Business Transaction Accounts Background

Compare Business Bank Accounts

Compare business transaction accounts to find high interest transaction accounts with the right features for your business. Canstar’s FSG and website terms of use apply to the use of the information on these pages.

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About Business Bank Accounts

A business bank account is a type of transaction account you can use for all the financial affairs of your business, as opposed to an account that’s for your personal use. So when do you need a business bank account and how does it work?

What is a business bank account?

You must have a separate business bank account for tax purposes if you’re operating as a partnership, company or a trust, says the Australian Government’s business advice website. If you’re a sole trader you don’t need a business account, but the Australian Taxation Office says it may be a good idea to do so anyway as part of your business record-keeping.

“That way you can easily separate your business transactions from your personal ones, including any cash taken from money your business receives (often referred to as ‘drawings’),” it says.

If you expect your business to grow and employ people later on then the NAB says that’s another good reason to have a business account already set up.

“If you start with a personal account then swap to a business account, you’ll have to tell your suppliers and customer(s) to change the banking details they have on file for you,” says the bank.

You can check the status of your business registration with the Australian Business Register.

What are the benefits of using a business bank account?

One of the main benefits of a business bank account is that you have a record of your business transactions, says the government’s business advice website. That way you can keep a track on your business income and expenses.

This can save you time when it comes to preparing financial documents, business activity statements, tax returns and other information needed to meet your tax and reporting obligations. This can be especially helpful if you use an accountant.

How to find the best business bank account?

Finding the best business bank account means finding one that best suits the needs of you and your business.

Several banks in Australia offer business bank accounts and each offer similar services, fees and charges. But there are some differences between banks and accounts so you need to find the ones that could work for you.

For example, a number of banks offer services that you can use to connect to various accounting software. If that’s something you’d like, you need to check that the banks you’re considering can work with your software of choice.

You should also work out whether you can do all your business banking online-only via a website portal and/or app, or whether you may need the services of a branch from time to time. This can make a difference to the type of business bank account you need to consider.

How to compare the best business bank accounts?

If you’re looking to compare business accounts you can use Canstar to help fine-tune your search (above). You should first consider whether you’d prefer to do just online (electronic) banking or whether you’d like the option to use the full banking services, which may include in branch services.

You can then further refine your search to consider things such as any free branch transactions (if relevant), monthly fees and any minimum opening balance. You can further filter your options for things such as any interest rate on balances, overdraft facility and a range of banking fee options.

You may also want to consider those services in Canstar’s Star Ratings including those regarded as offering outstanding value to customers.

Canstar’s Business Savings and Transaction Account Awards recognise those institutions that provide outstanding value to consumers in Australia through their suite of business savings and transaction products. To identify the award winners, each eligible provider is assessed using Canstar’s sophisticated methodology.

How to apply for a business bank account?

Once you’ve decided on which bank suits your business banking needs then it’s usually fairly easy to set up an account.

Check with your chosen bank to see what they require but you will usually need proof of identity, such as your birth certificate, drivers licence, Medicare card or passport. You will also need to provide you business details such as an Australian Business Number (ABN) or Australian Company Number (ACN).

If you don’t think you have enough documents then Westpac says it’s best to contact the bank to see what else may be needed.

“Sometimes it might be difficult to satisfy all requirements,” Westpac says on its website. “If, for genuine reason, you are unable to provide enough identification to meet our requirements you might be able to provide other forms of identification.”

You may be able to complete your application online or your bank may require you to attend a branch to open your business account. If you want other people on the business bank account they may also need to attend a branch.

Again, check with your bank of choice to see what you need. Before signing anything though you should take care to read any relevant documents, including any terms and conditions, associated with any business banking product you are considering.

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Important information

For those that love the detail

This advice is general and has not taken into account your objectives, financial situation or needs. Consider whether this advice is right for you.

Canstar does not rate or compare every provider in the market and we may not compare all features relevant to you. Learn more about our Business Savings and Transaction Accounts Methodology. Star Ratings are only one factor to take into account when considering products. Check current product details and investment options with the product issuer.

Any advice on this page is general and has not taken into account your objectives, financial situation or needs. Consider whether this general financial advice is right for your personal circumstances. You may need financial advice from a qualified adviser. Canstar is not providing a recommendation for your individual circumstances. It’s important you check product information directly with the provider. Consider the Product Disclosure Statement and Target Market Determination (TMD), before making a purchase decision. Contact the product issuer directly for a copy of the TMD. For more information, read our Detailed Disclosure.

What is a Target Market Determination?

A Target Market Determination (‘TMD’) is a document that explains which people particular financial products may be suitable for (the target market) and sets out any conditions around how financial products can be distributed to consumers.

Why do product issuers provide Target Market Determinations?

From 5 October 2021, TMDs are compulsory for most financial products.

Issuers and distributors of financial products must take reasonable steps that are likely to result in financial products reaching consumers in the target market defined by the product issuer.

We recommend that you consider the TMD before making a purchase decision. Contact the product issuer directly for a copy of the TMD.

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