As I mentioned in a list on the steps in setting up a corporation, obtaining a business bank account is a good idea. The reason being is that the customers can pay you via company name instead of personal name. As well, it helps during tax season when business income/expenses are separated from personal income/expenses.
I’ve discovered that most small business bank accounts are expensive. The big banks really try to scrape every penny out of business owners via business products, it’s almost nauseating. Thankfully, I own shares in most of the big banks which helps calm my stomach.
The small business accounts offered by the big banks really vary in terms of cost and features. I went through the lowest cost accounts possible (I don’t like bank fees) and what they offered.
Generally speaking, all the banks offered both a set monthly fee plan where you get so many transactions per month in addition to offering “pay as you go” plans.
As of August 2009:
|–||CIBC||Royal Bank||TD Bank||Scotia Bank||BMO|
|Min Balance for No Fee
||n/a||n/a||$8,000||$5,000 (paygo only)||$4,000|
|Flat Fee / Month||$11 / 10 trans||$20 / ~ 20 debit 10 credit 20 deposits||$12 /5 deposits 7 debits||$12 – $16 / 15 trans||$9.50 for 15 trans /month|
|Extra Cheque Dep||$0.16 + $1.25||$0.20 + $0.95||$0.18 + $1.00||$0.18 + $0.85||$0.18 + $1.00|
|Extra Cash Dep||$1.80+ $1.25||$2.15+ $0.95||$2.15 + $1.00||$2.25 + $1.00||$2.15 + $1.00|
|Pay Go Monthly Fee||$10.00||$6.00||$7.95||$9.00||$6.00|
|Cheque Dep||$0.16 + $0.90||$0.20 + $0.95||$0.18 + $1.00||$0.18 + $0.85||$0.90|
|Cash Dep||$1.80 + $0.90||$2.15+ $0.95||$2.15 + $1.00||$2.25 + $1.00||$2.15|
|Extras||1 free trans for every $500 in account||Monthly paygo fee is waived if trans fees are greater than $6||–||1 free trans for every $1,000 in account||–|
For me, I was looking for something as low cost as possible, even if it meant keeping a relatively high balance.
Looking at the table, it was a no brainer to go with the BMO small business account as it offered free banking if I keep a balance of $4k. In addition, they waive the fee for the first 3 months for new start up businesses.
Do you have a business account? If so, who did you go with?-> If you would like to read more articles like this, you can sign up for my free newsletter service below (we will not spam you).