Hidden Bank Fees Every Assisted Living Investor Must Know
Jan 02, 2025
Running an assisted living business means juggling many responsibilities—and managing your finances is at the top of the list. Choosing the right bank can make or break your bottom line. Hidden fees and surprise charges can quickly eat into your profits, leaving you with less money to reinvest in your facility or improve care for your residents.
In this guide, we’ll uncover common bank fees, how they can impact your assisted living business, and strategies to avoid them. By the end, you’ll feel confident in choosing the right banking partner to help your business thrive.
Check out the video, too:
Why Choosing the Right Bank Matters
Your bank isn’t just where you deposit checks; it’s a partner in managing your assisted living facility’s finances. A good bank can simplify resident payments, streamline vendor transactions, and support your growth goals.
But here’s the catch: not all banks are created equal. Some charge hidden fees or have restrictive policies that make managing your money more expensive than it should be.
By carefully selecting the right bank, you can:
- Reduce unnecessary expenses.
- Improve cash flow management.
- Focus more on providing top-notch care to your residents.
Common Fees to Watch For
Here are some of the most common fees you might encounter—and how they can affect your business.
1. Monthly Service Fees
Many banks charge monthly service fees, typically ranging from $10 to $20, unless you meet certain conditions like maintaining a minimum balance. That’s $120 to $240 per year—money you could use elsewhere!
Tip: Look for banks that waive fees based on activity, such as maintaining a set balance or making a certain number of transactions each month.
2. Excess Transaction Fees
Some banks limit how many transactions you can make each month without incurring additional fees. Exceeding these limits can cost you $0.40 to $0.50 per transaction.
How It Impacts You: If your facility frequently handles payments or transfers for vendors, these charges can add up fast.
Solution: Choose an account with higher transaction limits or no limits at all.
3. Cash Deposit Fees
Handling large amounts of cash? Some banks charge fees for cash deposits exceeding a certain threshold, typically around $5,000 per month.
Why It Matters: While most assisted living payments come through checks or ACH transfers, occasional cash payments from residents or families could trigger this fee.
Tip: Discuss cash handling needs with your bank to avoid unexpected costs.
4. Non-Sufficient Funds (NSF) Fees
These fees, often $35 or more, are charged when your account doesn’t have enough money to cover a transaction.
Avoidance Strategy: Keep a buffer in your account and monitor balances regularly to prevent overdrafts.
5. ATM Fees
Using out-of-network ATMs can cost $2.50 to $5 per transaction.
Impact: While rare in assisted living businesses, ATM fees can add up if you frequently withdraw cash for petty expenses.
Workaround: Stick to digital payments or find a bank with fee-free ATM access.
6. Wire Transfer Fees
Wire transfers, often used for large transactions like property purchases or emergency repairs, typically cost $15 to $25 per transfer.
Tip: If your facility relies on frequent transfers, negotiate lower fees with your bank or explore alternative payment methods.
Tips for Avoiding Bank Fees
1. Research Banking Options
Not all banks are the same. Compare offerings from local banks, credit unions, and larger institutions. Many local banks and credit unions cater to small businesses, offering:
- Lower fees.
- Better customer service.
- Tailored financial products.
2. Negotiate Terms
You don’t always have to accept a bank’s standard terms. If a fee structure doesn’t suit your needs, ask if it can be adjusted. Banks want your business, and many are willing to make concessions.
3. Monitor Your Accounts
Regularly review your bank statements to spot unnecessary charges. Catching and disputing errors early can save you money over time.
4. Leverage Digital Tools
Banks with strong online platforms allow you to automate payments, track spending, and reduce in-person transactions. This can minimize costs and simplify your financial management.
Why Local Banks or Credit Unions Might Be Ideal
For assisted living businesses, local banks or credit unions often provide the best value. Here’s why:
- Lower Fees: They typically have fewer or smaller fees compared to national banks.
- Personalized Service: You’ll build relationships with bankers who understand your business needs.
- Community Focus: Supporting local institutions can benefit your community and help your business stand out.
That said, larger banks may offer perks like nationwide access. The best choice depends on your business priorities.
Start Saving Today
Choosing the right bank is one of the most important financial decisions you’ll make for your assisted living business. By understanding and avoiding hidden fees, you can protect your profits and redirect those funds toward improving your facility and resident care.
Take time to research your options, negotiate terms, and keep a close eye on your account activity. With the right banking partner, you’ll build a strong financial foundation that supports your business’s success for years.
Remember to download our free Business Plan Checklist to help you create a successful business plan for your facility.
Need help figuring out where to start? Join the next Roadmap Challenge and build your launch plan with me.
