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How much do business bank accounts cost: a global approach
Global Banking
Financial operations
Multi-Banking
By
Karolina Jarosinska
|July 18, 2024
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.
Business bank account fees
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.
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.
International Payments Fees
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.
Is It Possible to Operate Cross-Border Without a Business Bank Account?
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.
To operate fully, you will eventually need to establish a relationship with financial institutions in the desired countries.
A Unified Multi-Banking Solution
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:
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, 220+ 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.
Frequently Asked Questions
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.Fyorin, your global financial partner
Interested in transforming your treasury management function? Get in touch with us at [email protected]
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