How Business Checking Fees Work

How BUSINESS CHECKING FEES WORK With banks offering an average of 5 different business checking accounts, how does a small business owner choose an account? NerdWallet explains the three main business checking fees and shows you how costs can vary for different types of businesses. TYPICAL ACCOUNT FEES (COMPILED FROM OVER 130 BUSINESS CHECKING ACCOUNTS) FEE Monthly Service Excess Transaction Cash Handling What is it? A per-transaction fee charged when the pre-specified monthly transaction limit is exceeded A fee charged per each $100 exceeding the pre-specified cash deposit limit A set monthly fee How much? $13 Average Monthly Service Fee $0.40 Average Per Transaction $0.15 Average Cash Handling Fee Fee Monthly Service Fees Range From Per Transaction Fees Range From Cash Handling Fees Range From $O-$50 $0-50.75 $0-50.75 175 $10,000 Average Monthly Per Month Average Transaction Limit Cash Deposit Limit How can I avoid it? Accurately forecast your transac- tion volume (including checks paid, ATM and teller deposits, ACH credits and ACH debits) so that you Find an account where you can Accurately forecast your cash meet the balance requirement to waive the monthly fee (typical deposits so that you do not exceed the limits average balance requirement = $10,000) do not exceed the limits YOUR TYPE OF BUSINESS DETERMINES YOUR FEES NERDWALLET APPLIES THE AVERAGE FEES, AS OUTLINED ABOVE, TO THREE DIFFERENT BUSINESSES WITH VARYING NEEDS AND BEHAVIORS. FEES ARE BASED ON AN ACCOUNT WITH A $13 MONTHLY FEE, TRANSACTION LIMIT OF 175 (EXCESS TRANSACTION FEE OF $0.40) AND A $10,000 CASH DEPOSIT LIMIT (CASH HANDLING FEE OF S0.15 PER $100) RESTAURANT ONLINE RETAILER NONPROFIT BUSINESS PROFILE •Makes many electronic (ACH) payments to pay their suppliers and have very little hard cash to deposit •$2.000 cash deposited per month •Has fewer employees and suppliers than a for-profit business, resulting in a moderate amount of cash deposits and few monthly transactions •Has a lot of cash payments from customers •$20,000 cash deposited per month •175 transactions per month •$5,000 cash deposited 400 transactions per month •100 transactions per month FEE CALCULATIONS $13 monthly fee $10,000 excess cash x $0.15 per $100 = $15 O excess transactions x $0.40 = $0 $13 monthly fee $0 excess cash x $0.15 per $100 = $0 $13 monthly fee SO excess cash x $0.15 per $100 = $0 O excess transactions x $0.40 = $0 125 excess transactions x $0.40 = $50 $336. $756 Total: $156. Total: Per Year Total: Per Year Per Year Fee calculations based on Business Profile Fee calculations based on Business Prole Fee calculations based on Businees Prole As illustrated above, the same business checking account leads to varying fees for different businesses. Business checking accounts are not one-size-fits-all. To avoid incurring unnecessary fees, find an account with transaction and deposit limits that are tailored to your business's needs nerdwallet We de the homework for you http://www.nerdwallet.com/business-checking-accounts/ http://www.nerdwallet.com/blog/2012/small-business-checking-primer/