Business Bank Accounts

Compare the best business bank accounts options and find the right one for you.

Last updated on April 26th, 2022 at 11:51 am by Thomas Perrotta

Business Bank Accounts

Wondering where to start when it comes to choosing the right bank account for your business? The number of options to pick from can seem overwhelming, but there’ll always be something that suits your needs on the bank account market. You can find out how they work, as well as how to prioritise certain aspects of the best business and small business bank accounts in the comparison process, in this comprehensive guide.

What are business bank accounts and how do they work?

A business bank account is a bank or transaction account designed to cater to your need to access funds earned and spent by your business. This type of account handles the day-to-day workings of a business, providing access to funds for regular purchases and expenses like staff wages and rent. In the same way as a personal bank account, a business bank account is designed to be utilised frequently to help your business and its finances run smoothly. In Australia, the best business bank accounts are recommended for companies, partnerships and trusts, rather than combining personal and business finances and potentially complicating tax obligations.

One of the key areas that distinguishes business bank accounts from other accounts is that they’re specifically designed to cater to the needs of a business. This primarily comes in the form of different requirements when it comes to transactions. Business transactions are different to those spent by an everyday individual, with a far greater weekly or monthly spend and income than most. As such, business bank accounts will often carry greater allowances in this area than standard bank accounts such as increased transaction limits.

How much does a business bank account cost in Australia?

The unfortunate reality of business bank accounts is that it’s likely to come with a variety of fees and other charges. You may have to pay a number of different fees in order to keep your account running. Check out the table below to see some of the charges you might be facing, and some you can avoid, for taking out one of the best business bank accounts in Australia.

Type of fee Why you’re paying it

Why you’re paying it

This simply covers the cost of maintaining your account on a monthly basis, but this fee can be waived in some situations for business bank accounts. These can cost up to $20 in some cases.

ATM withdrawal fees

If you’re in a position where you or employees are frequently withdrawing cash, your financial institution could charge you for using a different ATM. While it may seem insignificant at $2.50 or less, this will add up over time. This fee also isn’t charged by some accounts.

Transaction fees

Different transactions will be treated in different ways by each account provider, but some transaction types could incur a fee. For example, if you complete a transaction over the phone or with the assistance of a branch staff member, you could be charged an extra few dollars. You may also find that your business bank account will incur transaction fees relating to the volume of your monthly spend, particularly if you’re using their online banking platforms.

Account balance fees

Some institutions will come with requirements regarding a certain minimum balance that can be held in your account at any given time. This can also apply if there are conditions surrounding a minimum amount that has to be deposited into your account each month.

Overdrawn fees

If you overdraw from your bank account, you’re likely to pay a fee for each day your negative balance remains. Some accounts will waive this fee, but others may charge you upwards of $10-$15 per day until it’s brought back into the black.

International transfer fees

If you’re transferring money internationally, you’re almost certain to be charged a fee for doing so. While these likely won’t be able to be avoided, you can stem the damage by finding an account with lower charges in this area. Depending on the service, this can cost anywhere between a few dollars up to $50.

It’s important to note that not all financial institutions will charge all, or any, of these fees on your business bank account. You should always check with different financial institutions if you’re shopping around for an account with minimal fees charged and compare this element of each potential bank account.

What is an overdraft facility & can I add one to my business bank account?

An overdraft facility is a flexible commercial loan option that provides access to additional funds for your business, which are usually utilised for covering operating expenses when there is a shortage in a business’ working capital. The credit limit for overdrafts can vary quite widely depending on the type of account and your financing needs, but in most cases, you’ll be able to apply for up to $50,000.

Unlike other loans, though, overdrafts don’t follow a set repayment schedule. Interest will be charged each month that money remains outstanding, which will be taken off your bank credit total. This gives business owners flexibility in not adhering to a strict repayment cycle for their borrowed funds and pay them back at their leisure, usually when their business experiences an uptick in overall revenue. Because overdrafts are approved by your financial institution, you’ll be able to avoid any dishonour fees typically associated with overdrawing.

