Choosing the correct business banking services for your business can be a difficult and troublesome task. With such a multitude of options on the market this choice requires a great deal of research and understanding, not only on the subject of corporate finance but also business banking packages more specifically. This article hopes to explain some of the key types of accounts used within the industry, as well as an idea of how to go about choosing a bank account for business finances.
Bank accounts and their various facilities vary greatly, and should be selected only after a contemplation of your own financial needs has been made. For instance, if your business carries out many transactions daily, an account that caters for this, and charges the minimum amount of money is likely to be the best option.
What follows are details of the various different types of business bank accounts.
Current accounts are the most widely used form of business banking and are ideal or the management of day to day payments and receipts. When looking at a current account it is important to consider whether there are any charges for entering the overdraft and whether any interest is applied when the account is in credit.
For businesses that trade abroad often a foreign currency account is most likely to be the best option. This form of business banking is particularly useful if transactions to your business are often made in currencies other than that of your nation. It can help to keep costs down but more importantly is an excellent way to manage foreign transactions.
Instant access deposit accounts are frequently used by businesses to hold finances that are not needed for day to day spending. Typically they allow funds to be transferred from the current account for safe keeping, although they can be accessed at any time. Similarly a term deposit account can be used for this purpose; fundamentally this carries out the same purpose as any other deposit account, although unlike the instant access variety, account holders must wait a period of time before having access to their funds.
Merchant accounts are most often used by shop owners, and restaurants. Essentially these act much like a current account but allow a business to process transactions from debit and credit cards. These can be extremely useful for companies in a range of industries.
When choosing a bank it is important to see which of the preceding account types they can provide. Additionally it is also worth research a particular bank’s loan and finance packages, particularly for start up companies that may require additional capital when beginning operations. Ultimately by researching the options in detail it should be possible to have effective banking services that will aid the day to day running of the business.