Show full transcript 👇
Transcript
00:00:00
finding the right bank is an important part of running a small business you want to make sure that you find a bank that meets your needs but you also want to be aware of some of the fees you might encounter with your bank knowing what these fees are and how to avoid them could save you hundreds of dollars every year hi everybody i'm brandon gustafson i own and operate two assisted living facilities and i created this channel to help people just like you learn the ins and outs of investing in assisted living
00:00:29
welcome to assisted living investing [Music] hey everybody welcome back to the channel in our last video we talked about should you set up direct deposits for your residents and their families or payees should you do that so go ahead and watch that video and let me know what you think down below in the comments today we're going to get into small business bank fees that you should be aware of as you're working to try to figure out which bank which banking institution you should you want to work with
00:01:09
you want to make sure that you're aware of some of those fees that that might come up some traditional ones and some hidden fees so we're going to get into that in today's video so what are some of the fees that you might encounter what are some of the fees that you should be aware of you want to keep an eye out for as you're looking at setting up your your business bank account number one would be a monthly service fee so some banks are going to charge you a service fee if you don't maintain
00:01:35
a certain balance in your account which in a small business shouldn't be a big deal um especially in assisted living i would think that you'd have enough to hit that bare minimum but it's still something you don't want to to risk um because those fees are typically going to be like 10 to 20 bucks a month just to maintain that that account which is quite a bit i mean if you think about it a hundred twenty to two hundred forty dollars a year that's a lot of money you'd be putting in um for just a
00:02:04
service fee so you want to avoid that it's easy done easily enough with the bank account with the business bank account but i would just suggest that you avoid it if you can access transactions this one to me is just silly um but i get especially if you're if you're a business where you're doing a lot of transactions um in assisted living we we don't do a ton of transactions so it's not something you probably wouldn't worry about um but a lot of banks will have a transaction
00:02:33
if you have too many transactions in a month they'll start paying you for they'll start charging you a fee 40 to 50 cents per transaction above that transaction limit which can add up to a lot um if if you fall into that category so you know you're going to typically get a lot of free transactions and assisted living we're not doing a ton of transactions you're probably going to be fine but you want to make sure that you're aware of that especially if you're another type
00:03:02
of business that might be watching this channel to learn a little bit about small business banking fees if you're a transaction based business you want to make sure that you're aware that those fees might come up and i you can avoid them by working with a bank that doesn't have those types of transaction fees um cash deposit fees so some banks they don't really like to deal with cash and so if you're doing too much cash they are going to start charging you fees for it um so you know we're kind of
00:03:34
transfer transitioning things over to digital banking uh just in case you haven't noticed that um which is is fine there's pros and cons to it but because of that that's why banks just don't necessarily like to have cash on hand they typically don't have a ton of cash in the bank anymore so they will put a limit on the amount of cash that you can go on and deposit and if you deposit too much cash you might get charged a fee so make sure that you find out about this because especially in assisted living
00:04:04
you're going to be dealing with large amounts of of money typically your residents and their payees are going to be paying you with a check which is different from cash but you know you might have one that is a big stickler and they want to pay you only in cash and you need to decide if that's something you want to do or not i mean you could simply just not allow cash payments but if you had somebody that was just like we're going to leave if we don't do it and they're a really
00:04:30
good resident you might consider keeping them for that but then you want to have that conversation with your bank you know i'm going to be getting 3 000 a month from this one resident and it's going to be in cash is that going to be a problem is there anything we can do if there are fees associated with it to avoid those fees so just something you want to be aware of you could get a non-sufficient funds fee so if you don't have enough money in the bank account then you get charged a fee
00:04:55
and those can be as much as 35 per transaction so you just want to make sure that you carry a balance um in in your account you don't want to get to the point where um you're having stuff charged that account when there's no money in it and then you're having to cough up even more money um so just kind of be aware of that and that that's really helpful especially if you've transitioned to banking institutions or something like that and uh we talked about ach last in a couple videos ago
00:05:22
if you had set it up for an ach payment with a certain bank account and now you switch it over to a different bank account and you didn't transition it over with that vendor that's where those types of things could fall into place so just make sure you're kind of following up on that making sure that you're aware of the the types of accounts that you have set up so that you don't get charged any non-sufficient funds fees another one would be atm fees now in assisted living we're not going to the
00:05:49
atms all that often but it's something else that you just want to make sure that you're aware of if you did get to the point where you had to get cash out for some reason and you had to go to an atm to do that then you could get atm fees and those can be you know two dollars and fifty cents to five dollars per transaction depending on the bank and the atm and and how it works um so it's very easy to avoid um if you have the right bank um or uh if you're just dealing with cards and
