How to switch business bank accounts

Is switching business bank accounts worth it?

Switching is now easier than ever using the current account switching service, so if you’re a small to medium sized business and would like a change, there’s nothing stopping you and business growth is one key reason why you should consider changing your business bank accounts.

The benefits of switching your business account include:

• Using a business account provider that suits your business needs
• Getting a new introductory rate
• Better customer service
• Getting exclusive perks or benefits
• Better banking products, mobile apps and credit cards

There are several benefits to switching your business bank account, not least that you will be able to get a new introductory period that should allow you to avoid monthly fees for a little while longer. This will come in particularly handy for small businesses, sole traders and startups who need to keep costs low.

In addition, you will also be able to take advantage of any perks or benefits attached to being a customer of a new business account provider, or even find a bank that is more suited to your needs. It’s worth doing your research to see whether a new bank might be a better fit, especially if your priorities have changed based on the changing needs of your business.

For example, you might require a bank with a better app if you need to have access to your account on the fly, or you might simply need access to better financial products through a high street bank with a wider range of products.

Requirements for switching business banks?

If you’re thinking about changing banks, you might be wondering, “Is it hard to transfer my business bank account to a new provider?” Fortunately, the answer is, it’s pretty easy. The process you used to set up your old account essentially repeats, with a couple minor additions. 

It can be boiled down to:

• Opening a new business bank account
• Setting up the new account to take over any automated deposits or payments you had set up with your old account
• Closing your old account after verifying that the new account is working properly

Basically, any business or LLC that was able to set up your old account, you should have no trouble setting up a new business checking account or savings account.  

7 steps for switching business bank accounts

1 – Research your options

If you’re looking to switch banks, chances are you’re looking for something your old bank can’t provide. Consider the top services and features you’re looking for, like an online platform, expense categorization and multiple accounts, then research which banks will meet those needs.

When comparing different financial institutions, you should consider the features they offer and the fees and rates associated with the bank. A good bank should outline all costs, if any, ahead of time to ensure you don’t get blindsided with charges. 

Additionally, verifying that your new bank is an FDIC member is also a good idea to protect your money. In the event of a bank failure, this insures deposits up to $250,000.

2 – Apply for a business bank account

You’ve picked a business bank that works for you such as Bluevine or Kabbage. Now it’s time to apply for a new business account. Each bank offers a different application process, so it’s hard to say how exactly to do so. But with online banking platforms, you’ll be able to apply online at any time. 

The process should be fairly quick but will depend on the bank you choose. Online application process typically takes less than 10 minutes and accounts can be opened within 24 hours. 

3 – Identify all incoming and outgoing payments

Your existing business account probably has some automated transactions set up. These may include automated deposits, employee payroll direct deposits and vendor bill payments.

You also may have your account linked to other accounts. Some of your automated transactions may involve these other accounts. For instance, you may have automatic transfers set up.

Make a list of any automated transactions and account links you have in place with your existing account. You’ll need to migrate these to your new account after you set it up.

You’ll also want to review any accounting procedures associated with your current account and its automated transactions and linked accounts. These also will need to be updated. Talk with your accounting professional about any changes which need to occur here.

4 – Set up your new account’s online and mobile profiles

To start managing your new account efficiently, you’ll need to set up your online and mobile profiles. You may need to complete steps such as enrolling in services, downloading apps, setting up passwords and verifying accounts.

‍5 – Get the money out of your old account via certified check

‍Ask your current bank if they can provide a certified check with your current total amount of funds so that you can deposit this into your new business account. 

Give yourself enough time because certified checks take about three days to clear. Instead of dipping into that contingency fund, be sure to have some cash on hand on the off chance you will need it.  

6 – Update your accounting procedures

Now you can use the list of automated transactions you compiled earlier to update any deposits and payments so they now connect with your new account. As with previous steps, this may involve waiting for verification in some instances.

You’ll also want to update any automated accounting procedures you use. This may involve changing some settings in your accounting app such as Freshbooks, Wave Accounting or other apps.

7 – Close your old account

Once you’ve verified that your new account is working correctly, you can close your old account if you so desire. In some cases, you may decide to leave your old account open so you can continue using it for specific, limited purposes. In this case, make sure you update your accounting procedures so that they reflect this.

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