Opening a business bank account in Australia is the first important step in managing your business. For partnerships, limited companies and trusts, it’s a legal requirement to have one, and for sole traders it’s recommended to separate your personal and business finances. 

This guide will explain what it takes to open a new bank account in Australia, whether it makes sense to switch over from your existing bank account into a business account, and lastly, it will reveal which are the best business bank accounts in Australia for 2023. Before we delve into bank account fee comparison in Australia, let’s have a look at our favourite solutions for each use case.

Right off the bat: Best Business Account for Borrowing Money (NO INTEREST)

One of the most important aspects of a small business bank account in Australia is the ability to borrow money, when you need to.

Using Australia’s top known banks (i.e. Big Four) could result in:

1. Sub optimal turnaround time
2. High likeliness of rejection
3. (if approved) High interest rate

But there are viable alternatives out there…

The best Australian bank account for businesses that may need to borrow funds would be Cape Business Account, one of the best business cards in Australia, with interest-free borrowing for 30 days (a perk that none of the small business loan providers or Australian banks offer). It also includes a built in expense management solution similar to the one offered by Brex globally (just without the cashback aspect).

Established in 2020, Cape is a pioneering fintech offering an innovative corporate card to SMEs. Businesses pay a low fixed fee instead of an interest rate, with plans starting at $8.99 a month and credit limits up to $500,000. Additionally, Cape’s card comes loaded with digital age features. The platform offers expense management tools, cloud accounting integrations, and enables issuance of physical and virtual corporate cards. Its API simplifies financial tasks by auto-populating books from receipts and memos. It supports seamless connections with various accounting software, and allows international transactions without fees. 

Cape Business Card

Best Business Account for International Payments and Multi-Currency Accounts

The Wise Business account allows you to hold over 50 different currencies and get local bank details for 10 different currencies. You can pay international suppliers, pay employees abroad, get paid by customers and manage your cash flow overseas, all in one place. 

It’s easy to open a business account online, there’s no monthly fee and international transactions are conducted with much lower fees compared to mainstream legacy banks. The only issue is when customers want to hold over $23,000 in the account. In this instance, there’s a 1.6% annual (or approximately 0.00437% daily) fee. If this impacts you, it’s worth looking into the Revolut account.

Wise Currency Card

Best Checking Account for Business

If you pay and collect cheques or need to deposit cash, you’ll need a bank with a physical retail network. Of the big four, ANZ has the lowest fees to conduct these activities and they’re the only bank to provide unlimited offline transactions if you opt for their $10 a month Business Advantage account. 

Best Online Business Account

Business banking with no fees at all? It might sound too good to be true but that’s exactly what the Prospa Business Account offers and its why it’s one of the best business bank accounts for SMEs who do the majority of their banking online.

Prospa, Australia’s most popular SME lender, has recently launched a transaction account which is specifically designed for SMEs. It’s quick and easy to set up and provides a simple way to control all of your business finances in one place. You can send and receive funds instantly, make payments with BPAY and schedule payments for the future. 

Prospa Business Account

What is a Business Bank Account? How is it Different from a Personal Account?

A business bank account, or corporate bank account, is the heart and soul of any company or small business. It’s the account that would be used to receive payments, make payments, and in most cases, save and/or borrow funds. Unlike a regular bank account, a small business bank account is a type of a bank account which is only accessible for enterprises, businesses and sole traders, consisting of certain business-specific features and perks, and often accompanied by dedicated assistance from SME specialists. 

Why use a business account over a personal account? Using a separate business account, as opposed to a personal one, enhances financial tracking and professionalism, offers specialised features like invoice generation and software integration, enables team collaboration and aids in building your business credit score.

Finding the best bank account for your business is not a “one size fits all”. Each business has its own unique set of requirements and needs. Some banks would have a better online system and better reporting, other banks would excel in greater flexibility for financing, while others would have better savings account interest rates. Ahead of switching to a corporate bank account, you should know what is your business’ main use-case of such an account so that you can narrow your search.