00:06:22
ach transactions but uh just something that you also want to be aware of and i talked about this in a previous video about wire transfer fees so with a wire transfer fee if you've ever done a wire out of your business it's there's going to typically be like a 15 to 25 dollar service fee to to do the wire just depends on the banking institution depends on how quickly you need to get the funds there there are a few variables there but if you are ever going to need to do a wire for some
00:06:51
reason you just want to make sure that you're aware that that's going to happen i would say you're probably not going to have too many wire transfers in your business but you never know and so just another fee that you want to consider you may also have like ach fees um so just keep an eye out for those um as you're having those conversations with your bank i'd hate for you to get to the point where yep i wanna i love ach it's going to work great you get it set up and you find out that
00:07:19
you can only do bill pay with five different vendors and after that it's a five dollar service fee to do any other ach thing so make sure you're just having a conversation there i talked about ach in a previous video i'll link that up above so you can go and watch that and learn a little bit more about what ach payments are and how they work the next thing is hidden fees so in addition to those fees that i just listed off that are pretty common you're going to find a bunch of hidden fees um
00:07:45
that that might just kind of pop up as you're going around uh and just kind of working through things so these are things you want to make sure you're having a conversation with the bank and be like hey what what are all the fees that you have i want to see what all of those fees are the hidden and the typical fees and i need to know kind of what these are know what i'm getting into um because i hate to see you do your underwriting and then you're like okay i'm going to set up
00:08:11
bill pay and then you get bill pay and and now you're having to do an extra five bucks for every single transaction or something like that and um over the course of the year you're losing five hundred dollars like that would just it would be horrible um so just make sure you do your homework and have a conversation with your bank to figure out exactly what those hidden fees might be so that you don't run into them because every bank is going to have them just do your homework on what they are
00:08:34
and try to mitigate the amount of fees that you're going to see so some hidden fees that you might see are like an online bill pay fee so we pay our bills online and so getting a charge for that would just it would kill us it would be horrible so because we do almost all of our stuff online a mobile deposit fee especially in a business like assisted living where a lot of your residents are going to be paying you with a check and if you don't have a bank nearby a bank branch or something
00:09:05
like that or you just want the convenience of doing a mobile deposit um it would be horrible to get a mobile deposit fee so make sure you look into that external bank transfer fee if you're like we talked about in a previous video you've got your operational business your real estate business and you're transferring the funds over there for the lease payment um if you're getting charged a fee for that that's not cool um so or if you're paying yourself and you've got to pay a fee to pay yourself like
00:09:32
those are things that's just like i don't wanna do that so try to avoid those um saving withdrawal fees like if you had a savings account that you wanted to put the money into and uh then you needed access to it um again but it's gonna charge you a fee you wanna make sure that you're aware of of that type of a thing card replacement fees if you lost a card or it was stolen or something like that you had to get a new card are you going to get charged a fee for that those are some of those types of
00:09:59
things there are so many hidden fees just do your research on what your bank has google or do an internet search for hidden hidden bank fees and things like that you'll find there are hundreds of them out there make sure you're just kind of aware of what they are ones that might be concerning to you do your research on them find out if your bank is going to have them and if it's going to be too much then choose a different banking institution if it still has those fees just because a bank
00:10:31
has a fee doesn't mean that you can't work with them you just want to make sure that you're mitigating the amount of fee the amount of money that you are paying to fees that could be done for free by somebody else is the best advice i could give you in in this situation so can you avoid bank fees yes in a previous video i talked about who you should bank with and i'll reference that up above here and you know i i give a lot of really good information in that video about how you go through the
00:11:00
process of finding the right bank for you and for your business but you're going to be able to find banks that don't have fees or have very low fees and infrequent fees so a big part of that video was how to find that right banking institution that meets all of your needs and does it while avoiding fees i would highly suggest that you look for a local bank or credit union that has really good customer service and less fees or lower fees and start working with them that's going to be
00:11:30
your best option that's what i would suggest that you do so do your best to avoid the big banks they have some convenience to them but they also are going to have a lot more fees and if you want to save yourself some money find something local that you can work with in our next video we're going to be getting to getting into should you get a business credit card so i'll link that up above but should you go and get a business credit card i don't know let's find out in our next
00:11:59
video to learn more about investing in assisted living please visit me on assistedlivinginvesting.net i have free resources over there content you can set up a coaching call with me i'd love to have a conversation with you and then follow me on my other social media platforms and just remember it doesn't take a lot just a little bit keep making progress step by step by step if you do that i promise you you will be successful thanks for watching [Music] you
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