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Bank Accounts - Overview

When deciding on a new business bank account, it is not uncommon for people to select the same bank that they hold their personal account with. There may be some logic in this as your existing bank will have a track record of how you manage your personal finances. If they are well managed then they may be more supportive towards your business.

However, it is always a good idea to do some shopping around as the standard of service and costs will vary from bank to bank. Mosts banks will offer a new business start-up an initial free banking period of between 12 to 24 months. There are some banks that will offer you free banking for life. There may however be certain restrictions on the way the account is used, i.e. limiting the number of transactions.

You need to look at what each of the banks offer and how much they charge. You need to consider each banks charging structure in line with the requirements of your business. If, for example your business will be dealing largely with cash you need to look at what the banks will charge you for the amount of cash that you pay into your account. Charges are normally applied to your account either monthly or quarterly and the bank should provide a breakdown of how the charges have been calculated. It is important to keep an eye on your bank charges. If you are unhappy with the level of charges you can always shop around or sometimes even negotiate with your own bank.

Most banks will provide useful information for new business start-ups and some have a dedicated team of business advisors.

Most businesses will require a current account and a savings account which will pay higher levels of interest when there are surplus funds.

It is worthwhile setting up internet banking and telephone banking as it is possible to look at balances and transactions on a daily basis. In addition payments can be made to suppliers over the internet, employees can be paid direct, direct debits and standing orders can be set-up, banking stationary ordered, it is even possible witth some accountings systems for them to electronically interface with the banks system to assist with your bank reconciliations.

If you are dealing directly with the public you may need to set-up a business merchant account which will allow you to take payments using both credit and debit cards.

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