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How to Open a Business Bank Account

You’ve chosen a name, registered your business, and are ready to start trading. Now it’s time to open a business bank account. Keep reading to learn how to open a business bank account in Australia, no matter your business size and industry.

Why should you open a business bank account?

Your banking obligations will depend on your business structure. In Australia, if you’ve registered as a trust, partnership, or company, you’re legally required to open a business bank account that’s separate from your personal account. Sole traders don’t have this same obligation, but there are still plentiful benefits to keeping your business and personal finances in separate accounts. It’s easier to track income and expenses, creating a clear paper trail for your financial records and tax reports.

Types of business bank accounts

Before you open any new account, it’s a good idea to understand your options. Most banks will offer the following:

  1. Everyday account: This type of account is used for your everyday transactions and cash flow. Everyday transaction accounts are like personal checking accounts. They feature low monthly fees and high degrees of flexibility. Some accounts will have a limit on daily transactions, so be sure to read the fine print carefully.

  2. Specialty account: Banks also offer more specialised accounts for specific industries, such as non-profit organisations and freelancers.

  3. Business savings account: You might also want to open a savings account, which offers a place to set aside funds to keep them safe from everyday expenses.

How to open a business bank account in Australia

It’s often easiest to open a business bank account where you currently hold a personal account. However, you can choose to open an account with any of the big four banks in Australia, as well as most smaller ones. After comparing fees, terms, and conditions carefully, the first step is to gather some identifying information.

  • To open a business bank account, you’ll need to provide:

  • Proof of identity (photo ID such as valid passport or drivers’ licence)

  • Proof of address (utility bill or similar)

  • Registered business name (as listed with the Australia Securities and Investments Commission)

  • Registered business address

  • Business tax filing number

  • Australian Company Number (ACN)

  • Australian Business Number (ABN)

With supporting documents handy, the next step is to fill out an application form either in person or online. Whether or not you’re able to open the account online depends on the business structure and credit history. In either case the bank will verify your identity and business information, opening up the account.

Once the account has been opened, you will receive associated credit and debit cards. You’ll also be able to set up online banking with unique passwords.

How long it takes to open a business bank account

So, how long does the whole process take? There are a few factors that will influence the timeframe. The answer to how long it takes to open a business bank account depends on whether you apply in person or online.

If you have all your required documents and identification materials prepared for your application, the full process can be completed in under half an hour. From there, your account should be functional within one to two business days.

How to open a business bank account with bad credit

If your credit history is less than perfect, you may be wondering how to open a business bank account with bad credit – or if this is even possible. Business owners with a poor credit rating will find it more difficult to open an account, but it’s not impossible. To begin with, you’ll likely need to show more documentation regarding your personal finances. It’s also unlikely that you’ll be able to open an account online. Instead, you’ll need to meet face to face with a bank representative to discuss your options.

Business banking fees to consider

On a final note, as you compare your business banking options it’s important to compare fees. While personal accounts often waive monthly fees, you can expect to pay between $10 and $25 per month for a business bank account. Some banks offer a prespecified amount of transactions included in your monthly fee, while others will offer unlimited assisted transactions. Additional costs include things like:

  • Currency exchange fees

  • Online banking fees

  • ATM withdrawal fees

  • Establishment fee

This is why it’s worth shopping around to find the best fit for your first business account, both in terms of conditions and fees.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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