Your bank could be draining $2,460 a year in fees from your business transaction account, warns CANSTAR.
On top of transaction accounts generally earning zilch in interest rates, hefty monthly fees are a double whammy for business owners trying to stretch every dollar.
CANSTAR pinpointed monthly fees on a transaction account as one way business owners could plug the leak in outgoings.
If your business puts through a lot of transactions, say 200 a month, and you happen to be using an account that charges the top fee of $205.80 per month, you can kiss goodbye to the best part of $2,500 a year.
A smaller business, on the other hand, could be up for in excess of $600 a year in transaction fees if they used an account with monthly fees of $50.
We looked at 58 business transaction accounts across two business profiles, those who make a high number of transactions – 200 – a month and those who sit at around 50 transactions a month.
Fees for those in the high transactor bracket range from zero to $205.80, averaging at $60.88. Seventeen of these accounts charge over $70 per month.
For lower transactions, you can expect to pay zero to $50.34 per month, averaging almost $13. Fifteen of the 58 accounts in the report charge monthly fees in excess of $20.
These days business banking is done through a mix of online and branch with various payment and deposit options that range from direct debit to good, old fashioned cheques. Identifying how you operate and the current cost of your banking is the first step towards saving real money.
We suggest you look for an everyday transaction account that charges no or very low monthly fees for your type of transacting, and don’t be put off by the hassle of changing accounts. Banks rely on small business not having the time to switch. Ask your existing bank if there is a better option for you.
With the majority of small business concentrating on keeping their collective heads above water at the moment, there’s never been a better time to evaluate your current business practices with a view to getting a better deal.
Comparing business banking products is complicated and is something small business has neither the idle staff nor the inclination to do. That’s why CANSTAR stepped in with an annual comparison of products and services of real value to small business.
The suite of business banking products compared and rated included 113 term loans, 42 credit cards, 63 overdrafts and 85 deposit accounts.
CANSTAR’s business banking star ratings report assesses business credit cards, deposit accounts and loans covering residential and commercial lending for both term loan and overdraft categories. It will help you make an informed choice of suitable banking products, even if it is just to see how your current bank stacks up.
Article updated 12/09/2012
