Small business banking: finding a business bank account
Whether it’s a sole trader, partnership or incorporated business, there are a variety of business bank account options provided by banks that are tailor-made for small business owners. The fees and charges associated with business bank accounts can be a bit of a trap, however. As with any business decision, it pays to shop around for a business bank account that is competitive to make sure as much of your money stays with your business and not with the bank.
Opening a business bank account
Most banks give you the option of applying for an account online, so it is relatively simple to get started, and the application process is certainly made smoother if you have your documents in order before you apply.
You will find that the banks usually have at least five different types of banking accounts that have been created to cater to different types of businesses. Take some time to get familiar with what’s on offer so you match your business to the right the product. Once you have found an account to suit your needs, to open a business bank account, most banks will require you to provide an Australian Business Number (ABN). You can apply for an ABN online for free through the Australian Taxation Office's website.
Each bank has different requirements from businesses looking to set up a bank account. Most provide details on their websites of what they need from you. To speed up the process go in prepared, with your information in order and with a smile; patience will get you a long way. Banks can be very particular when it comes to business banking so try not to get frustrated by the process.
Things to look out for
- The currency conversion fee, this would be important if you do a lot of trading online and/or overseas
- Fee for using cheques
- Option of a MasterCard or Visa debit card, making everyday transactions easier, as well as the option to use the card online like a credit card
- Monthly account keeping fee
- Transaction fees and limits, including over-the-counter transaction fees or fees for going into the branch
- Opening hours of your local branch. This varies between banks, some open later on weekdays, while others also open on weekends
- Whether or not the account allows for batch payments
- Interest rate for deposits, if you are dealing with large sums of money, you could be missing out on earning extra income from interest if you don’t use a high interest account
Business Savings Bank Accounts
If you are likely to have some spare cash available at times, setting up a savings account in conjunction with your transaction account can help you to earn extra interest. If you have the money in the bank you might as well make it work for you!
Business Transaction Bank Accounts
This will usually be the account you make all your payments into and out of. As described above you can set up a savings account as well in order to make some more interest from money you have. If both accounts are with the one bank it will likely be an immediate transfer between your two accounts.