Small Business Bank Accounts

An in-depth look at small business bank accounts available in Australia and how to find the best one for your business with Savvy.

Last updated on April 26th, 2022 at 01:35 pm by Cate Cook

Compare and find the best small business bank account with Savvy

Bank accounts for small businesses range from simple basic transaction accounts up to more complex accounts offering a range of online and linked banking features.  The best account for your small business will depend on its size, what type of industry you’re in and what your overall banking requirements are.  Read on to find out more about the features available for business bank accounts and how comparing products with Savvy can save you from having bank fees eat into your profits.

How do I work out what’s the best bank account for my small business?

There are many different types of bank accounts on offer. Your bank account should offer you maximum convenience, ease of use and the lowest possible fees.  Before opening your new bank account, think about how your business will use the account; consider some of the following questions about what your banking needs are:

  1. What sort of bank account functions are you looking for?

Are you looking for an everyday account to handle multiple business transactions or do you need a savings account to earn interest?  This fundamental question will determine if you should compare savings accounts or transaction accounts

  1. Does your business deal with cash?

Do your customers pay you in cash?  If so, the best business account for you will probably be with a bank which has a branch nearby which can accept your cash deposits and charges the lowest possible fees for counting and receiving that money

  1. Do you need to connect?

Do you have other bank accounts, credit cards or an accounting system which you wish to link into and use with your business account?  If so, you’ll need to make sure your new business account is compatible with your existing systems

  1. Does your business involve international payments?

Do you need to pay, or receive payments from, people or companies overseas?  If so, international transaction fees should be one area you concentrate on when comparing, as they tend to attract higher banking fees in Australia

  1. Is your business growing rapidly? If so, look at scalability

You need to think about your business plans and ambitions and choose a banking system which can scale up as your business grows.  You may just have a handful or no employees now, but will your banking system be able to handle your business affairs if you have multiple employees and need a dedicated payroll system?

What fees are usually charged by banks?

Naturally, the fees charged by banks vary widely, with the Big Four banks charging some of the highest fees in Australia.  Online banks typically charge lower fees but don’t have the convenience of high street branches to deposit money or cheques into.  There are also now many business accounts which come with no monthly account fees.

Some of the fees to watch out for include:

  • An account-keeping monthly fee – usually around $10 a month at one of the larger banks in Australia
  • Bank teller assisted transactions – a charge levied if you visit a branch and ask a teller for assistance, such as to deposit your cash or cheques. This fee is often around $2.50 per assisted transaction
  • Express Business Deposits (EBD) and Express Cheque Deposits (ECD) fees – often between $0.20 and $0.80 per transaction
  • ATM fees – some banks charge per transaction if you use another bank’s ATMs, which are typically between $2 and $2.50.
  • Cheque processing fee – for cheques you write to others, often charged at $0.50 to $0.80 per cheque
  • Multiple funds transfers – often $0.20 or more per transfer via internet banking
  • Overseas transaction fees – charged when you pay or receive money from overseas accounts. Some overseas transaction fees can be hefty – for example, one big bank charges $6 per transfer when you make an online International Money Transfer (IMT) to an overseas company. 
  • Security token provision and replacement – if you use a banking token, some banks charge to provide you with the token, card, USB or key fob, whilst others charge a deposit fee or a replacement fee for using this additional level of security

Are there any ways to reduce the banking fees I pay?

Yes – however, this will require careful planning and comparisons. Savvy can assist you in comparing fees so you can choose an account which offers the lowest cost for the services you require.

Banking fees are often charged per transaction of various types.  Think about the type of transactions you intend to carry out and consider if you can find a way to reduce them.  Compare business bank accounts in the areas where you’ll be carrying out most transactions and find an account which offers either the lowest fees or no fees for your most frequent transactions.  For example, some banks offer 20 over-the-counter transactions per month fee-free, so this could cover daily banking if you do need to secure your cash takings each day. Examples of other ways to reduce fees include:

  • if you’re charged per transaction to deposit cash and you usually bank every day, can you invest in a safe and only bank once or twice a week instead?
  • if you’re charged a fee per payment transaction, can you arrange to pay your suppliers less frequently, such as fortnightly instead of weekly or every 30 days instead of every 15 days?
  • if you do plenty of international banking, look at the option of opening a global or international bank account, which has lower or no fees for these transactions, in addition to your standard Australian business account
  • look at special offers which may give you fee-free banking as an introductory offer. For example, some banks offer a no-fee account for the first 12 months to encourage people to swap banks

if your business bank account has minimum deposit requirements to remain fee-free, set up automatic payments and transfers to ensure you meet the minimum requirements so you can enjoy no-fee banking

More small business account questions answered

What business documents will I need to open a business bank account?

To open a business bank account with a bank you haven’t dealt with before you’ll need:

  • 100 points of ID for yourself personally (such as a passport and driver’s licence) and any other company directors or signatories to the account
  • company TFN and/or ABN or ACN
  • if the company is a partnership, verification of this arrangement (such as your partnership agreement)
If I’m a sole trader, is it better to just use my personal account?

Using your personal bank account for business transactions isn’t illegal, but it can make it very messy for you and your accountant to complete your tax returns and assess your company’s true financial position.  In addition, if you’re in business with other people, using your personal bank account for business transactions risks being accused of trying to hide transactions or not being totally honest about your financial dealings.

Are overdraft facilities worth paying the fees for?

This will depend entirely on your cashflow situation and whether you risk running out of money in your business account.  Having a payment dishonoured or denied can be costly in terms of time and business reputation and can send the wrong message to your customers.  If you think you may be at risk of getting low on funds during the payment cycle, an overdraft facility may well be worth paying for to add flexibility to your business’ finances.

Can most business bank accounts send account data straight to my accounting software?

Yes – Xero, Quickbooks and many other accounting software packages can receive direct-feed banking information from many of the major banks.  However, not all banks and accounting systems are compatible, so it’s well worth getting advice from your business account manager or accountant before deciding which system you adopt.  If your accountant uses one accounting system as standard and you adopt another, there may be compatibility difficulties, or at worst you may either have to change your accountant or your accounting package.

Do all business bank accounts offer all payments types?

No – some of the big banks do offer a wide selection of payment options such as Apple Pay and Samsung Pay, but not all banks offer all payment types.  However, almost all banks offer either Osko or PayID instant payments. Some of the major banks have partnered with Australia Post to allow businesses and customers to make deposits and payments at post offices, but there are banks which don’t work with Australia Post.  Check to make sure the bank you choose offers your preferred payment options and is compatible with the credit and debit cards you prefer to use.

Is it worth opening multiple business bank accounts for different uses?

It can be worth having different business accounts for different purposes.  For example, you may need one transaction account for most of your dealings within Australia and a second through which you conduct all your international transactions.  You may wish to earn interest on a portion of your savings, thus needing a high interest account where your funds are readily available, but invest another portion in a term deposit to earn even more interest.  In other instances, you may choose a bank with a nearby branch which offers fee-free cash deposits but choose an online account which has advanced features for most of your online transactions.