How to open a business bank account in Australia: Step by step guide

If you own an Australian registered business, partnership or trust, the chances are that you’ll be legally obliged to have a separate business bank account to arrange your finances and pay your taxes. However, even if you’re a freelancer or sole trader, and having a business bank account isn’t mandatory, you may find that getting one makes life easier and cuts your costs, too.

This guide walks through all you need to know about opening a business bank account in Australia including which entity types need one, the benefits of a business bank account, how to choose one and the normal account opening processes to know about. We’ll also dive into some of the main business account providers in Australia, including traditional banks and alternatives like Wise and OFX, which can be cheaper and more convenient – particularly if you trade internationally.

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What is a business bank account?

A business bank account is simply an account used to keep your company transactions and finances separate from your personal funds. Business bank accounts can be opened in the name of your registered business, and often come with lots of features and perks which are useful for entrepreneurs and company owners. Business accounts are offered by regular banks, as well as specialist providers, with the key features and fees designed to suit different business types and sizes.

Does my business need a business account?

Sole traders and freelancers aren’t legally obliged to have a business bank account, but can still find it handy to have one. We’ll take a look at some of the specific benefits of having a business bank account in just a moment.

In Australia you must have a separate business account for tax purposes if you have a:

  • Company
  • Partnership
  • Trust

That’s because, as the owner of a registered entity of these types, your personal and business finances are considered separately for tax purposes. Having a business bank account makes your company and tax accounting processes far easier – and if you pick the right provider, you might also find you cut the costs of transactions, too.

What are the benefits of having a business bank account?

You may be legally obliged to have a business bank account – but even if you’re not, there are some great benefits which make it worth considering. Here are a few perks to consider:

  • A business bank account makes it far easier to track and analyse your company’s performance
  • Register your business bank account in your company name to create a more professional impact when dealing with clients
  • Business bank accounts often offer lower fees compared to personal accounts  for the types of transactions companies need to make frequently
  • Business bank accounts often come with features to cut admin time, like batch payments and cloud based accounting integrations
  • Your chosen bank or provider may also offer other business financial services like loans or investment advice
  • It’s easier to manage your tax accounting and company reporting requirements when your company finances are independent of your own money

How to choose a business bank account

If you’ve decided it’s time to open your business bank account, you’ll need to do a bit of research to find the right fit for your specific needs. Different banks and specialist providers offer accounts which have varied fees, features and services, so comparing a few is the best way to choose. Factors to consider include:

  • What are the account maintenance fees?
  • How much are the charges for transactions – particularly those you’ll make regularly?
  • How easy is the account to operate – what’s customer service like?
  • Can you get a linked bank card for yourself or other team members?
  • Can you add multiple users to your account to allow your team to view or transact according to their role in the business?
  • How easy is it to make and receive international payments – what are the fees and exchange rates offered when you do?
  • Can you hold multiple currencies in your account?

To kickstart your research, we’ll look at some key features of some major Australian banks and a couple of specialist providers – Wise and OFX. Specialist providers like these can often offer lower overall transaction costs and a more convenient user interface, as well as features like multi-currency functionality and instant international payments.

Account fees Card options International usage Key features
Wise One off fee of 22 AUD to open account

 

No monthly charges, no minimum balance

Linked international business debit cards available

 

1 card is free, subsequent cards cost 6 AUD each

 

2 free ATM withdrawals anywhere in the world, to a total of 350 AUD/month; 1.5 AUD + 1.75% after that

Send payments to 80+ countries, from 0.41% fee

 

Hold and exchange 54 currencies

 

Local bank details for 10 currencies

Exchange currencies using the mid-market rate and low fees

 

Integrate with cloud based accounting software

 

Make batch payments and automate workflow with the Wise API

OFX No monthly charges, no minimum balance Not available Make payments around the world, with currency exchange costs which beat the banks

 

Local bank details for 7 currencies

Get paid in 7 currencies from marketplaces, payment gateways and direct from clients

 

Set up one off and automated payments in a range of currencies

 

Integrate with Xero accounting software

 

NAB Business Everyday Account Choose between an account with no monthly fee, or pay 10 AUD/month to get 30 free eligible transactions/month Link your account to a business Visa debit card – no fee to get a card issued Sending international transfers – 10 AUD to 30 AUD fee + exchange rate markup

 

Receiving international transfers – 15 AUD fee

 

3% foreign transaction fee on card spending

Basic account has no monthly fee

 

Electronic transactions are usually free

CommBank Business Transaction Account Choose between an account with no monthly fee, or pay 10 AUD/month to get 20 free eligible transactions/month Link your account to a business Visa debit card Sending international transfers – up to 30 AUD fee + exchange rate markup

 

Receiving international transfers – up to 11 AUD fee

Basic account has no monthly fee

 

CommBank invoicing available

 

Electronic transactions are usually free

ANZ Business Essentials No monthly charge, with up to 20 free transactions per month Link your account to a business Visa debit card – no fee to get a card issued

 

Visa card can be used for mobile payments

Sending online international transfers is free to a small selection of countries – 9 AUD + exchange rate markup for most destinations

 

3% foreign transaction fee

 

5 AUD international ATM withdrawal fee

No monthly service fees

 

Link to your accounting software to cut down admin time

Try Wise Business
Try OFX Business

How much does it cost to open a business account?

