Experience report: Opening the RBC Small Business eAccount
Posted: - Modified: | business, entrepreneurship, experimentHaving a business bank account is good for separating business and personal expenses. Reconciling your books is easier when you don’t have commingled expenses, and clean separation is important for minimizing legal liability.
After considering several options for business bank accounts, I narrowed it down to a choice between Royal Bank of Canada’s Small Business eAccount and Bank of Montreal’s Small Business Banking Plan. RBC’s Small Business eAccount was launched mid-January 2012, I heard, which could explain the lack of reviews on the Internet.
Here’s the side-by-side comparison as I understand it:
| RBC Small Business eAccount | BMO Small Business Banking Plan | |
|---|---|---|
| Monthly fee | $0 | $9.50, free with a minimum balance of $4,000; new businesses (< 9 months of operation) pay no plan fee for the first three months |
| Included transactions | Unlimited electronic transactions | 15 monthly transactions, unlimited transfers |
| Cheque deposits | $3.50 + $0.20/item | $1/transaction over limit; Cheque plan: 20 items included, Cash plan: 10 items included; $0.20 per additional item; |
| Cash deposits | $3.50 + $2-5 per $1,000 if cash | $1/transaction over limit; Cheque plan: $1,000 notes deposit included, cash plan: $4,000 notes deposit included; $2.25/$1000 for notes deposited over plan limits, $2.25/$100 for coins deposited over plan limit |
| Withdrawals | $1.50 + cost of cheque if needed | $1/transaction over limit + cost of cheque |
I do practically of my banking online, and I expect the business will be similar. Because RBC had no monthly fees to start with, free electronic transactions, and another person I know recommended RBC’s online interface, I decided to open an account and see what it was like.
I called the bank and set up an appointment on the same day. It took us one hour to set up profiles and bank accounts because I had never banked at RBC before. I brought my Articles of Incorporation and two pieces of government identification. A senior account manager asked me questions about what I planned to do in business, photocopied my documentation, and walked me through the forms. We set up a chequing account and a savings account (no monthly fee, two debits, free transfers in, $0-$9,999 0.100% interest). He advised me to ask an accountant about the best way to move money into the business: whether it should be structured as a loan, and so on.
When we reviewed the paperwork, I noticed that one of the forms mentioned the banking resolution in Form A. We flipped through the client agreement that the account manager had given me, and we realized he’d given me the consumer banking agreement instead of the business one. Score one for reading closely! Unfortunately, he didn’t know of an electronic copy of the form, so I may have to retype the banking resolution.
The account manager was filling in for the person who normally does business accounts, so he apologized for not being able to set up a credit card for the business as well. I’ll need to follow up on the phone or in person some other time.
I’ll see how I end up using the account. I may open up a BMO account to give that a try, too.
Apparently, banks charge for deposit slips, but other people have used accounting software or printed out their own templates. Your mileage may vary. You can order cheques from places aside from your bank, which can help keep costs down. If I ever find myself using either, I’ll share my experiences!