“A journey of a thousand miles starts with a single step”, as the philosopher Lao Tzu said. But that first step is also one of the hardest to make, because we have to overcome our inertia. Perhaps this explains why over 90 per cent of SME bosses get business loans from the bank where they hold their current accounts, and don’t look around for better deals.

As such, it’s no surprise that firms are paying on average over £2,500 a year in fees and charges, according to the Federation of Small Businesses. What’s more, the best business deposit accounts can pay more interest than the worst offenders so there are real incentives for businesses to switch accounts. So how do you approach finding the best products for your needs? Here are ten essential tips.

(1) Shop around

Many stick with the bank that they’ve used or choose an account that has a good top line or bonus. Opening a business account with your personal banking provider doesn’t entitle you to the best deals, so shop around before you commit. Not sure where to start? Use comparison sites and follow reviews to find the best deals for you.

(2) Don’t be swayed by a bonus

Bonuses often mean the rate will only last for a certain amount of time before it falls, and usually by a considerable amount. That being said, using an account with a bonus isn’t necessarily a bad thing. Depending on the get-out clauses on the account, you may be able to take advantage of the bonus rate then switch.

(3) Don’t be swayed by the headline rate

As above, the headline rate doesn’t always tell the full story. Some banks add transaction charges for certain things like transfers or withdrawals which can make a good headline rate worse in the long run. If you’re not sure, use online calculators to see how your typical transaction levels such as monthly direct debits, standing orders and cheques may impact your costs.

(4) Set a savings goal

Small businesses often have the goal of just “staying afloat” – especially in their early days – but that doesn’t mean that you can’t have a goal in mind. It could be that your business is saving to employ more staff, or enough to pay the bills on a rainy day. Whatever the reason, having a goal can help keep you motivated and scrupulous with your savings.

(5) Savings vs current accounts

Knowing the difference between a savings and current account is one way to ensure that your money is in the best account possible. In some cases, current accounts or business bank accounts offer little in the way of interest but make up for it with perks like insurance, overdrafts and easy access money. Savings accounts and business savings are normally higher interest as they are often fixed over a period of time, but think about how often you’re going to need access to your money before you tie it away for a long time.

Continue reading to make the most of Owen’s banking advice.

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(6) Get your gadgets covered

With current accounts and business bank accounts, banks often make up for the low interest rates by offering perks or bolt-on offers such as content insurance instead. You may wish to shop around for the best rates coupled with the best deal for you and your business. This can help you save on separate insurances later on.

(7) Online vs branch accounts

Online banks do not have the same overheads and staffing requirements of high-street banks, and these savings may be passed on to you. An online bank may not seem as accessible and there are some people who prefer to put a face to their bank, but if you run an SME that wishes to save money and be detached from the bank, an online provider may be ideal.

Related article: Here’s what banks could learn from the mighty Amazon

(8) Fixed rate or variable?

Some fixed rates can pay better interest for both personal and business savers but this may mean tying up your cash for a longer period of time – anywhere from one to five years – so think about how you’re going to access your money and how long you’re prepared to tie it up for before choosing an account.

(9) Switch, switch, switch

If you’re not happy with the rate that you’re getting, or if your bonus is about to run its course, you should consider switching your account. Switching may not be as difficult as it seems; in most cases it could be as easy as signing up to a new account and letting the bank switch your direct debits for you. This means you can take advantage of better rates and cut transaction costs.

(10) Cut the costs you pay

Make sure that you know what fees you’re going to be liable for when you open the account. That way you can avoid paying charges on certain transactions that you may not need. For example, by making sure you’re payed by BACS and using automated online transactions, you could cut the costs of traditional paying in methods such as cheques. Cheques can cause havoc if declined as you may have to pay an admin fee on top of other charges, so try to avoid these and focus on online transactions. The right business banking comparison site can help you compare transaction charges between accounts to find the product that best suits your needs.

Richard Owen is chief marketing officer at Your Business Money.

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