Best Bank to Open a Business Account – The Big 4

If you conduct all of your banking online, there is no need in this day and age to use Australia’s legacy banks to manage your company’s finances. With some banks, innovation is slow and customer service is poor. We favour innovative Fintech firms designed specifically for small businesses in Australia.

Still, they remain the only option if you want to conduct in-branch and offline banking activities. So if you still accept cheques or need to deposit cash, you’ll need a bank account from one of these providers. There are two main types of checking accounts that Australia’s big four offer:

• Free transaction accounts
• Premium transaction accounts with a monthly fee

Let’s compare both types of accounts provided through ANZ, CommBank, NAB and Westpac.

Free Business Checking Accounts 

ATM withdrawals and domestic electronic transactions are free on all basic accounts except the ANZ Business Essentials, in which only the first 20 electronic transactions are free. After that there’s a $0.60 fee which applies. So if you plan on doing most of your banking digitally, it’s probably best to swerve ANZ’s entry level account.

However, the ANZ Business Essentials account has the lowest fees for offline banking activities. The $0.60 fee for cashing or paying cheques is the joint lowest fee for this service, alongside NAB, and the $1.60 fee for receiving staff assistance in-branch is easily the cheapest of any of the big four.

As you’d expect, all accounts are accompanied by a debit card that can be used to pay suppliers online and in-person, wherever card is accepted. ANZ and Commbank cards are powered by Visa, whilst ANZ and Westpac cards are powered by Mastercard. Both are widely accepted throughout Australia and indeed the world. But if you’re frequently travelling overseas for business, the Cape business card is your best bet. All four of the major banks charge a 3% foreign transaction fee and an exchange rate markup may also apply. With Cape you’re charged absolutely zero fees and they pass on the Mastercard exchange rate – the best rate you can achieve when using a card abroad. 

All of the business accounts sync with major accounting software like MYOB, Quickbooks and Xero.

The key thing to note is that you don’t get any offline or in-branch transactions for free on any of the entry level accounts. You’re charged for these from the very first transaction. We’ll explore these fees in more detail and how many free offline transactions you’re granted on the paid monthly accounts.

Paid Business Checking Accounts (With a Monthly Fee)

All of the big four charge the exact same monthly fee for their premium corporate account – $10. If your business regularly uses a number of retail banking services it’s likely that you’ll be better off going for one of these paid monthly accounts. 

If you conduct just a handful of activities then it may prove cheaper to opt for one of the free accounts. ANZ’s free Business Essentials account would allow you to deposit 16 cheques a month ($9.60) before it works out more cost effective to opt for the paid account. But remember, staff assistance is charged in addition to other offline banking fees so this would only apply if you deposit the cheques at a machine yourself. 

Of the paid accounts, CommBank has the least competitive offering. Businesses are only granted 20 free transactions and after that a $3 fee applies to things like depositing money and cashing or paying cheques. They then charge an additional $3 for staff assistance. The fees with Westpac are the same but you’re granted 25 free transactions. The fees improve when you bank with NAB, staff assistance is slightly lower at $2.50 but cheques are significantly cheaper at $0.60. What’s more, you’re granted 30 free offline transactions a month.

When it comes to paid accounts, the ANZ Business Advantage is the clear winner. It’s one of the best business bank accounts if you’re frequently visiting a branch as it makes these services totally free. The silly cap of only 20 free electronic transactions is also removed by ANZ on their paid account. 

Westpac’s corporate accounts currently have an offer for MYOB accounting software – pay for 1 month and receive 12 bonus months.

You can open a business bank account online with any of the big banks but the due diligence process is lengthy and you won’t be able to use the account until you pass all required checks.

Background: Australian Banks and SMEs

There used to be a time when a bank was for life. The same bank you gained your first personal account with as a child, you’d progress to take your first mortgage and, for entrepreneurs, their first corporate bank account. However, Australians are becoming increasingly aware that the leading Australian banks exploit this relationship by offering poor service and high fees. And this doesn’t just apply to transaction accounts – foreign exchange, business loans and card processing can all be costly for SMEs with legacy banks.

