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. In addition, consider applying to our Assisted Living Investing Mastermind program. This 12-month program is designed to guide you step-by-step toward owning and operating your own assisted living facility. With the added benefit of personalized coaching support, the program ensures you have the resources and guidance needed to succeed in this rewarding industry.
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