A cash stockpile to smooth seasonal fluctuations is a must for many business owners, but with the RBNZ cutting the official cash rate four times this year (and six times since June 2015) finding a return on investment can be challenging. It also means that ongoing account-keeping fees can take a larger proportion of the savings pie.

Canstar compares business and personal deposit rates

What fees to expect on business deposit accounts

Keeping fees under control is one way of curbing costs without any great effort. Checking out the fees you pay for your business accounts may surprise you. According to the CANSTAR database, low-fee transaction accounts for both low and high numbers of monthly transactions are readily available in the market place. However, at the opposite end of the scale, the maximum fees charged are quite steep, as our table below shows.

A transaction account that is used for 30 transactions a month (low, in our assessment) could cost you almost double – $21.37 a month – compared to the average of $12.15. If you are a high transactor (say, 80 transactions a month), you could also feel the sting of $32.08, even though the average cost is $20.60. That’s money that would be better in your pocket over the financial year rather than a donation to your bank, unless there’s a very good reason for it. These fees are correct at time of writing.

Profile Minimum Cost $ Maximum Cost $ Average Cost $
Low Transactor 0.86 21.37 12.15
High Transactor 5.97 32.08 20.60

Source: canstar.co.nz. Based on products assessed for Business Savings & Transaction Account Star Ratings reports, August 2016.

Breaking that down further, the bulk of the monthly cost for High Transactors is made up of branch cash withdrawal fees  and to a lesser extent the cheque withdrawal fee.  The branch cash withdrawal fee can be as high as $3.00 and the branch cash deposit fee can be as high as $2.50.

For Low Transactors as well, the bulk of the cost is made up of the branch cash withdrawal fee and the cheque withdrawal fee. Again, those fees can be as high as $3.00 and $2.50 respectively.

Of course, business operators should keep in mind that there are a number of other potential fees that could apply, depending on the type of transactions they make. Overdraft fees, currency conversion fees and international ATM fees are a few of the “extra” costs that may sometimes apply.

What type of business operator are you?

CANSTAR recognizes the diversity of business operations and assesses product suitability using common business profiles. A good-value transaction account is an integral support for a business’s everyday banking needs.

Some traders use their transaction account sparingly, while others make a lot of bank transactions in the course of running their business. Whether business administrators do everything online or prefer to visit a branch, there are products out there tailored specifically for every business wish.

When it comes to transaction accounts, CANSTAR’s Star Ratings involve a sophisticated methodology that compares the price and features of transaction accounts specifically marketed to small business in New Zealand.

These accounts are evaluated in terms of price and features across two transaction profiles, those being:

LOW TRANSACTOR: Business customers who average around 30 transactions per month on their account. You can compare our Low Transactor ratings here.

HIGH TRANSACTOR: Business customers who average around 80 or more transactions per month on their account. You can compare our High Transactor ratings here.

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