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A business savings account is an account that allows you to earn interest on your business funds while you're not using them. It's like a regular high interest savings account, except it's for business use rather than personal use. A business savings account will sometimes often have a minimum balance requirement that needs to be met in order to earn interest, and this balance requirement is usually higher than those on personal savings accounts.
By linking the business savings account to a business bank account, you can easily transfer money back and forth when you need to. It can be a good idea, if possible, to link our business savings account to a business bank account with the same bank so you can see both accounts side-by-side in your mobile banking app or Internet banking portal.
Like regular savings accounts, business savings accounts offer variable interest rates meaning they can change at any time. They're not fixed like they are with a term deposit or fixed-rate home loan. A lot of business savings accounts offer tiered interest rates, meaning the higher your balance the more interest you can earn. There might also be other conditions to meet to earn more interest, such as meeting the minimum balance requirement or making regular deposits.
A business savings account is not for personal use. You can only open a business savings account if you're operating as a sole trader, partnership or trust in Australia. This is to ensure that all businesses are keeping their business finances separate from their personal finances. If you're a sole trader you're not legally required to use a dedicated business account, however you might find it easier to do so.
You will need to prove you're a business by providing your Australian Business Number (ABN) and/ or Australian Company Number (ACN), plus supply your registered business address when opening the account.
Business savings accounts are specially designed with a range of features to help your business better manage its finances. These accounts can;
It's not just about rates and fees. You also need to find an account that offers the level of customer service and functionality that suits your business. "With a traditional bank, the term deposit set up process was very, very difficult. We had to provide board minutes for them to approve it for us… The Zeller Savings Account was so much more straightforward." – Ben Stammer, co-founder of Sydney-based charity ReLove and Zeller customer
A business savings account could be a smart choice if you have extra money at the end of each month that you don't need to pay invoices or other expenses. Consider the pros and cons below:
The best business savings account for you will be one that meets the financial needs and goals of your business. Therefore, the best business savings account for your business might be different for another business. For example, will you need to be able to access your funds regularly or will you be happy to lock them away for a large period of time without making a withdrawal? Do you need a business savings account that can be linked to your existing transaction account with another bank, or are you happy to link it to the transaction account with the same financial institution?
The answers to these questions will help you determine which is the best business savings account for you. Once you know what features are important you can start shopping around and comparing business savings accounts. Consider the tips below when comparing accounts.
When comparing business savings accounts, make sure to consider the following:
Ready to open a business savings account? Follow these steps to open an account today.
Just as an individual needs to pay tax on any interest they earn from a personal savings account, your business will need to pay income tax on interest it earns in a business savings account. Make sure to keep track of any interest you earn each year and declare it to the ATO.
An Australian Business Number (ABN) is issued by the Australian Taxation Office (ATO) to all businesses, from sole traders right through to large corporations. It is an 11-digit number and must be displayed on any invoices the business issues. An Australian Company Number (ACN) is issued by the Australian Securities and Investments Commission (ASIC) to every new company in Australia. This nine-digit number ensures that companies can be identified when transacting business. The ACN identifies your business while the ABN allows your business to carry out transactions.
Yes, you can. The money in a business bank account is not credit or a loan, it's your money. You can only access money that you put into the account.
No, these accounts are designed specifically for businesses.
Yes, some business savings accounts are structured to allow access to a certain number of employees. Understand however that you are still responsible for the account.
Yes, deposits in a business savings account of up to $250,000 are secured by the Australian Government in the same way that a personal savings account is.
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Hi,
May I use a business saver account to pay monthly bills so money in every week and withdraw end of month? I am with St George bank now.
Thanks!
Hi Sam,
Thank you for getting in touch with Finder.
Please note that a business savings account is an account that allows you to earn interest on your business funds while you’re not using them. I suggest that you contact your chosen bank on how you may use your business account on paying monthly bills and other transaction. Basically, when you apply for a business account, you may speak with a business relation manager to discuss your options or apply online.
Please make sure that you’ve read the relevant T&Cs or PDS of the business account to help consider whether the product is right for you.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
Can I transfer funds electronically between Citi Bank and Commonwealth bank accounts
Hi James,
Thanks for getting in touch!
Yes, you can do an electronic transfer from your Citibank Savings to a Commonwealth Bank account. Note that for transfers to other Australian bank accounts – the payee would expect to receive the funds within 2 working days. Also, there are no fees charged for processing a domestic transfer.
Hope this helps! For any further questions, feel free to reach out to us again, we’re here to help.
Best,
Nikki
I have a business which I deposit cheques and cash into a transaction account at a branch. What would I do if I transferred my accounts to an online branch?
Hi Bron,
Thanks for getting in touch with finder. I hope all is well with you. :)
Check with your bank if they have an online banking system that you can use. From there, you can also determine the exact steps to transfer your account to an online account.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
Why is there a difference in interest rates between a business saver account and a personal saver account? Is there any reason why a business cannot use a personal saving account and earn the extra interest?
Hi Barb,
Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?
A business saver account and a personal saver account’ interest rates are different because a business saver account means it is an account regulated by Australia since it earns income hence it will be subject to certain tax rates that will not be relevant to your personal savings.
Hope this clarifies,
Cheers,
Nikki