As a small business owner, you’re maybe familiar with banking fees. Most major banks charge businesses to have checking and/or savings accounts and each small fee can add up over time. At BlueVine, we understand that this can affect your cash flow, which is why we want to help you save on and avoid banking fees.
In this post, we’re going to show you how to do that so you can find a small business bank account without fees in order to maximize your capital, and grow your business.
How small businesses can avoid bank fees
So why do banks charge fees?
Traditionally speaking, banks charge business checking and savings account fees for a few reasons. First, fees allow them to provide many of the services you use as their customer. Second, fees help to cover their own operating expenses. Third, fees help banks turn a profit.
The good news is, most banks waive their fees if you meet certain criteria. For example, you can save on bank fees if you:
- Maintain a minimum balance. Most banks will waive their monthly account maintenance fees if you have a certain daily or monthly balance.
- Follow transaction and deposit limits. Most banks allow their small business customers to make a certain number of transactions for free each month, usually around 200. And some have a limit on how much you can deposit in cash before being charged a fee.
- Make sure deposits clear. Before writing big checks or transferring funds, make sure your deposits clear. That way, you’ll save on bank fees because won’t be charged an overdraft or non-sufficient funds (NSF) fee.
- Sign up for alerts. You can set low balance alerts to help you stay above the minimum balance requirements and also avoid overdraft and NSF fees.
- Read the fine print. Even banks that claim to be fee-free still charge fees, which is why it’s so important to read the fine print and ask your bank about what fees they charge and when/why. You might find that there are fees for replacing a debit card, adding overdraft protection, sending ACH or wire payments, etc.
What are common bank fees and charges for small businesses to monitor?
Depending on the bank and your unique banking needs, you could be charged nearly a dozen different fees. As you’ll see in the chart below, the fees themselves are fairly low, but if incurred enough times, they could add up to hundreds of dollars each year.
Here are common bank fees for small businesses, plus how to avoid them:
|Fee||What it is||How much it is||How to avoid it|
|Monthly account maintenance||A fee that is charged each month your account is open||Anywhere from $12.00-$30.00 each month||Meet daily minimum balance requirement (usually between $1,500-$3,000) or a minimum monthly balance (usually between $5,000-$15,000)|
|Overdraft or NSF fee||A fee that is charged if you bounce a check or have a negative balance||Usually between $27.00-$35.00||You might be able to get it reversed if you talk to your bank. Otherwise, set up low balance alerts and always make sure deposits clear.|
|Overdraft protection||A fee you pay to avoid NSF fees||Typically around $35||Simply don’t opt in to overdraft protection and you won’t be charged for it.|
|Returned deposit fee||A fee you’re charged if a check you deposit bounces||Usually between $20.00-$40.00 or a percentage of the check amount||You could tell the person who wrote the check when you’ll be depositing it, or potentially ask them to cover the returned deposit fee.|
|Checkbooks||Typically, your first box of checkbooks is free. After that, you’ll have to buy more from your bank.||Usually between $20.00-$40.00 per checkbook, plus shipping.||Opt for ACH payments or use one of these less expensive checkbook providers.|
|Cashier’s check||A check drawn from a bank’s own funds and signed by a cashier or bank teller that guarantees payment to the recipient.||Usually less than $10 per check||They are typically free if you have a premium-level business checking account.|
|Paper statements||Most statements are now provided online. If you opt for paper statements in the mail, you might be charged for them.||Usually $2.00-$3.00 per statement||Sign up for paperless statements.|
|ATM fees||Fees to use an ATM outside your bank’s network||Usually $2.00-$3.50||Stick to using your bank’s ATMs, or get cash back at retail stores when using your debit card.|
|Lost card||If you need a replacement debit card (or want to get one for an employee), you’ll likely have to pay for it.||Anywhere from $5.00-$25.00 depending on your bank and how quickly you need the card.||The best way to avoid this is to keep track of your debit card at all times.|
|Wire transfer fees||A fee banks charge to send or receive payment via wire transfer||Usually $25.00-$30.00 for transfers within the U.S. and $45.00-$50.00 for transfers going outside the U.S. To receive a wire, you might be charged $15.||Nonbank providers typically charge fewer fees for wire transfers.|
|Inactivity fees||If you don’t use your account at all for 6 months or longer, your bank will either charge a fee for each month of inactivity.||Usually between $5.00-$20.00 per month||Make consistent transactions.|
How to avoid bank fees
As you can see in the table above, there are ways to avoid nearly all of the different fees that banks charge business owners. These fee waivers are extremely helpful, but we’re willing to bet that you’d rather spend your time on revenue-generating business activities—not on tracking things like minimum daily balances and monthly transaction limits.
Fortunately, there are ways to avoid bank fees and their fee waivers. You just need to find a bank that is looking out for your best interests as a business owner.
Take BlueVine, for example. We created our Business Checking account specifically for small businesses. There are no monthly or hidden fees, 1.00% interest, and no minimum balance requirements or transaction limits. Because we don’t have the same costly physical infrastructure as banks (i.e. we don’t have thousands of bank branches across the country), we’re able to offer small businesses less fees and more flexibility than most major banks.
Where to find a small business checking account, no fees
Your best course of action is to educate yourself on your bank’s fee structures and other banking alternatives that charge less (or no) fees than traditional banks. From there, you’ll be able to make an informed decision about your business’s banking needs.
Banks provide a much-needed service to their small business customers—which, as we mentioned above, is one of the reasons why they charge fees. Then there are online business checking accounts that offer the same services without fees, like BlueVine Business Checking.
At BlueVine, we offer the same service you’d expect from your local bank branch, but without fees. We understand your need for flexibility in banking—and we believe in transparency, which is why you won’t see any fine print or hidden fees when you open a business checking account with us.
Visit BlueVine Business Checking to learn more and open an account for free, today.
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