Choosing the right bank account is something all businesses need to do - some more than once.
If you're choosing your first bank for your business, we suggest you take a look at our guide to business banking for startups.
If you're interested in what switching a bank account entails or you're interested in gauging how securely your current bank holds your money, or what financing options you might expect from your bank, then read on.
Since we know her well and always value her views, we asked experienced small business banking expert and growth adviser at Natwest, Sharniya Ferdinand, to collaborate with us in producing this pragmatic guide to your options and what you should look out for (in fact, Sharniya did all the hard work!).
Switching your business
You might want to switch your business for a variety of reasons. We don't cover them here, except to acknowledge that some banks now offer specialist banking services for small businesses, and we recommend that you keep in touch with what's on offer, to ensure you're not missing out on anything that might make a difference to your business.
How to switch
Most banks will be members of the Current Account Switching Service. This means if you're switching your business bank account, the entire process of switching must be completed, for free, by the relevant banks involved, within 7 working days. (You are, however, able to request a specific switching date if preferred and outside of the 7-day minimum period.)
The Current Account Switching Service and is backed by the Current Account Switching Guarantee. The guarantee ensures that all your direct debits, standing orders and bill payments will be switched to your new choice of bank within 7 days. Unless otherwise requested, on your switch date, your old account will be closed, and the full balance will be transferred over to your new account and all payments will be redirected also.
If any payments are made into your old account in error, these will be transferred to your new account and that redirection arrangement will continue, for free, for a period of 13 months from your switch date. The guarantee also includes an obligation on the part of your new bank to ensure that the senders of any redirected payments are notified of your change of banking arrangements and the new account details are provided to them.
And if anything goes wrong with the switch, the guarantee also means that your new bank will refund you any interest that you pay, or lose, as a result of the switch not going to plan. For business customers of high street banks, those businesses that meet certain turnover levels may also be eligible for an additional Relationship Management service. Relationship managers can support business owners with business account reviews and advice on financial services that may be useful to them.
Most banks will have a dedicated business team who'll be available to support you with your financial needs. This service may be available over the phone or face to face. In some instances, the face-to-face service is only available if your business meets certain criteria or if your business has specific needs.
Some banks have a partnership with the post office, so that payments can be made into and withdrawn from your account over the counter at the post office. If this facility is likely to be important to you - for example, if you handle a lot of cash in your business - then you may want to consider which banks are partnered with post office branches that are local to you.
You should also be able to manage your account digitally using your computer or your mobile phone. Online and mobile banking provide a way for you to manage and keep track of your finances 24/7, including viewing account balances, making payments to staff and suppliers, transferring money between your accounts, and accessing statements.
There are some specialist banking facilities as well. Sharniya explains a bit more about these below.
The security of your bank account and what it contains is really important. It's not just safety of your money, it's also all the data that the bank holds on you and how the bank conducts itself.
Always look at the tools a bank has in place to keep your bank account safe and secure.
How good banks keep you safe when you're online banking
Banks will and should have fraud detection systems in place, including secure log on and automatic sign off, as well as additional check features in place when you set up/make a payment. To find out about your chosen bank's security promises, go to their website and search 'fraud' or 'security'.
Some of the high street banks also have an additional feature in place to keep you safe when you bank online. For example, IBM's security software Trusteer Rapport can sometimes be downloaded through a bank's website and when you log into online banking. IBM Rapport protects you by, for example:
- Confirming that you're really connected to your bank, not a fraudulent website
- Locking down your connection between your machine and your online banking
It doesn't work on mobile and tablet devices, however. Your bank should also have a security centre and or fraudulent activity process in place to support you if you are the victim of fraud. If you recognise a fraudulent transaction has taken place on your account, you should contact your bank immediately. The earlier they know, the more they can do to prevent you suffering (more) harm.
Top tips for keeping yourself safe online and on social media
1. Use antivirus and firewall software on all your computer equipment
2. Keep your computer and browser up to date
3. Use only secure networks - be wary of coffee shop and other public wifi spots
4. Use strong passwords - or password generator software, e.g. Lastpass. And change your passwords regularly (if you're not using a password generator).
5. Always limit the amount of information you share with third parties. In particular, information such as your address (home, school or workplace), date of birth, postcode, job title or information about your schedule or routine
6. It's not the most exciting thing to do, but do read the small print of privacy policies. Some sites may still share information like email addresses or user preferences, although the GDPR regime makes much of that activity unlawful, if it is done without your express consent
7. The internet is a public resource - which often gets forgotten. If you wouldn't shout something out in public for everyone to hear (and judge), think twice before publishing that same content online
8. Do not converse with strangers unless you're very confident of their background and connection to you. The internet makes it easy for individuals to mispresent their identities and motives
9. You're right to be sceptical and guard your own integrity. Don't believe everything you read online. Pay attention to how people you do trust and interact with normally contact you. If something seems inconsistent suddenly, be on your guard. This could be a scam communication. People may also post misleading information, including about their own identities, to lull you into a false sense of normalcy and security
10. Consider using a separate email address for social media sites
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