Business Checking Accounts

Business Checking Accounts: Best Rates Online

You may have got a letter from your bank announcing the introduction of monthly fees on your business checking account. Talk of checking account fees started doing the rounds a year ago, after it was clear that new banking rules put a cap on how much interest rate and fees banks could charge.

New provisions effected on the Credit Card Accountability Responsibility and Disclosure (CARD) Act in February 2010 and the Durbin Amendment, limit the amount of debit card and overdraft fees banks can charge. It also prohibits banks from charging customers for one-time debit card transactions, except where the customer opts in for overdraft services.

This led to loss of revenue as these fees previously formed a large percentage of income for banks. In survey results released September 2011, the estimated revenue loss in banks over the past one year and as projected to 2013 stand at $29 billion. In addition, the tough economic times, which have prevailed for over two years now and recently got worse, also contribute to diminishing revenue.

It is against this background that banks introduced checking account fees, as a way of raising revenue. Banking experts say the trend is not likely to end soon, with more banks expected to introduce fees later in the year. Some banks now charge between $5 and $25 per month for checking accounts.

Others, like Wells Fargo, have introduced an additional $6.95 online bill pay fee a month. So a new customer at the bank will incur a total of $11.95 a month. The bank has announced that the changes will take effect starting November in some states. Still others, like Chase, are testing new fee systems. They are currently monitoring debit card usage fees and customers’ reaction, probably to gauge how the move will affect their client base and business in general.

Most small and regional banks still offer free checking accounts, and it is clear that the issue of charging fees is largely with the bigger banks. However, even these may be forced to introduce fees on checking accounts, as they are governed by the same banking laws. As of 2011, 55% of all non-interest checking accounts across different banks attract monthly charges. The number was lower in 2010, at only 35%.

Nevertheless, you can continue using your checking account for free if you adhere to certain conditions laid out by your bank. These differ from one bank to the other, but operate on the same principles. One is that you must maintain a certain minimum amount on your account. This again depends on your account level and can be as low as $500 or as high as $20,000.

A lot of banks will waive the monthly fee if you meet a minimum number of deposits per month and/or use your debit card more. Others will require a monthly direct deposit, which is easy to do if you are employed. Simply link your checking account to your pay and your employer will deposit the money to your account automatically.

A lot of self-employed people have raised concern about the direct deposit condition, which does not seem to favor them. You can solve this by using a payroll program, if you do not have one already. Customize the program to automatically send your salary or allowance to the account at a certain date every month.

Banks are more lenient to customers with multiple accounts. If you link your account to a credit card from the bank, you could also benefit from lower or fully waived fees. At the end of the day, you will need to weigh your options to decide whether the deal you are getting from your bank is good or not.

You may have to change your banking tendencies to avoid paying checking account fees. How often do you use your debit card? Does your bank waive fees for online banking? If you haven’t taken advantage of that, start banking online. Or change your checking account level – move to a free one.

Also connected to checking accounts are ATM withdrawals. Revise your bank’s rates to see how much they charge you for out-of-network ATM usage. Bankrate.com’s 2011 annual checking account report released September shows that ATM fees for out-of-network withdrawals and bounced checks have increased by 3%.