If you have formed a limited company one of the ‘must do’ jobs will be to choose the best bank account for the new business.
Of course, accountants like us at AIT may already have done this for you, or you may decide to go with the bank you already deal with but most people just need a bit of guidance when opening a limited company bank account. So here are our top tips.
- Don’t just choose a business account with the bank where you hold your personal account because it’s the easiest option – compare several banks and see what ongoing transaction costs you will have to pay, as well as interest rates.
- All the big banks offer up to 2 years’ free banking to start-up businesses, but the incentives to sign-up are not as appealing if you are moving bank accounts and have been operating for some time.
- Always make sure to compare interest rates between accounts. As most current accounts offer almost zero interest, focus on the rates offered on deposit accounts, where you may decide to place any tax liabilities, such as VAT and Corporation Tax.
Also remember if you want to accept card payments, you will need to set up a merchant account and banks charge a percentage of each transaction for this.
- It goes without saying that online banking is a must. It saves time on everything from paying your staff to setting up direct debits and viewing your transactions. However, the quality of sites and online services can vary a great deal between banks. Nothing is more infuriating than not being able to log on or speak to a ‘human’ if the need arises.
- If you want face to face contact, then find a bank which will provide you with a dedicated small business account manager. A good relationship with this person may help you greatly as your business develops.
- Other banking facilities, such as overdrafts may also have to be factored in.
- Lastly, be sure to find what transaction charges apply to your account after any free period has come to an end.
We hope this advice has been helpful. It is a big decision opening a Limited company bank account, so take your time in making your choice, and if you need any further advice, just get in touch, we’d be happy to help.