Find the right banking solution for your business by comparing the best business bank accounts.
Finding the right business bank account for everyday transactions is crucial to the success of your business. Not only do the best business bank accounts make it easy to access funds whenever you need, but they also allow you to make as many transactions as you need every month and charge minimal fees in the process.
However, the right account for you will depend on your business’ financial needs, so it’s important to compare a number of accounts to track down the best one.
How does a business bank account work?
A business bank account is designed to help you look after the financial requirements of your business. In general terms, there are two types of business bank accounts: transaction accounts and savings accounts. Transaction accounts are used to manage the everyday spending of your business - paying suppliers, paying staff, managing income and monitoring your spending.
Business savings accounts, meanwhile, offer a high rate of interest on the finances held in your account. This allows you to get your money to work harder for you and grow in value, although there may be restrictions on how and when you can access your money and how much you have to deposit into the account each month.
There’s also a third, unique account option available, which is often referred to as a cash management account. This combines the features of transaction and savings accounts, such as a higher than normal interest rate and full accessibility to your funds at all times.Back to top
How do I choose the best business bank account?
Consider the following features when weighing up the pros and cons of different business bank accounts.
- Account type. If you want an account to allow you to manage your day-to-day finances easily and without incurring many fees, a business transaction account is the way to go. If you want to earn interest on the amount in your account, consider a business savings account.
- No fees. Account fees can quickly add up and have a detrimental effect on your bottom line, so make sure you’re aware of all the charges that apply to your account. Is there an ongoing fee? Do any transaction fees apply?
- Unlimited transactions. Is there a limit on the number of transactions you can make a month? Do you need to meet minimum transaction or deposit limits in order to access a bonus interest rate?
- Competitive interest rate. If you’re looking to open a savings account, what is the rate of interest that will apply to your balance and how does it compare to the rate offered by other banks? Is there an introductory or bonus rate that you can also access?
- Accounting options. How easy does the account make it for you to keep track of your spending? Does it also offer reporting features that will be useful when it comes time to file your business’ tax return?
- Accessibility. Consider the options available for accessing the funds in your account, including your bank’s ATM network and their online banking options. In the modern world, it’s also important to consider the strength of a bank’s mobile banking offering.
- 24/7 customer support. If you ever have a question or need assistance with a transaction, how will you be able to access the support you need? Look for online help centres as well as phone and email support.
What are the pros and cons to using a business account?
- Separate your business and personal expenses. Whether you open a savings or transaction account, business bank accounts are specially designed to offer you better control of your business finances. They allow you to send and receive payments domestically and internationally and monitor your spending and ongoing balance levels.
- Accounting tools. Business accounts offer a range of reporting tools to help you keep track of your spending and make filing your tax return a much simpler process.
- Choice. Major banks across Australia offer an extensive range of business bank accounts, meaning there are plenty of options to choose from when it comes to managing your finances.
- Watch out for fees. Many business bank accounts come with ongoing fees and a host of transaction fees, so make sure you’re aware of all the charges that may apply.
What are things to avoid when using business bank accounts?
- Avoid as many fees as possible. Know all the fees that apply before you sign up for an account. Monthly fees, annual fees, transaction fees and a range of other hidden charges can all impact on your balance.
- Avoid international transactions. The volatility of exchange rates combined with hefty currency conversion fees could mean that if you make multiple overseas transactions, with suppliers for example, that you end up losing money. Opt for a multi-currency account instead where you can fix exchange rates and negotiate for lower fees.
Frequently asked questions
Do I need a business account if I’m a sole trader?
There is no legal obligation for sole traders to open business accounts to manage their business finances; however, you may wish to do so to keep business finances separate from personal funds.
How can I compare business banks accounts?
Use the comparison table above to compare the features and fees of a wide range of business bank accounts.
How do I find the best business bank account?
The best business bank account for you will be the one that matches all your financial needs. You’ll need to consider your own requirements in terms of account features, spending requirements and accessibility to decide which account offers everything you need.