The costs to open and operate your business account will depend on the provider you select. Some traditional banks offer the option of an account with no monthly fee, but in this case you’ll often pay for every in person transaction you make – you’ll also often have the choice to pay a monthly fee in exchange for a limited number of free transactions per month. Online providers may charge a one off fee to set up your account, but are often cheaper for day to day transactions compared to normal banks.

Here are the costs for opening and maintaining an account with the providers we selected above:

Account fees
Wise One off fee of 22 AUD to open account

 

No monthly charges, no minimum balance

OFX No monthly charges, no minimum balance
NAB Business Everyday Account – choose between an account with no monthly fee, or pay 10 AUD/month to get 30 free eligible transactions/month
ANZ ANZ Business Essentials – no monthly fee

 

ANZ Business Advantage – 10 AUD/month

ANZ Business Extra – 22 AUD/month

How to open a business account in Australia

The process to open a business account will depend a little on the bank or provider you select. Online specialist services offer a fully digital account opening process, which means you can apply and get verified without needing to visit a bank branch. Traditional banks often also offer online application processes, but may need to call you to confirm your account details, or ask you to visit a branch to submit your identification documents.

In most cases, the process to open your Australian business bank account will be as follows:

  1. Choose the provider and account that suits your needs
  2. Check and gather all the information and documents required
  3. Complete the application form in hard copy or online
  4. Provide your documents to the provider – either uploading digital copies or presenting them in a branch
  5. The bank or provider will verify your account, which may be instant, or may take a day or two
  6. Once your account is verified you’ll be able to add funds, and get your linked card for easy spending

What do I need to open a business bank account?

When you open your business bank account you’ll need to provide the following information and paperwork:

  • Full business and legal name as registered with ASIC
  • Primary business address
  • Australian Business Number (ABN) or Australian Company Number (ACN)
  • Industry type
  • Identification, name and address for all owners or partners
  • Foreign tax status of any owners if relevant
  • FATCA and CRS information for the company

Identification documents accepted can usually include government issued photo ID like a passport or driving licence, or a combination of other documents which together establish your identity and address.

How long does it take to open a business bank account?

In most cases, applying for your business bank account will only take a few minutes once you have gathered all the information and documentation required. However, banks and specialist providers will usually need to complete verification checks on you and your business, to comply with local and international law. These can take a day or two, and may mean you’re asked to provide further information or paperwork before you can use your account.

Can I open a business bank account in Australia as a non-resident?

You’ll be able to open a business bank account in Australia as a non-resident, as long as your business is registered in Australia. You’ll need to provide your ABN or ACN – your proof of business registration – as part of the account opening process.

It’s worth knowing that banks may have different requirements for non-resident customers, including requiring additional proof of identity and address. Check what your preferred bank needs before you start your application.

Can I open a business bank account online?

You can open an Australian business bank account online, either with a specialist provider, or in some cases, with a traditional bank. It’s common for traditional banks to allow you to complete the application online – but you might still have to wait for a call back to have your account verified once you’ve submitted your information. Online specialist services offer a fully digital account opening process, allowing you to apply and submit images of required documents more easily.

Can I switch business bank accounts?

There’s a great range of business accounts available, so if you decide you need to find a new one you’ll have plenty of choice. Switching business bank accounts is usually pretty simple. All you’ll need to do is open your new account, transfer any recurring payments from your old account to the new one, and pass your new account details to customers to receive payments. Withdraw any remaining account balance and close your old account, and you’re all done.

Types of business accounts in Australia

Both traditional banks and specialist providers have a good range of business account products on offer. You’ll find:

  • Accounts with no monthly fee which may be best for small business transacting mainly online
  • Accounts with a low monthly fee and some free transactions
  • Accounts which are aimed at medium to large sized businesses
  • Accounts for corporate clients which offer more specialist services and features

As well as transaction accounts which are aimed at companies needing to manage day to day finances, there are also specialist accounts which are handy for saving and investing, foreign transactions and transfers, and accounts which come with credit services.

Conclusion

Opening a business bank account in Australia may be mandatory if you’ve got a registered business, partnership or trust – and although it’s not obligatory for sole traders and freelancers,  it’s still recommended as a smart way to manage your money.

Business accounts are offered by traditional banks and specialist online and mobile service providers which can come with low fees and some helpful features to save time and money. Check out a range of providers and account types to find the best fit for you, looking carefully at the ongoing charges and fees for the transactions you’ll need to make regularly.

Try Wise Business
Try OFX Business

FAQs

  1. Is it easy to open a business bank account in Australia?

Apply for an Australian business account in just a few minutes online. You’ll then need to upload or show documents proving your identity and address, so the bank can complete a verification step and open your account. In most cases, the process is pretty painless and can be done in just a day or so.

  1. Do I need a business bank account if I am a sole trader?

It’s not mandatory to have a business bank account as a sole trader – however, it can be a good way to keep your personal and business funds separately and make tracking your business performance more straightforward.

  1. How much does a business account cost?

Business accounts may be free to open, have a low one time fee for opening, or have ongoing monthly charges. Shop around to find the best account option for you, based on your business needs and budget.

  1. Does an Australian company need an Australian bank account?

Legally, Australian registered companies, partnerships and trusts must have a separate business bank account for tax purposes.

 

By George Updated August 4th, 2022