Our Pick Of The Best Business Bank Accounts For Australians (2024)

A business bank account can include transactional and high interest savings accounts that are specifically designed to help you manage business-related income and expenses. Separate bank accounts for your business funds is not only a legal requirement for many businesses, it helps you run a tight ship.

“All businesses should have separate accounts—this will allow them to put money aside for important things such as tax, rainy days and employee obligations,” according to chartered accountant and partner at Carbon Group, Michelle Maynard.

“Only having one account runs the risk of not saving for those future liabilities—meaning (you may) get into trouble.”

Am I Legally Required to Open a Separate Business Account?

According to the Australian Tax Office, if your business is structured as a company, trust or partnership, you must have a separate bank account. You’re also required to keep banking records for five years, which is why online banking that simplifies record-keeping is a popular choice for Australian businesses.

For company owners and directors especially, a business bank account is critical for staying compliant. Companies are separate legal entities—meaning you can’t use money earned by the company for personal purposes. So, you can pay yourself a wage, but you can’t withdraw money at will to pay for your groceries.

Do Sole Traders Need a Business Bank Account?

Sole traders—which includes those who are self-employed, freelancers and independent contractors—can technically get away with using a personal bank account. But Maynard recommends that sole operators also create a clear distinction between business and personal funds.

“Have a dedicated business bank account where your customers pay you, and you pay your suppliers. This will make it easier to track,” Maynard adds.

“If you want to take funds from the business, transfer them to your personal everyday account.”

She said sole traders should also have at least one separate savings account to hold money to cover future tax bills.

There are two main types of business bank account offered by lenders:

• Everyday transaction accounts for day-to-day banking such as accepting payments and making payments. These may be designed for internet banking only, or also support in-person banking and lots of cash deposits. They generally have low to non-existent interest rates on your savings.
• High interest savings accounts designed to help business owners grow their funds by earning interest. Just like in personal banking, there may be conditions attached to earning a higher rate of interest—such as minimum deposit amounts per month and linked products. Also, beware the lure of very high rates that are merely introductory and revert to a much lower interest rate after six or nine months.

Michelle Maynard says businesses are wise to open both an everyday transaction account and a savings account. You might even prioritise a bank that enables you to create multiple business savings accounts so you can separate savings by their purpose: e.g., BAS/GST/PAYG withholding, and income tax.

Here’s how Maynard suggests you leverage your multiple business accounts:

• Have customers pay you via your everyday transaction account, and also pay your suppliers from that account.
• Each week or pay run, transfer the equivalent GST from your weekly invoices/sales, plus the PAYG withholding and superannuation for employees, into your savings account.
• Each week, roughly calculate an income tax percentage (say, 20% of invoices/sales) and transfer amount to a savings account.

“By doing these things regularly, you will ensure you are building the right buffers so you don’t get unexpected bills when lodgements are due,” she says.

“If there is sufficient cash flow, also consider putting some aside for a rainy day—whether that be an unexpected bill or expense, wanting to purchase a large piece of equipment, or future business plans.”

You might find it easier to open a business account with the institution where you do your personal banking—due to streamlined application processes and transferring between accounts. But Maynard cautions you should focus on setting up your business accounts in the most efficient manner, as opposed to the most convenient, to avoid the considerable hassle of changing accounts later on.

“So, investigate and think about how you will need the accounts now, and in the future. Will you need to add an eftpos or online payment option? Can your bank and the chosen account you have work with that?” she says.

“While it might take some more legwork to set up with a different provider—the convenience you save in the beginning might be far outweighed by issues in the future if you don’t get it right.”

Business Bank Account Features To Consider:

• Ongoing and one-off fees: Check what you’ll pay for monthly account-keeping fees, ATM usage, in-branch transactions and more complex assisted transactions such as depositing cash or cheques.
• Accessibility and speed of transactions: Which processes and technologies matter most to you? For instance, some online accounts won’t support cash deposits, a savings account may only enable direct debits/credits with no associated card or eftpos payments, and a bank may not incorporate real-time payment tools like PayID or Osko.
• Overdraft availability and limits: If the ability to go into negative balance without taking out a loan is important for your cash flow, check you can add overdraft facilities to your account and review the interest payable on overdraft balances.
• Interest rates and conditions: Both transaction and savings accounts may offer interest, although a dedicated savings account usually has a better rate. Always compare based on the standard variable rate outside any short-term, introductory or conditional offers.
• Online banking and app features: Some products come with sophisticated in-built reporting, expense tracking and goal-setting tools that may benefit business owners. Does it provide bank feeds to integrate with your accounting software—such as Xero or MYOB?
• Broader merchant support: If you’ve got plans to expand your business through in-person sales or an eCommerce website, you may want to choose a bank that can help you realise those ambitions down the track.
• Security and access: If you need multiple people within the business to have access, consider how the account handles multiple signatories and its approach to cyber security.

Maynard says that while cheques are pretty much non-existent and cash handling is dwindling in Australia—some businesses do still need to accommodate payments in cash and cheques.

“So, think about that when making your bank choice—is there a branch or deposit ATM nearby that you can access?” she says.

“Again, you don’t want to waste energy and time driving around to find a branch, so factor how you are going to use the account when deciding what account and bank to use.”

Maynard said finding a good rate on your business savings account was important, but having to meet certain conditions can be a downside.

“For some that offer higher savings there is a minimum deposit and limited withdrawal condition placed on it. Don’t be blinded by the interest rate offer—make sure it will actually work with how you need and want to use the account,” she says.

There are a few accounts that combine everyday transactions and the ability to earn interest (we’ve included a few in our list below), but having a separate savings account can help you be more organised and be psychologically important to avoid spending.

“For your savings accounts, try to have them with another institution than what you have your transaction accounts with—this will mean it will be harder to access those funds, and you can’t do a quick transfer. Hopefully that stops you dipping into the savings unless you really need it,” Maynard says.

However, she says a better approach for sole traders could be to allocate savings into an offset account linked to your mortgage.

“The interest you save on the mortgage will normally be more than what is paid on savings accounts—plus you don’t pay tax on it,” she adds.

We’ve highlighted some of the best business transaction and savings accounts below.

Note: The below list represents a selection of our top category picks, as chosen by Forbes Advisor Australia’s editors and journalists. The information provided is purely factual and is not intended to imply any recommendation, opinion, or advice about a financial product. Not every product or provider in the marketplace has been reviewed, and the list below is not intended to be exhaustive nor replace your own research or independent financial advice. For more information on how Forbes Advisor ranks and reviews products, including how we identified our top category picks, read the methodology selection below.

To open a business bank account you’ll need to prove your identity and your connection to the business in question. You may be asked to provide:

• Your personal details and identification documents.
• Personal details for all other owners and partners.
• Your business name, address and industry type.
• Your ABN and/or ACN numbers.

You may also be asked to provide proof such as a copy of your partnership agreement, the certificate of registration of your business name, or your ASIC certificate of registration. Depending on the services offered by your chosen bank, you may be able to complete your application online (most common), over the phone/email, and via a branch.