Before you move your business accounts: the questions to ask a bank first

What matters most when you are comparing banks

Before you move business accounts, ask a bank four kinds of questions: who will actually serve you, how money moves in and out (payments, deposits, cutoff times), how the bank protects you from fraud, and whether it can lend to a company like yours as you grow. Fees and deposit insurance matter too, but they are easy to compare on paper. The answers that reveal the most are the ones about what happens when something goes wrong on a Tuesday afternoon.

At Frost Bank I look after deposit relationships and lending for small and mid-size businesses, so I sit on the other side of these conversations. The owners who end up happiest with a move are the ones who came in with specific questions drawn from their own frustrations, not a general sense that the grass might be greener.

Start with your own list of what is going wrong

Before you talk to any bank, write down the last five times your current bank cost you time or money. A wire that sat for a day. A deposit hold that delayed payroll. A fee nobody could explain. A loan request that disappeared into a queue. A fraud alert that came too late. That list is your interview script, and it keeps the conversation on what you need rather than on what the bank wants to sell.

Then write down what is coming in the next two years: a second location, more employees, a vehicle or equipment purchase, a possible acquisition, more customers paying by ACH. A bank that fits the company you are today but cannot support the company you will be in two years is a move you will have to make twice.

Bring a few documents to the first conversation as well: three recent bank statements, a recent analysis statement if you have one, and a rough picture of monthly volume, such as how many checks you write, how much cash you deposit and how many people you pay. With that in hand, a banker can propose specific accounts and services instead of a generic package, and you can compare two banks on the same facts.

Questions about who serves you

This is where most business banking relationships succeed or fail. You want to know whether there is a named person responsible for your account, whether that person can actually solve problems or only pass them along, and what happens when they are out. Ask to meet them before you sign anything.

Listen to how they describe the relationship. A good answer sounds like a person who expects to learn how your company gets paid, who your large vendors are and when your busy season runs, so that an unusual payment or a dip in balances makes sense to them before you have to explain it. A weak answer sounds like a list of channels: an app, a phone number and a branch locator. Both banks may have the same tools; only one of them will notice when something in your account looks wrong.

• Who is my day-to-day contact, and how do I reach them when it is urgent?
• Does the same person handle my deposit accounts and any lending?
• Who covers for that person when they are on vacation?
• What can I handle without coming to a branch?
• What support is available after hours, and is it a person or a menu?

Questions about how money moves

Payments are where business owners feel a bank every single day, and the details vary more than people expect. Cutoff times decide whether a wire sent at 3 p.m. arrives today or tomorrow. Deposit holds decide when customer checks become spendable. Approval workflows decide whether you can control who releases a payment. Ask the bank to walk you through each of these using your actual volume, not a generic brochure.

If you pay vendors by paper check or run payroll yourself, ask what it would take to move those to ACH, and what that would cost. My guide on signs your business needs treasury management covers the services worth asking about, such as remote deposit, ACH origination and positive pay.

• What are your cutoff times for same-day wires and ACH?
• How long are holds on deposited checks, and can they be adjusted for my account?
• Can I set up dual approval so one person enters a payment and another releases it?
• Does online banking export cleanly to the accounting software we use?
• Can I deposit checks by scanner or phone, and what are the limits?

Questions about fraud and security

Business accounts are targeted constantly, by altered checks, fake vendor invoices and emails impersonating someone you trust. A bank's tools and its response time when something looks wrong are worth as much as any rate. Ask which fraud prevention services are available, whether they cost extra, and how the bank contacts you when it sees something unusual. Then ask what happens, step by step, if you discover a fraudulent payment on a Friday evening.

Pay attention to whether the person you are talking to can explain positive pay and ACH debit blocks in plain language. If they cannot, the fraud tools may exist on paper but nobody local will help you set them up.

Questions about credit, even if you do not need it yet

Many owners choose a bank for deposits and only later discover it will not lend to their industry, their size or their type of collateral. Ask now. Find out what kinds of credit the bank offers to businesses like yours, who makes the credit decision, what documents they will want and roughly how long the process takes. You are not applying; you are checking that the door exists.

It also helps to understand how the bank views the relationship as a whole. Some banks expect your operating accounts if they extend a line of credit; others do not. Knowing that up front avoids surprises later. If you are weighing a line of credit against a term loan, my earlier guide on when a line of credit beats a loan explains the difference.

• Do you lend to businesses in my industry and at my revenue level?
• Do you offer lines of credit, equipment loans and SBA-backed loans?
• Who makes the credit decision, and how long does it usually take?
• Would you expect my operating accounts as part of a credit relationship?

Questions about fees and deposit protection

Ask for the full fee schedule, not just the monthly service charge, and ask the bank to price your last three months of activity on the account they recommend. Overages on paper items and cash processing are where a cheap-looking account becomes an expensive one. If the bank offers an analyzed account, ask what earnings credit applies to balances; I explain how that works in my guide to business bank fees and account analysis.

On deposit protection, confirm the bank is FDIC-insured. The FDIC insures deposits at insured banks to at least 250,000 dollars per depositor, per ownership category, and accounts owned by a corporation, partnership or unincorporated association form their own category. If your company routinely holds more than that, ask the bank what options it offers, and talk to your accountant about how much cash to keep where.

Finally, ask what the move itself will cost and who will help with it. New checks, a new deposit scanner, re-enrolling tax payments and updating payroll all take time. A bank that assigns someone to help you through the transition, and tells you plainly what it will charge for services during the overlap, is showing you how the rest of the relationship is likely to go.

Answers that should make you pause

Some answers tell you more than a page of marketing. Be cautious if nobody can tell you who your contact will be, if every problem routes to a general phone line, or if the bank pushes a product before asking how your business works. Be cautious, too, if you cannot get a clear answer on fees for your actual activity, or if fraud tools are described vaguely.

None of these are automatic deal-breakers. A large bank with excellent technology may be the right choice for a company that rarely needs a person. But you should choose that knowingly, not discover it six months after the move.

• No named contact, or a contact who changes every few months
• Pressure to open products before anyone asks about the business
• Vague answers about fees on your real volume
• No clear process for urgent payment or fraud problems
• Credit questions answered only with 'apply and see'

Making the decision and planning the move

Narrow it to two banks and ask each for a written summary of the accounts, services and fees they propose. Compare them against the list of frustrations you started with. The right bank is the one that fixes those, at a cost that makes sense, with a person you trust to pick up the phone. For most businesses I talk to in Dallas, the people matter more than a small difference in fees.

Once you decide, do not close the old accounts right away. Run both banks in parallel until payroll, vendor payments, customer deposits and tax payments have all moved. I lay out the order in my guide to switching business banks without missing payroll. And if you would like a second opinion on what a bank has proposed, I am glad to talk it through with any owner in the Dallas–Fort Worth area, whether or not the business ends up at my bank.

Questions people ask me