Five things to think about when choosing a business transaction account
02 Aug 2016
If you are a small business owner, it can be difficult to find time to research your business transaction account options. It is worth investing that time though, as there is a big difference between the great-value and lowest-value products available.
Here are five key questions to ask yourself when comparing business transaction accounts.
What is your volume of monthly transactions?
Depending on your stage in the business cycle, your volume of monthly transactions may have increased or decreased significantly since you opened your existing accounts.
The features and costs of transaction accounts are often targeted towards either low-volume transactors or high-volume transactors and using an account that doesn?t suit your business transaction behaviour and cashflow can cost you a lot! Review the past six months of business operation to determine your average monthly transaction volume.
What mix of business transactions do you make?
Do you still need cheque facilities? How often do you use an ATM? How do you pay your employees? Is branch access important or would internet and telephone banking work better for you? How do your clients usually pay you? Analysing the mix of transactions that your business commonly uses will help you to target the right type of accounts for your needs.
Compare Business Transaction Accounts
What fees are charged on the type of transactions you usually make?
Some of the common fees that may be charged on your business transaction account include:
- Account Keeping Fee
- Cheque deposit/withdrawal fee
- Branch withdrawal fees
- Over-the-counter transaction fee
- Electronic transaction fee
Research and understand your account, your fee-free thresholds and how fees are charged once these thresholds have been exhausted.
Canstar has compared 83 business deposit products from 38 providers to compare the fees charged across the accounts. Based on those products, average account fees in 2016 were found to be as follows:
| Account keeping fee | Direct Debit | Direct Credit | ATM withdrawal own network | Branch withdrawal | |
|---|---|---|---|---|---|
| Transactor | |||||
| MIN | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| MAX | 32.00 | 1.50 | 0.20 | 5.00 | 5.00 |
| AVG | 9.48 | 0.14 | 0.02 | 0.50 | 0.94 |
| Business Saver | |||||
| MIN | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| MAX | 5.00 | 1.00 | 0.00 | 0.00 | 10.00 |
| AVG | 0.21 | 0.06 | 0.00 | 0.00 | 1.41 |
| Cash Manager | |||||
| MIN | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| MAX | 10.00 | 1.00 | 1.60 | 1.60 | 2.50 |
| AVG | 2.58 | 0.18 | 0.18 | 0.47 | 1.01 |
| Branch Deposit | Cheque Withdrawal | Cheque Deposit | Internet transfer | EFTPOS Transactions | |
|---|---|---|---|---|---|
| Transactor | |||||
| MIN | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| MAX | 5.00 | 7.50 | 5.00 | 5.00 | 5.00 |
| AVG | 0.64 | 0.83 | 0.55 | 0.16 | 0.41 |
| Business Saver | |||||
| MIN | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| MAX | 3.00 | 0.00 | 2.50 | 0.25 | 1.00 |
| AVG | 0.58 | 0.00 | 0.26 | 0.01 | 0.04 |
| Cash Manager | |||||
| MIN | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| MAX | 2.50 | 2.50 | 1.60 | 1.60 | 1.60 |
| AVG | 0.38 | 0.68 | 0.43 | 0.18 | 0.45 |
Source: Canstar. Based on 83 business deposit products researched by Canstar for 2016 Business Deposit Star Ratings. Does not include all business deposit accounts on the market.
Can you change your mix of transactions?
More and more business banking is being done online and with many accounts now offering electronic transactions at low, or even no cost it?s a great way to save money! Not only are they cost-effective, online transactions are easier to reconcile when compared to the traditional paper, meaning less time spent on administration.
So consider what additional transactions you could be doing online and your general transaction behaviour
Things to think about:
- Do you pay your employees by direct credit? Using a payroll package or bulk payment template will typically only count as one debit transaction on your account.
- If you still pay bills by cheque think about switching to direct credit via internet banking.
- If you receive multiple cheques think about bundling them into one deposit.
Compare Business Transaction Accounts
How do others transact with you?
Consider streamlining your customer payment options. Cheques, for example, are expensive to use, time-consuming to keep track of and can be difficult to balance each month. Electronic transfers provide a much cheaper method of paying suppliers and receiving payments, with an added benefit of being considered as cleared funds. Streamlining your customer payments can enable you to choose a simpler – and cheaper – transaction account.
Whether it’s long overdue or you simply feel you’re entitled to a better deal, now is a good time to review your transaction account options. Check Canstar’s latest business transaction account ratings.
Business transaction Account Summary
 |
What is your volume of monthly transactions? |
| What mix of transactions do you make? | |
| What fees are charged on the type of transactions you make? | |
| Can you change your mix of transactions by doing more online? | |
| How do others transact with you? |
Canstar has researched and rated 83 business deposit products from 38 providers to determine which accounts offer outstanding value for businesses. You can compare business savings accounts here and compare business transaction accounts here.
