Every small business owner knows just how important every penny is. You leave a bit here and spend a bit there, and before you know it, you’re in debt. That’s why you need to find ways to minimize your banking fees to the best of your abilities.
One way to do so is to minimize banking fees. These charges can creep up on you and build up over time. However, you can choose to be proactive and stop that from happening. Below are some tips on how to do that.
Consider an Online Bank
Online banks can provide you with the same services and benefits as brick-and-mortar ones with fewer extra charges. So one way to minimize banking fees is to opt for an online-only bank. They do not have physical locations, but online banking allows you to do almost anything in a couple of clicks. This includes everything, from writing checks to making scheduled payments.
Online banks don’t have to deal with the cost of maintaining a physical space and staff taking care of it. Thus, they can afford to introduce lower charges for the same services compared to physical banks.
Shop Around Before You Decide on the Bank
If you’d rather be able to visit a physical branch, you can still find a great bank with some research. However, don’t settle for one too quickly. The best way to minimize banking fees for your small business is to find a trustworthy financial establishment.
It’s important to have a clear picture of your finances so that you can assess your banking needs. This goes for both your current and future needs. They should inform your ultimate decision. Maybe a bank is great, but it charges a lot per transaction, and you make many of them monthly.
Try to Negotiate Lower Fees
Overall, banks are willing to meet the needs of small business owners. This is especially true for smaller, local banks. They will often agree to your terms or meet you halfway because you are a valuable customer.
To minimize banking fees, once you narrow down your search, you can sit down with the representatives of several banks. Tell them about your financial needs. Ask about all the charges and try to negotiate for lower ones. If you tend to use some services a lot, they might agree to reduce the standard charges for them. Your account manager will determine if this arrangement works for them.
Maintain the Minimum Balance
If your balance drops lower than the required minimum, the bank might charge you a minimum balance fee. This is actually a monthly account maintenance charge, and you can avoid it easily if you’re careful. There are numerous banks out there that don’t impose these charges, so check if yours does.
Make sure to always have the required amount in your accounts if you want to minimize banking fees for your small business. Many banks allow you to set up alerts that notify you if you’re nearing the minimum sum.
Avoid Overdraft Charges
One of the most efficient ways to minimize banking fees is to check your balance often. Always know at least approximately how much money you have in there. If you overdraw your account, you’ll face additional charges. Overdrafts happen a lot to people who use checks often, so be especially careful about your checking account.
Keeping your balance negative for a long time can also influence your relationship with the bank. They might even close your account, report you, and make it difficult for you to open a new account anywhere. You can also get alerts for a low balance via text or email.
Beware of ATM Fees
If you tend to use ATMs a lot, you need to look into the bank’s rules about them. Most banks don’t even impose ATM fees, but some put a limit on how much you can withdraw for free. After that, a charge applies.
Avoiding other banks’ ATMs whenever possible is another way to minimize banking fees. Your bank might also be part of a network of banks that allow for the free use of ATMs of any member. They usually list their partners on their website. What’s more, most banks have apps that allow you to locate the nearest fee-free ATMs.
Don’t Be Late on Your Credit Card Payments
Late credit card payments can cost you a lot. The best way to avoid any charges related to them is to pay off your monthly balance for every billing cycle. Apart from the annual charge, you may incur a late payment fee.
What’s more, check your cardholder agreement to see how late payments affect your interest rates. Another thing to watch out for if you want to minimize banking fees is making payments abroad. These usually incur a high fee per transaction.
This one is quite logical — if you have more accounts, you’ll have more extra charges to pay. Sometimes, it seems reasonable to keep accounts with different purposes separate. However, consolidating them is a great way to minimize banking fees.
Why pay double for monthly maintenance, for example, when you can slash the expenses in half? Linking accounts is also a great way to make sure your balances are never negative and that you maintain the minimum balance requirements.
Ask If They Provide Bundled Services or Special Offers
If you see a recurring trend in your banking history, you can use that to minimize your banking fees. Then, check if your bank offers bundled services and design a bundle that works for you. This way, you’ll need to pay a fixed monthly fee instead of paying many individual ones.
Of course, if you overstep the predetermined number of transactions, for example, you’ll incur additional costs.
Moreover, if you’re starting a business, you could look around for special business offers. Many banks offer fee-free services to new businesses for a year. You can use this to your advantage.
If you were wondering how to minimize banking fees for your small business, try these tips and slash your expenses.