to your firm.
Examine account types
It is essential that you opt for the right type of bank account for your business. Current accounts come with benefits like overdrafts, insurance and easy access to money, but savings accounts possess higher interest rates, over fixed periods of time. Do you need fixed or variable rates? Fixed rates typically range between one and five years, but can supply more advantageous interest rates for savers. If you are willing to tie your firm’s cash up for extensive periods of time, fixed rate accounts can prove beneficial.
Beware great deals
Advertised bank headline rates and bonuses can be misleading. Some banks add transaction charges e.g. for withdrawals, on top of headline rates. It is key that you add typical transactions costs to headline rates, before opting for a bank account. Meanwhile, some bank bonus rates only apply for a specific period before falling, often by a considerable amount. Here it is wise to ensure that the account includes a robust get-out clause, so you can reap the benefits of high bonus rates and then switch accounts.
Slash applicable costs
Inform yourself of the fees your company may be liable for with a bank account. With this information, you can avoid paying charges on unnecessary transactions. You could slash cost associated by paying with traditional means like cheques, for instance, by using BACs or automated online transactions. Avoid cheques whenever possible as if they are declined, you could be responsible for additional admin fees.
Seek guidance
It is key that you conduct research before opening a bank account for your business. You would be advised to enlist expert guidance when looking at banking services, ensuring you select the best provider for your firm. As registered bank intermediaries, Turner Little can advise you on UK banking matters.
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.
