Business banking fees: What they are and how to avoid them
Learn about common business banking fees and how you may be able to avoid them. Presented by Chase for Business.
- Some business bank accounts may charge monthly service fees or fees that are triggered by certain financial activities.
- Some examples of common banking fees include monthly maintenance fees, overdraft fees, ATM fees and foreign transaction fees.
- You may be able to avoid some fees by maintaining minimum account balances, bundling banking services and using in-network ATMs.
Some online financial institutions advertise “free” checking. Traditional banks may charge fees for various reasons; some fees are routine, and others may only be triggered by certain transactions.
In this article, we’ll discuss common types of banking fees and some ways to avoid them.
Benefits of a fee-bearing account
Some banking fees help provide access to essential business services. Here are some features common with fee-bearing accounts that may be beneficial for your business:
- Physical branch access: Traditional banks may charge maintenance fees, but they often provide the physical infrastructure that cash-heavy businesses require. If a business handles physical cash or needs in-branch services, they may prefer a traditional brick-and-mortar bank to make cash deposits and get change.
- Higher volume limits: Fee-bearing accounts (or higher-tier accounts) may offer higher allowances for transactions, cash deposits and wire transfers, which can make them helpful for scaling businesses.
- Relationship banking and lending: When business owners pay for an account at a traditional bank, they are often buying into a relationship. Having an established history with a traditional bank and starting to build business credit may make it easier to get resources or support when you need business loans for future expansion.
- FDIC insurance: FDIC deposit insurance helps protect money in deposit accounts at FDIC-insured banks.
- Advanced treasury management tools: Fee-bearing accounts often come with tools that larger businesses may need. This includes services like bulk ACH processing for payroll and seamless integrations with complex enterprise accounting software. Note that integrated tools may come at an additional cost.
- Dedicated support: Free accounts may rely on chatbots or email support as customer service tools. It is generally more common for fee-bearing accounts to provide access to a dedicated business banker or priority customer service line.
Common business banking fees
Many business checking accounts include different types of fees. Some fees can be monthly ongoing fees while others may only be triggered after certain events, like overdrawing on your account. Being aware of these charges can help you select accounts with fewer fees or take measures to potentially avoid them.
Here are some common business banking fees:
Monthly maintenance fees
Banks may charge monthly maintenance fees for keeping your account open. These fees support the upkeep of your account and access to assistance. Many banks allow you to waive this fee by meeting requirements such as holding a minimum balance or connecting multiple accounts.
Overdraft fees
When you spend more than your available balance, overdraft fees may be incurred. This fee can help the bank manage the risk involved in covering transactions that surpass account funds. Some banks have overdraft protection programs that might help prevent these fees.
ATM fees
Using an out-of-network ATM may lead to fees from both the ATM owner and your bank. This could become costly for businesses with regular cash transactions. Opting for a bank with a widespread ATM network or using in-network ATMs can help you keep these expenses in check.
Wire transfer and ACH transfer fees
Wire transfers and ACH transfers are two options for sending or receiving money electronically, often for large or urgent transactions. Wire transfer fees and ACH fees may differ depending on factors such as domestic vs. international transfers. Some business accounts include a set number of complimentary transfers, so you may want to review account details.
Foreign transaction fees
If your company operates internationally or makes overseas purchases, you may be charged foreign transaction fees. These fees offset the bank’s costs for currency conversion and processing international payments.
How to waive or minimize business banking fees
While some business banking fees are standard, you may have several ways to help waive or reduce them, including:
- Maintaining minimum balances: Keeping your balance above the bank’s set threshold often means monthly maintenance fees can be waived.
- Bundling banking services: Banks sometimes offer package deals that combine checking, savings and merchant services, resulting in potentially lower costs.
- Following the deposit limit: Deposit limits vary by business bank account. You can check with your bank to find out how much cash you can deposit per statement cycle without incurring fees.
- Avoiding overdrafts: Regularly monitoring your account and setting up alerts can help you steer clear of overdraft charges.
- Using in-network ATMs: Relying on your own bank’s ATMs can reduce or eliminate fees. Alternatively, some business checking accounts may waive a limited number of out-of-network ATM fees each month.
- Monitoring your account activity: Checking your statements periodically can help identify habits that trigger fees, so you can adjust accordingly. You can also set up alerts to help identify fees as soon as they occur.
- Planning strategic payments: There may be additional fees for expediting electronic payments, like ACH fees and wire transfer fees.
- Batch deposits and payments: Processing multiple checks in a single deposit may count as fewer items if you have a monthly limit on deposits and payments.
Taking a proactive, informed approach to business banking fees may help you choose a bank with little to no fees or may help lower or avoid some business banking costs. You may also consider switching business banks if you find that another bank is better suited for your business needs.
Frequently asked questions
Do business accounts have different fees than personal accounts?
Business accounts generally have their own fee structures due to higher usage, regulatory demands and additional business services.
What are the most common business banking fees?
Banks generally assess charges for monthly account maintenance, overdrafts, out-of-network ATMs, wire transfers, ACH transfers and foreign transactions, depending on the account type and how it’s used.
How can I avoid or reduce business banking fees?
You may consider selecting an account that fits your needs, keeping required balances, using in-network ATMs and frequently reviewing your account to help manage unnecessary charges.
