Exploring Contractor Bank Accounts

When looking for a personal current account most of us just go with the bank we have always even with or if it is our first account (normally when we are a lot younger) we look at who is willing to give us a credit card and an overdraft facility. When it comes to choosing a business bank account you need to be a lot more discerning. That’s because the business bank account will be tied to the every day running of your business and you will want it to be hassle-free, flexible, convenient and as inexpensive as possible. You will also want it to be something that stays with your business over the years and helps your business to grow and will, at a later date be able to help you do that with products such as mortgages, loans and insurance.

So how do you find a bank that you think you can work with and build a good relationship with? This article will explore some things to bear in mind when looking for the right bank account for you:

Don’t Fall For Introductory Offers

Whatever you do don’t let them sweet talk you into signing with them just because you get a brief cash bonus, some stuffed toys or a free piggy bank. People change banks very rarely so chances are when you sign up with one, you will be with them for a while. Ignore introductory offers and find out about the product itself.

Don’t Go With Your Personal Bank For The Sake of Convenience

Yes, you’ve been with them for years but they may not be right for business. Forget that personal account and look at them in the same way you look at every other bank. The only exception to this rule is if it is a small, local bank that offers exceptional service and where the bank manager knows you personally. If you have a good relationship with the bank manager that might give your bank a head-start when making your decision.

Do Your Research and Shop Around

Start off by comparing all the usual stuff – bank charges, transaction charges, fees, rates of interest – and then dig deeper. Use the internet and explore money websites, small business websites and comparison sites. Find out what the majority of people are saying about the banks you are considering. Narrow your choice down to one or two contenders and then search online for reviews. Bear in mind that you will always find some people complaining about a product, but if the majority of the reviews are good, then you can feel confident in the service.

Is It Convenient?

This will depend how much of your business you want to do in the real world and how much you are happy to do online. If you prefer to have face to face contact with your bank manager then you need to look into the location of your nearest branch. For people in retail it is essential to have a bank very close so that they can deposit savings every day, but for contractors this might not be so essential. And even if you opt to do most of your banking online it would be good to find out how convenient and easy it is to get hold of a bank manager in person or by phone if you want to talk to them;

Easy To Talk To?

Will you be assigned one manager to handle your account – someone you can always talk to? Is the phone service handled in house and in the UK or has it been farmed out to a foreign country? And does your nearest branch have its own small business centre or a dedicated small business manager who knows their way around businesses like yours and can offer advice? 

Do They Charge Standing Charges and / or Transaction Charges\? How Do They Compare Against Other Banks?

Many banks will charge you monthly or quarterly to bank with them when it comes to business accounts. Is this instead of transaction charges or is it in addition to them? Work out how much they would be charging you in total (both standing charges and transaction charges is probably too much) and then compare that with other banks. Also, think ahead – will you be making a lot of physical transactions with cash and cheques? If so then you might prefer to pay a standing charge and save yourself some money on the transaction charges. On the other hand if you will be making few transactions save for the occasional electronic transfer then you might be better with transaction charges but no standing charge.

What Interest Rates Do They Have On Business Savings?

If you are just starting out this might not be relevant but later, if your business has spare cash dont be afraid to compare banks to find out which ones offer the best returns on that cash.

Lastly, remember to treat your bank as you would any other service. Research them, shop around and then choose one; but if they are disappointing you, don’t be afraid to move to someone new.