How much do business bank accounts cost: a global approach

In order to operate internationally and scale to new countries, businesses grapple with the challenge of accessing new currencies to receive and send payments. In most cases, this can be accomplished by opening a bank account in the country where the operations will be conducted. In spite of this, opening a bank account, even domestically, can be extremely expensive (with multiple fees, some of them hidden), as well as time-consuming, requiring extensive paperwork and compliance. When extrapolated to multiple countries, businesses face an extraordinary amount of work to trade in new currencies and operate in new regions. Additionally, they must manage multiple, very disjointed financial systems. In this article, we will examine how much do business bank accounts cost and the associated fees of opening and maintaining multiple foreign bank accounts, as well as potential ways to solve this problem.

Firstly, every business bank account you open will incur costs. Initially, you may be asked for the following:

Set-up fee: Administrative costs set by the financial institution.

Initial deposit: To get the business bank account fully operational, some institutions may require an initial transfer or deposit.

Required minimum balance: If the balance is too low for too long, you may be blocked from accessing the business account until the required minimum is restored. Keeping track of required minimums across multiple institutions and accounts is incredibly tedious, especially without a single source of truth to see all your cash at once. To ensure business operations are uninterrupted, you must continuously monitor all accounts to ensure the balance doesn't get too low.

In addition to these initial costs, there are other fees banks may fail to disclose at the start:

Monthly Maintenance Fee: Depending on the institution, this can range from single to double digits. While these fees can be waived by opening multiple accounts within the same institution, it also puts a strain on liquidity.

Overdraft Fee: If your business account balance falls below zero without an agreed overdraft, you may be charged an overdraft fee. Keeping track of this across multiple accounts is a significant task, and if neglected, it can impact your bottom line.

Insufficient Fund Fee: In addition to the overdraft fee, you may also be charged an insufficient fund fee, penalising you for overdrawing from your account and for not having enough money in your account.

The process of monitoring all business bank accounts to ensure balances are accurate and overdrafts are avoided is time-consuming. Having one account impacted by fees can be detrimental to your business; if this issue is multiplied across multiple business accounts however, your revenue can be severely hurt, and you may need time to recover. Additionally, your business will need additional resources to manage multiple accounts and open new ones in each country in which it plans to operate. This takes valuable time away from more important tasks in business finances, and you may eventually need to hire additional resources, which inevitably leads to higher costs.

The purpose of opening a business bank account for your business is to be able to receive, hold, and send money. If you open bank accounts in new countries, it is to facilitate cross-border operations. Unfortunately, cross-border transfers remain expensive, particularly if business transactions are done through wire transfers rather than local routes. When making international payments, you may encounter additional costs associated with intermediaries and foreign exchange, particularly for higher-value transactions.

In the early stages of setting up operations in a new country, some businesses may opt for virtual cards in a given currency in order to at least pay suppliers without opening a bank account immediately. The problem with this solution is that you cannot receive funds, exchange them, make cash deposits or pay by bank transfer.

To operate fully, you will eventually need to establish a relationship with financial institutions in the desired countries.

You are better off opting for a unified multi-banking solution like Fyorin, which allows you to work seamlessly with multiple banks while leveraging a curated network of financial institutions worldwide. You get access to multiple currencies in different countries, as if you are banking with one, while enjoying a tailored banking experience.

Our multi-banking solution offers you:

One onboarding, multiple banking capabilities - Through our network of global financial institutions, Fyorin lets you multi-bank as easily as if you were banking with just one institution. With one onboarding process you can get access to multiple financial institutions in over 200 countries, 100+ currencies and multiple local payment rails (SWIFT, SEPA, ACH, Faster payments and others) to streamline cross-border transactions.

Reduced fees, improved efficiency and visibility - By streamlining your banking relationships and accessing all accounts from one platform, you can enjoy improved efficiency and complete visibility without needing to log into different systems and consolidate fragmented data. Improve your bottom line by reducing bank fees and bank layering when transacting globally.

Streamlined compliance for global business banking - Our global network of financial institutions helps you scale internationally and establish financial operations in new markets faster - saving even 90 days on compliance processes when scaling internationally. Our global footprint allows us to take out the heavy lifting from global business banking and connect you with the right partners, so you can grow without borders.

Interested in consolidating your banking relationships? Get in touch with us by booking a free demo or emailing us at [email protected]

Does it cost to have a business bank account?

Yes, business bank accounts carry associated costs with them. The fees will depend on the institution.

Do business bank accounts have fees?

The most common ones you can expect when opening a new business bank account are - set up fee, initial deposit and a monthly account fee. There are also overdraft fees and minimum balances you may need to be aware of.

What is the typical cost of a business account?

The cost of a business account can vary widely. Some banks offer free banking on everyday transactions for an initial period, while others may charge a monthly fee depending on the account features you choose.

What do I need to do to open a business bank account?

To open a business bank account, you typically need to provide your business details, proof of identity, and proof of address. You may also need to demonstrate eligibility criteria, such as annual turnover or registration with Companies House, depending on your bank and location.

What are business savings accounts, and how do they differ from a business current account?

Business savings accounts are designed to help businesses save money while earning interest on their balance. In contrast, a business current account is used for day-to-day transactions and managing cash flow.

What is the current account switch service and how does it work?

The current account switch service makes it easier for businesses to switch their business bank account to a new bank. The service ensures that all regular payments and direct debits are transferred to your new account seamlessly.

Are there any banks that offer free banking for business accounts?

Yes, several banks offer free banking on everyday transactions for new business accounts, but this may be subject to certain account terms.

Can I get a business overdraft with my business bank account?

Yes, many banks offer a business overdraft facility as part of their business banking services. This allows businesses to withdraw more money than is in their account, providing a financial cushion.

Are there specific eligibility criteria to open a business account?

Yes, eligibility criteria can vary by bank, but generally, you need to be a UK resident, have a registered business, and meet any specific requirements set by the bank you wish to open a business account with.