Opening a business bank account is one of the first things you should do when starting a business.
Even if you’re running the smallest of businesses, it’s important to have a separate business bank account. This will help keep your business and personal expenses/income separate. Many small business and sole proprietorship companies shy away from opening a business bank account in order to avoid paying extra bank fees.
In addition to this,having a business bank account provides your new business with credibility and is also important for tax purposes. A sure way to attract attention from the Canada Revenue Agency (CRA) is to mix business and personal expenses and bank accounts.
Canadian banks have a proud history of reliability, with no bank failures during the Great Depression and remaining mostly untouched by the credit crunch in 2008.
If you’re not familiar with Canadian banking, you should note that almost all banking in Canada is done through Canada’s top five banks.
In this post, we will take a look at opening a business bank account with one of these top five banks; Scotiabank.
Here are the current types of Scotiabank business bank accounts available to businesses:
Basic Business Account
Scotiabank describe their Basic Business Bank Account as “a simple way to manage your funds.”
This account comes with a monthly fee of $9.95. This is waived if your account maintains a $6,000 minimum balance for the entire month. Users get 1 free transaction per month for every $1,100 in the account.
There are also transaction fees associated with this account, broken down as follows:
| Mail deposit – $5.00 | Branch deposit – $1.25 | ABM deposit – $1.25 |
| Cheque – $1.25 | Remote deposit – $1.00 | Credit purchases – $1.25 |
| Merchant debit – $1.00 | Other debit – $1.25 | ABM withdrawal – $1.25 |
| Bill payment (Internet/Telephone) – $1.25 | Self-service transfer (ABM, Internet or Telephone) – $1.00 | Night deposit – $1.25 * |
* Annual Night Deposit Fee: $30 per year plus tax, per location when using Preferred Vendor night deposit bags; $150 per year plus tax, per location when using any other bags.
Right Size Account For Business
Scotiabank’s website says you can “manage funds easily with this flexible, budget-friendly solution”. This account comes with a monthly fee of $6. There is also a cost per transaction charge:
| Transactions | Charge |
| 1-5 | $1.20 |
| 6-30 |
$1.05 |
| 31-60 |
$1.00 |
| 61-100 |
$0.95 |
| 101-150 |
$0.90 |
| 151+ |
$0.85 |
Additional deposit and sundry service fees will most likely apply.
ScotiaOne Account Plan For Business
Scotiabank says that this account allows you to “simplify your finances with one plan for your business and personal banking.”
Account features and fees:
| Business Transactions | Personal Transactions | Cost Per Month | |
| Option 1 | 60 | 50 | $49.95 |
| Option 2 | 100 | 100 | $79.95 |
| Option 3 | 150 | 100 | $119.95 |
You should refer to Scotiabank’s Guide to Fees and Interest Schedules for other transaction and service fees this account may qualify for.
How to Open an Account
Every business is different, and therefore has different banking needs compared to others. Choosing the right account type is important, but it can be confusing.
To work out the account type that suits you best, it is recommended that you pay a visit to your bank to discuss your needs with a professional. However, Scotiabank does have some online resources that can help point you in the right direction, based on your business structure:
You can also fill out this application form to get your application started online.
Sending Payments with Scotiabank
Once your business is up and running, you’ll have to start paying suppliers, freelancers, affiliates, etc. Banks use an old technology to send payments called wire transfer. Payments can take up to 5 days to be processed – especially for overseas payments. This can cause all sorts of problems, such as delayed shipments and poor relationships with suppliers.
Wire transfers can also be rather expensive. The cost of making wire transfers through Scotiabank can be a little confusing. They charge a percentage cut of 0.15% from your total payout but have a minimum charge of $25 and a maximum of $100.
For example, say you are sending:
- $1000 → it should be $11.50 in service fees but is increased to $25 because of the minimum limit.
- $25,000 → is a $37.50 service fee; it does change because it’s between $25 and $100.
- $150,000 → should be a $225 service fee but is lowered to $100 because of the maximum limit.
It’s also worth noting that when sending money overseas, Scotiabank will charge a considerably high markup on your transaction while converting currencies. This currency conversion fee, in addition to the wire transfer fee, can end up burning a significant hole in your balance. Especially if you make these types of payments frequently!
Receiving Payments from Customers
As a business, you also need to setup how to receive payments from customers. Some of the options you have are:
- Accept payments online via credit card and/or Interac or bank debit cards
- Receive cheques from your customers and deposit it into your bank
- Provide your customer bank account information to send EFT or Wire Transfer
- Receive payments into your PayPal or equivalent wallet account
- Accept payment at a retail location using a terminal like Interac or Stripe
- Use a Global Business Account to receive local ACH / SEPA / Direct Deposit payments without paying any bank charges, such as the REMITR Collect Account.
Each payment receiving method has its own pros and cons with respect to bank charges, wait times (cheques take awfully long to get cashed), or opaque currency conversion charges at your bank.
Choose wisely and opt for services that are online, transparent, and offer the best combination of low fees and competitive currency exchange rates.
REMITR
To avoid unfair transaction fees and poor exchange rates offered by Scotiabank business bank accounts, you should consider using a Money Service Business (MSB).
Here at REMITR, we offer the best service available to Canadian businesses and individuals to both send and receive payments internationally. Creating a REMITR account is absolutely free, and there are no monthly charges!
Sending Money: With REMITR, you can send money to over 150 other countries for just $5 per transfer. That’s it! Your days of stressing over bank wire transfer fees are over. We also offer a guarantee that your transfer will be processed in just 1 business day.
Receiving Money: When you sign up for REMITR Collect, you receive a free REMITR Global Account. This account allows you to receive payments in US Dollars and Euro for free. Yes, for free! Users have the ability to withdraw funds from their REMITR account to their local bank account in CAD at any time they wish.
Here at REMITR, we don’t charge any markup when converting currency. We use the best live exchange rate to ensure you don’t lose any money. All REMITR services are available 24/7, meaning you never have to worry about making that dreaded trip to the bank.
Our platform is a 100% secure, FINTRAC-registered service that employs state of the art technology to protect your payments and financial information.
Time is money, save them both by getting in touch with REMITR today.
