Here’s how to open a business bank account in Australia for smooth business management.
Having an account dedicated to your business transactions is not only a legal requirement, but also ensures you keep your business finances separate from your own personal finances.
Learn about the benefits of a business bank account in this guide, how to compare business accounts and the steps involved to set one up today. The good news is you can apply online in less than 10 minutes.
Compare business bank accounts
What is a business bank account?
A business bank account is a type of 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.
Who needs a business bank account?
If you’re registered as a partnership, company or trust in Australia then you need to open a business bank account, and cannot use a personal account. This is to ensure you meet your business tax obligations.
If you’re a sole trader or you’re doing some freelance or contract work on the side of your regular full-time job, you don’t need a business bank account. You might find that in this case, a regular personal bank account works just fine. However, you can choose to open a business bank account if you want to keep your personal finances and your business income separate.
Finder’s featured business bank accounts
|Name||Monthly account fee||ATM withdrawal fee||Minimum deposit|
|NAB Business Everyday Account ($0 monthly fee option)||$0||$0||$0|
|Commonwealth Bank Business Account||$10||$0||$0|
|ANZ Business Extra Account||$22||$0||$0|
Business bank accounts versus personal bank accounts
Many transaction accounts that banks and other financial institutions offer are for personal use only. This means that you cannot open one of these accounts if you’re a business. Instead, you’ll need to open a dedicated business transaction account.
While most personal bank accounts have no monthly account keeping fees, business bank accounts often do come with a monthly fee because they offer more services and features than personal transaction accounts. For example, they might offer a larger overdraft facility and bigger daily spending limits than personal accounts, along with added reporting and accounting features.
Business bank accounts have many benefits
Business bank accounts offer a range of benefits, including:
- 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 compare business bank accounts
When looking for the best business bank account, it’s important to look for one that meets your individual business needs. Here are a few key considerations:
- The monthly account fee. Many business bank accounts have 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 reporting features, look for a business bank account with no monthly fee.
- International ATM fees. If you travel a lot for work and plan to use the debit card to withdraw cash overseas, look for a business bank account with low or no international ATM fees.
- Foreign exchange fees. If your business regularly sends money internationally, check what the foreign exchange fees are to process international payments, plus make sure the exchange rates offered are competitive.
- The overdraft facility. Does your business need an overdraft facility attached to the account?
- Staff-assisted transactions. If you regularly receive cash payments from customers you should look for a business bank account that doesn’t charge you to deposit cash in-branch.
- The branch network. Some banks don’t have any physical branches in Australia. If you often need to make staff-assisted transactions in a bank branch, make sure the bank account you choose has a variety of 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 will help you manage your business admin.
- Check how many people can access the account. If you have a business partner or colleague who will access the account, make sure the account you choose can act as a joint business account.
Follow these steps to open a business bank account
Ready to open a business account? Follow these steps to open an account today.
- Compare accounts. Use our table above to compare business bank accounts, and click “Go to Site” when you’ve made your decision.
- Complete the application. You can complete the application form online. You’ll need to supply your personal details as well as your business ABN, ACN and tax file number. Your business must be registered in Australia, with a registered address.
- Verify your identity. You’ll need to verify your identity using your driver’s licence, passport or Medicare details. For a joint account, each person listed on the account needs to verify their identity.
- Account opened. When the bank has successfully verified your business and completed the application process, your new business bank account will be open and ready for use. You’ll receive your debit card (or cards if you opened a joint account) in the mail within three to five business days.