Business bank accounts are used to keep your money safe while conducting day-to-day transactions. They are useful for any business making and receiving regular payments.

An existing personal account is perfectly okay to use, although it is a great idea to set yourself up with a business bank account if possible. The Australian Tax Office doesn’t demand separate bank accounts, but they recommend it.

For small business owners operating as a sole trader or in a partnership, there is no legal requirement to have one and if you can’t remember how you’re registered, simply search the ABN Lookup to find your entity type.

To apply for a business bank account in Australia your business will need to have an ABN or ACB and be registered with the Australian Security Investments Commission (ASIC). You’ll also need a tax file number if you’re a partnership, company or trust and be registered for GST if your turnover is over $75,000 annually.

What are the types of business bank account?

Business bank accounts are usually set up for the convenience of the business and are typically a transaction or savings account. Usually, only high-interest savings accounts will generate interest meaning they are mostly used to deposit and withdraw money.

There are three typical types of business bank accounts:

  • Business transaction account: allows businesses to deposit and withdraw cash through ATM cards, electronic debit cards, and cheques. They may require a minimum deposit, proof of business and identification.
  • Business savings account: allows businesses to accrue interest. They are not linked to cheques and debit cards and are access to funds is generally harder.
  • Business term deposit: used by businesses to deposit a portion of their assets for a guaranteed return over an agreed period.

What are the advantages of a business bank account?

The key advantages of opening a business bank account include:

  • Easier to manage your cash flow and track business expenses.
  • Saves time separating out the information needed to do business tax returns and accounting.
  • Flexible banking for your staff.
  • Improved customer perception: having a business bank account can help convey a professional image and show you take your finances seriously.

Before you open a business bank account

Before you open a business bank account it is worth taking a close look at the cash flow of your business and the frequency of transactions. This will help you decide whether you need a business savings account and who will need access to it. It will also help you weigh up the associated fees and any additional features.

More info here:

Set up a business bank account
Your guide to comparing business bank accounts

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Sam Edmond

Sam Edmond is Digital Marketing Director for Live group. His digital marketing experience includes roles in Auckland, London, and Sydney. Sam is a Kiwi and supports Arsenal F.C.