Monday 21 January 2013

The Business Bank Account....the Results are IN!

Step One

For my first activity, I thought I would explore something that has been bothering me for a while -  Bank fees. The first account – and the easiest for me to tackle - is my business bank account.  I have had a business bank account for many years for my sole-proprietorship, JB Consulting. It is with the TD Bank where I currently have my personal account. It made it easy to transfer money:  I would get my pay cheque, deposit it and then transfer it to personal account. I might make a maximum of 6 transactions per month, usually only two. I originally paid $10.95 per month. It has since gone up to $14.95 per month, or $179.40 per year

Just not right!

Fast forward to today and most of my work comes from Cent$ible Students for which we have a separate business account. (More on that another day!) However, I have to keep my JB Consulting account as I still invoice some work through my sole-proprietorship. But, some months I have to actually transfer money from my personal account just to pay the bank fees!

Not happy with this situation, I explored TD to see if they had any other options. The most affordable option was $9.95 for a Pay As You Go account. It would have saved me a little, but still expensive in my opinion as this was the base fee. 

The Search

I decided to research other banks. I explored the FCAC online banking tool but it only looks at personal saving and chequing accounts.

I discovered a great blog that had already done most of the work for me, but the particular article on business bank accounts was written in 2009 so it was probably needing some updating. (There were some other great articles here that I am sure I will check out again later!)

I finally researched the individual accounts myself. There is a lot of information to shift through and much to consider. Location is important to me, as I need it to be convenient for me to deposit my cheque. Cost is obviously important too.  


The Complicated Results….

As I mentioned in my “teaser” entry last Friday, I did close my TD Business account.  When I got out my Master Business Licence to open a new business account I discovered that my JB Consulting Master Business Licence had expired last May! I called and discovered that they give no notification about this (you have to renew every 5 years) and that to renew, I would just have to pay the required $60 and I would be back in business.

This gave me an idea. Since I don’t do much JB Consulting business anymore, I could bill using my own name, NOT pay the $60 to get a new business licence and use a personal account instead! Eureka! I called an accountant friend, Marot Merner  - and she agreed, based on my situation, that this would be a good solution! 

The Big Save

So my final conclusion is business banking is expensive. I could not find a truly reasonable account. I was leaning towards the RBC eAccount since I do most of my banking online, and the CIBC Basic Business Operating account was offering 3 months free on their $6.00 per month base account. But both had the potential to cost more than expected if some months required additional transactions.

HOWEVER, there are some great personal banking options including ING Direct Thrive Account and PC Financial. I already had a PC Financial chequing account that I had set up when I was saving for a vacation and had not used since.  I decided that this FREE account would work! It will be my new “business” account to keep my newly named “Jenni Bolton” business separate from my personal account. Problem solved! 

Total savings:  $60 (business licence) +  $179.40 (for the TD Business Account) = 
$ 239.40. 

 I worked hard for that!
Let's hope my next challenge is not as complicated!

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