Overdraft facilities can be added and linked to your main transaction account. After being approved for an overdraft by their financial institution, business owners are able to link these funds with their primary bank account and make use of them for other everyday purchases. This means that business owners are then able to spend the funds granted through an overdraft with their company debit card, ensuring that payment for their goods and services can be achieved more freely.

Top tips for comparing business bank accounts

Account fees

As mentioned above, ensuring that you pay as little as possible in account fees can make a big difference to the amount of money you spend to maintain your account

Accessibility

As a business owner, you’ll want as much access to your business’ bank account as possible, which can include ATM, branch or online accessibility

Transaction limits

Always assess the potential limitations surrounding the size and frequency of transactions before committing to your bank account, particularly if your business deals in larger transactions

Deposit requirements

Depending on your business’ cash flow, it may be difficult to meet the requirements of some accounts in relation to a mandatory minimum total deposit each month

Debit cards

Most accounts will grant you a debit card for ready made access to your account, but you might require more than one for the nature of your business

Credit cards

Many business bank accounts these days will additionally offer a linked credit card as part of the deal, which can be used to accrue frequent flyer points and earn other rewards

Frequently asked questions about business bank accounts

Should I combine my personal bank account with my business bank account?

No – mixing personal and business finances can create a multitude of issues when it comes to distinguishing which funds belong to which party and can make declaring incomes for tax purposes more difficult. Separating the two simplifies this process overall, while also establishing a greater sense of professionalism in providing clients or customers with business details rather than personal ones.

Can I use my personal bank account for business if I’m a sole trader?

You can – you may find that it’s less complicated to run one bank account than two, particularly if the turnover from your business isn’t too high. However, it’s probably better to split these accounts to save any confusion caused by your personal income and expenses.

How do I apply for a business bank account online?

Applying to open a business bank account online is very straightforward. After you’ve compared the best business and small business bank accounts, which you can do with Savvy, the next step is your application. You’ll need identification documentation, as well as documents like your ABN and tax file number. Once all of these have passed your financial institution’s checks, you’ll be free to use your business bank account.

Can I open a business bank account with no fees?

Yes – these are quite simply known as fee-free business bank accounts. While these may not cover all the fees listed earlier, they’ll usually waive the most common ones like monthly account fees and ATM withdrawal fees. Make sure you read over the fine print thoroughly to see how free of fees your account actually is.

Can I open a business bank account with an interest rate?

Probably not – business bank accounts usually don’t have interest rates associated to boost your account total. This is because they’re more for everyday usage, with a potentially wildly fluctuating account total. If you’re specifically looking for an account to accrue interest on your total, you’d be better off looking to open a business savings account.

How are business savings accounts different to business bank accounts?

Business savings accounts are designed to be tools to grow your business’ savings over time through interest, which isn’t the case for business bank accounts. These are more utilised for regular, everyday expenses and won’t be able to give you any meaningful interest return.

Will I be able to move to a different business bank account after I’ve opened one?

Yes – this can happen often if you stumble across an account with better fees or conditions that suit your needs more. You’ll most likely have to open your new business bank account and then transfer your funds from your previous ones over before ultimately closing it. It’s wise to always keep your eye out for the best account offers on the market, as they can both save you money and make your business dealings that much easier.

What is Business Banking Online?

Business Banking Online is a service offered by financial institutions to ensure your business banking experience is made simpler and more effective. This can increase security by adding further layers and mechanisms to prevent breaches and grant access to other employees to whichever areas you see fit (there may be some accounts that only you can view, while others which relevant workers can also access). One of the primary benefits of this service is to ensure that their banking is made more efficient, namely through the use of allowing bulk files to be uploaded that take much of the hassle out of paying expenses like employee wages or for regular expenses.

Can I link my business bank account to my Business Banking Online account?

Yes – business owners can curate their online portal with all of their various accounts, which can in some cases equal well over 100, which simplifies the overall running of your business’ finances and day to day expenses.