Business Bank Account Overdraft Rates

Good business overdraft rates are important, but what's more important is picking the right account for your business needs. By opting for one strong feature (such as a good overdraft interest rate) you'll lose something else on the bank account (maybe a fantastic interest rate on credit balances). To get the best account for your business, you'll have to take a good look at what features you really need rather than jumping for the first account you see.

Even if business overdraft rates looks good in hindsight, remember to consider if:

  • The rate is an introduction rate only. Will it increase dramatically overtime?
  • Any additional charges are added to the use of the overdraft, or to the account. What kind of charges will you be paying if you go over the overdraft limit?
  • The overdraft is flexible, and at what cost.
  • You can use the service online, on the phone or in branch only. Is access to your bank account a priority for you, or are you fine with working your bank down the old-fashion branch route?
  • There are any business advisors at your bank. It's all good and well talking to a customer service advisor if you're a normal banking customer, but business account owners need a little extra expertise on their side.

Normally, you should only opt for excellent business overdraft rates if you are frequently in the red. You need to really assess your finances before deciding on an overdraft limit to make sure the overdraft is big enough for you.

The nature of your income and expenditure should also tell you something about the type of business overdraft rates you need; are your finances up and down throughout the month, even though they eventually even out? If so, you might need a large overdraft, possibly with a not-so-good rate, but with flexibility for your business. Remember, you should shop around for the ideal account as well as the ideal rate.

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