Choosing a Business Bank Account – An Interview with Ken Tumin

When someone mentions the word “Banking,” the main ideas that comes to most of our minds are based around the recent turmoil so closely associated with banks like Lehman Brothers, Bear Stearns, and the numerous others that either failed or received plentiful media coverage for needing to take bailout money – What most likely doesn’t come to mind when banking is mentioned are monks, temples, grain, and cattle.

In banking’s infancy, deposits of grain and cattle were made at temples because of the safety that comes with a sacred, well-constructed, building that was “well-staffed” with monks. Since that time, banking has evolved dramatically to become its own institution separate from temples and religion (unless, of course, you are like a few people on Wall Street who consider capitalism to be a religious movement). Modern banks are able to accept deposits from many entities, like corporations and partnerships, which are not limited to people alone.

When a company is incorporated or a partnership is formed, the owners will quickly realize that they need to create a bank account that lets revenue flow in from sales made with credit and debit cards. Banks have been kind enough to create a product for these entities known as business checking, or a merchant account. There is a confusingly large amount of web resources in helping consumers choose accounts, and seemingly just as many banks offering some variation of a merchant account that claims to fit your needs.

Ken Tumin, the owner of, was kind enough to let us interview him and ask some of our questions in regard to picking the right account for our business needs. Ken started as a hobby to help people find the best deals at banks and credit unions – as well as a place to give advice in dealing with banks and his experiences in opening accounts:

What sort of services or information does provide for consumers as well as small businesses? tracks rates on all types of personal and business deposit accounts. We also track the health of banks and credit unions. In the blog I report on the best bank deals and on banking news relevant to depositors.

In your experience, what are some of the problems that small businesses face when looking for cost-effective merchant and checking accounts?

In the past banks were not allowed to pay interest on most business checking accounts. However, this changed in July, and now banks are free to pay interest. Not all banks have started offering interest on their business checking accounts, but a few have and the interest rates are competitive.

Are there any absolutely “must-have” features that a business bank account should have that small businesses should look for?

Small businesses should make sure their bank provides good online account security. In addition, they should make sure they are aware of their bank’s security policies for business accounts. Federal regulations don’t provide the same level of protection against fraud on business accounts as they do on personal accounts. Small businesses are more likely to be liable for losses caused by fraud.

Are there any other important factors, in addition to the above, that a small business owner should have in mind when finally choosing an account?

Business checking accounts tend to have more fees than personal accounts. Businesses should be aware of not only monthly fees but also transaction fees and cash deposit fees. Businesses should also look to credit unions. Many credit unions offer business accounts and they often have fewer fees than the large banks.

The financial products banks create are meant to entice you enough to deposit money with them so they can then turn around and loan most of it out, but these financial products, however simple, will usually always come with a fee. Whether you’re depositing grain, cattle, or looking for an account to accept the flow of credit and debit transactions, banks are a necessary part of the business process, and it is extremely important to tread prudently when finding the right merchant account and hosting bank for your business.

Posted on Wednesday, November 9th, 2011