10 ways to avoid business banking fees

Every naira counts when you are running a small business. And when it comes to banking, small business owners should understand that business and credit card accounts may incur more fees — often at higher amounts — than individual accounts. So, it is important to compare fees closely when shopping for a bank to meet your business needs, according to www.bankofamerica.com.

Here are 10 ways you can lower and avoid business account fees:

Maintain minimum account balances: Many banks will waive the monthly maintenance fee for business accounts, if you maintain a minimum balance. Another tip: Sign up for online alerts to be notified if your balance is in danger of dropping too low.

Link your bank accounts: If you have multiple accounts with the same bank, you may be able to qualify for a monthly fee waiver by linking them together, which will give your business a higher combined balance. Other qualifying accounts may include savings, money markets and fixed deposit.

Bundle features to save: Similar to linking, adding additional features to your accounts may allow your business to avoid monthly fees. Ask your bank about adding debit or credit cards and using payroll services — and review the business account comparison guide to see how using these services can affect fees.

Get overdraft protection: Overdraft fees are frustrating. Find out if your bank offers overdraft protection through linked accounts. You may also be able to set low-balance alerts via email or text message.

Ask about transaction and deposit limits: Do you make a high number of monthly transactions with your business account? Some banks charge a fee per transaction over a set limit, usually around 200 or more for a basic account. (The limit may be lower for some products targeted to startups and sole proprietorships.) Others charge a fee for cash deposits beyond a set naira amount. If your business makes mostly cash deposits, it is wise to search for an account with a high cash-deposit threshold before fees takes effect. Review your transaction history to determine where your business falls on this spectrum.

Another tip: Take stock of your credit card payment habits. If you regularly pay off balances every month, a small business credit card with more perks but a higher annual interest rate could be worthwhile. On the other hand, if you tend to carry over charges every month, a card with a higher revolving limit but a lower interest rate will probably save you more money in the long run.

Be wary of fees for additional cards: Do you plan on issuing credit cards to your employees so they can make purchases for your business? If so, look for banks that offer additional cards at no extra cost.

Keep an active account: Some fees may be waived when you spend a minimum monthly amount on a business debit or credit card — sometimes.

Avoid transfer fees: If you plan to move funds between bank accounts on a regular basis, make sure you choose a bank that has an option for free transfers.

Compare travel perks: Will you travel a lot? If so, compare business credit cards that connect your purchases to travel reward and frequent flyer programmes. Be aware that many airline-affiliated business credit cards require you to pay an annual fee; so it is important to weigh that cost against the travel benefits you gain.

Consider your future needs: It is still important for small business owners to develop a relationship with a bank, even as more banking is being done online. As your business grows, its needs will change. If your business is just getting off the ground, think about the kinds of services and features that may be useful — and financially beneficial not just today, but years from now.