When you’re starting a business choosing a bank is more important than you might think. Having a great relationship with your bank and a point of contact can be really helpful. Additionally, finding a bank that won’t charge a lot of fees can end up saving you money that can be spent somewhere else (like getting a new customer!). Here are three things that you should consider when choosing a bank for your startup.
1) ACH & Wire Transfer Fees – When you’re working with contractors and service providers ACH and/or wire transfers can be the preferred method of payment. The cost for sending money varies depending on the bank or credit union. Some institutions may charge upwards of $35.00 to send a wire transfer while others can be as low as $10.00. If you’re planning on sending a lot of wires make sure you go with a bank that has reasonable transfer fees.
2) Point of Contact – Having a real person that you can use as a point of contact can be incredibly helpful when you need to get something done. Having someone who knows your business and can work with you and be available when you need them is an overlooked service by most entrepreneurs. I know a story of someone who needed to send a last minute wire out. They wrote the account information on a napkin, snapped a photo, and sent it to their personal banker. The wire got sent out and the day was saved. And it was because he had a relationship with a real person at the bank.
3) Choosing a Safe Bank – Choosing a safe bank is important when you need to a place to keep millions of dollars from a recent round of funding. The FDIC only insures U.S. deposits up to $250,000 so ensuring that your bank is well capitalized is very important. Imagine if your bank when out of business and took all of your capital with it? You can easily avoid this problem by looking at a bank’s Tier 1 Capital ratio and Texas Ratio using KnowYourBank. While this doesn’t guarantee that the bank won’t go out of business, they are a strong indication of the safety of the bank or credit union that you’re working with.
Who do you Bank With?
If you already have a bank or credit union, which one do you use? What do you like about it? Have a good story or experience? We want to know! Leave a response in the comments below.