One of the key steps, before you launch a new business or run an existing one, is setting up a business bank account. Almost all the major banks in the US today are providing business banking services. On the surface level, it might seem that the business banking features across all the banks are similar, but there are some key differences at a very granular level that must be kept in mind before you choose a specific bank for your business banking needs.
1. Digital Neobank: If you are looking for a digital-first experience then it is advisable to go with a new-age neobank that has partnered with an underlying US bank rather than going with a traditional legacy bank or a digital version of a legacy bank. New-age neo banks are built on modern architecture with state-of-the-art bank cores. Also, since their business model is asset-light owing to a digital-only presence and the absence of physical branches, they can pass on the cost-saving benefits to their end customers in terms of lower fees and higher interest yields. Additionally, such banking options enable instant digital onboarding with highly advanced KYC/KYB solutions and paperless as well as minimum documentation workflow automation.
2. FDIC Insurance: It is recommended to choose only that bank that is either directly or indirectly via an underlying sponsor bank extending FDIC insurance on your deposits. Typical FDIC insurance extended by the banks is around $250,000.
3. Payment Modes: Try to select a bank service provider which allows you the option of making payments across different modes and channels as per your business needs. A good business bank account will allow you to make transfers via ACH (standard, same-day, next-day), checks (physical and remote), wires (international &domestic), and card payments (physical and virtual).
4. Niche Focus: Instead of selecting a bank that provides generic solutions across customer segments, try to subscribe to the services of a that has a very niche focus. Banks with a niche focus understand the exact pain points of their customer target base and look to resolve them in a much more personalized way.
5. Fee Structure: A lot of banks today make money by charging their customers a host of fees and penalties, most of which are hidden in the fine print of the customer-bank contract. When shortlisting your business bank provider, ensure that it is following the policies of ‘low-fee’ & ‘no hidden fees. It is advisable to check what all fees your bank is charging around ATM withdrawals, overdrafts, card issuing, card replacement, payment transactions, account opening, monthly service maintenance, etc.
Otterz is a new-age digital first-first neo bank focused on serving the business banking needs of small businesses in the US. It allows small business owners to make payments via ACH, check, wire, and cards. The bank has a very simple and transparent low-fee structure with no minimum account balance maintenance requirements. The bank's core technology under the hood is highly advanced with deposits being FDIC insured via a US sponsor bank partner. Customers can sign up and create an account instantly through a completely digital process with minimum documentation, no paperwork, and instant account activation.