Small business bank accounts
The best business bank accounts to help you manage your cashflow, pay expenses and take payments.
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We assess multiple product features for transaction accounts from over 100 providers and assign each product a score out of 10.
Key takeaways
- If you operate as a company, partnership or trust, you're legally required to have a separate business bank account. Sole traders aren't required to, but a dedicated account makes tax and bookkeeping much simpler.
- Keep an eye on monthly account fees and fees for transactions made in branch or overseas.
- Some business bank accounts come with access to online accounting software and tools.
What is a business bank account?
A business bank account is a transaction account that is specifically designed for businesses rather than for personal use. You can use your business bank account to pay for day-to-day business expenses, pay invoices and staff wages and also to receive payments from clients and customers.
How to compare and find the best business bank account
Here are a few key things to consider when picking a business bank account:
The monthly account fee
Some business bank accounts charge monthly fees, in exchange for more features and services than what's offered on a personal account. If you don't need larger transaction limits, staff-assisted cash deposits or specialised features, look for a business bank account with no monthly fee.
The branch network
Some banks don't have any physical branches in Australia. If you need to make staff-assisted transactions in a bank branch, make sure the bank account you choose has branches in convenient locations for your workplace or home.
The online portal
Does the account come with access to an online portal to help with your business reporting and tax obligations? Also, looking for an account that's already integrated with accounting software like Xero can help you manage your business admin.
Debit cards
Is there a limit to how many debit cards you can request, or is there a fee for each additional card? Look into this if you want to have multiple debit cards for multiple employees.
Staff-assisted transactions
If you regularly receive cash payments you should look for a business bank account that doesn't charge you to deposit cash. It's worth comparing the cost per transaction, with an account that charges a flat monthly fee for unlimited staff-assisted transactions to see which option would save you money.
The overdraft facility
This is a feature that's not widely offered with personal bank accounts, but it can be offered with business accounts. If your business needs an overdraft facility, look for an account that offers this.
International fees
If you travel a lot for work and plan to use the debit card to withdraw cash or make purchases overseas, look for a business bank account with low or no international ATM and foreign transaction fees.
Choosing my business bank account
"I was always on the lookout for a business account that had no account keeping fee - it didn’t seem reasonable to me that I can have a personal transaction account and pay nothing for it, but because the account was marked for business use, I had to pay $10 per month.
I can understand a fee if the business transacted hundreds of payments each week, but all of our payments flowed through a third party app, so there was only one deposit and a few dozen payments a month. So, I shopped around and settled on a bank that offered business transaction accounts for free."
Who needs a business bank account?
If you’re registered as a company, partnership or trust in Australia, you must open a separate business bank account. While sole traders aren't legally required to open a separate account and can use a personal bank account, having a dedicated business account makes bookkeeping and tax time far simpler.
Small business bank accounts also help to keep your business income separate from your personal finances.
Benefits of a business bank account
Business bank accounts offer a range of benefits, but some of the best include:
- Designed for businesses. Business transaction accounts are designed with businesses in mind, rather than everyday consumers. They include features that are beneficial to businesses, such as an overdraft facility.
- Keep your business money separate. Having a dedicated business bank account ensures you keep your business finances completely separate from your personal finances.
- Often integrated with business services. These accounts often include added support for businesses, such as seamless integration with accounting software to reduce the admin burden.
- Specialised online platform. Often banks will offer a dedicated online portal for business bank customers that’s tailored to their needs. For example NAB Connect is NAB’s online business banking tool that allows customers to manage remuneration payments and offers customised transaction reports.
- Larger transfer limits. Business bank accounts often allow for larger daily transfer and transaction limits than personal bank accounts to accommodate large invoice payments and staff wages, etc.
- Easier at tax time. With all your business expenses organised separately from your personal finances, it’s easier to manage your tax obligations at the end of the financial year. Your business expenses will be clearly identifiable in their own account.
- Manage your cash flow. With all your business expenses, payments and earnings in the one account, it’s easier to analyse your day-to-day business cash flow.
- Multiple people can use the account. You can opt for a joint business account if you’d like another person such as a business partner or co-owner to have access to the same account.
How to apply for a business bank account
- Apply online. Once you've chosen an account, complete the online application on the bank's website (or you can also go in branch if the bank has branches).
- Add your details. Fill in your name, age, address, contact details and residency status. You'll also need to provide details of your business, such as the business name, address, TFN and ABN.
- Verify your identity. Once the bank has verified your identity with your driver's licence, passport or other forms of ID, your account will be opened instantly.
- Fund your account. Transfer some money into your new bank account from another account or deposit cash into the account via a bank branch, ATM or Post Office. You'll soon receive your debit card in the mail.
Frequently asked questions
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I intend to start and then progressively grow a property (dwelling) renovation business. The first one or two over an 18 month period will be as a sole trader situ and then most likely a trust for future more frequent/higher value projects. The longer term plan is to progressively buy renovate and then turnover quickly to minimise holding costs.
What is the best banking product for my business. The purchase will be based on a 20% deposit (own funds) with balance borrowed from a bank.
Hello Malcolm,
thanks for the question.
Unfortunately we’re not able to provide personal advice regarding which product is better for you. I recommend comparing the various accounts in the market in relation to what you’re looking for, and then calling the providers of the accounts you’re interested in to find out more.
I hope this helps,
Marc.