It’s notable that all four banks charge the exact same monthly fee – $10 – for their paid business transaction accounts. Limited competition provides little incentive for one to offer a cheaper product.

One trail of thought is that by holding a transaction account with a certain bank, and using them as your primary transaction banking partner, you’re more likely to be approved for finance from that institution. And whilst this might be true for multinational corporations who hold millions of dollars with a bank, it’s not so relevant when it comes to SMEs.

The Reserve Bank of Australia published a report on the current climate of SME Finance in the autumn of 2022 and found “Small businesses continue to report that accessing funding through banks is a challenge, although new lenders and products are providing alternative sources of finance.”

Whilst we’ve seen a rise in lending volumes to medium and large businesses over the last two years, there’s actually been a fall in lending to small businesses. Accessing suitable amounts of finance through traditional lenders remains challenging for small businesses, with difficult approval processes and substantial collateral requirements.

These lending statistics help to paint a picture for how SMEs continue to be underserved by legacy banks with other types of financial services too.

Fortunately, the rise in technology has also made it easier to use fintechs for a variety of different financial needs – whether that’s business banking, business loans, business credit cards or payment acceptance. 

Companies like Cape specialise in providing corporate cards for Australian businesses. That’s a mixture of both credit and prepaid debit cards, allowing businesses to manage and track business spend with clear insights and helpful reporting tools.

Some fintechs like Prospa and Revolut are even starting to expand into multi-product functionality which means they can provide a one-stop shop for SMEs, much like traditional banks.

The Rise of Online Business Bank Accounts

One of the primary issues with Australia’s largest banks is the poor level of service they provide to SMEs. For these banks, the lion’s share of profits are made through big corporate customers and, thus, most of their resources are funnelled this way. SMEs, too small to have a dedicated relationship manager, will know the feeling of waiting hours on end just to speak to a generic customer support team. 

To reduce fees, access solutions faster, and receive an overall better level of service, it’s generally best to consider a fintech solution. These solutions have been growing fast in popularity over recent years and the leading fintechs now have millions of customers around the world.

Consider these challenger banks if you’re seeking an online business account, using the comparison below.

Prospa Account: Single View, No Transaction Fees

Prospa, Australia’s no.1 online lender to small business, has now joined the race to provide Australia’s best-value SME account. We think their feedback speaks for itself – with a TrustScore of 4.9 / 5 from over 7,000 reviews, we’re confident their business account will prove a success too.

Prospa Business Account

Prospa provides a free and easy-to-use online business account to help small businesses manage cash flow and reduce admin. You can open a business account online in minutes, and with minimal paperwork. If you have a business loan through Prospa, you’ll have one single view of your financial position, combining your transaction account and any outstanding business finance you have with the lender. 

Fees for the Prospa Business Account are as follows:

• Transaction Fees: $0
• Account opening: $0
• Account keeping: $0
• Overdrawn: $0
• Direct debit dishonour: $0
• ATM withdrawal: $0 at all major bank ATMs
• Domestic Transaction: $0
• International transaction: 0%
• Card Replacement Fee: $0
• Transaction Dispute Fees: $0
• Card payments: $0
• Non-card payments and transfers: Up to $20

Basically, there are no fees at all for using Prospa’s online business account. The only time a fee applies is if you want to dispute a transaction on your account which wasn’t made by card.

The account is accompanied by a Visa Business Debit Card and there’s even a 0% foreign transaction fee when you use it abroad. 

Eligible customers will be able to access an overdraft limit up to $50,000 but, for now, this is still being piloted. You’ll need to ensure you have money in your account to make payments.

Wise: Cheaper Domestic and International Payments

Wise, one of the hottest fintech companies globally, has been operating in Australia since 2016. What sets Wise apart is their transparency. They don’t hide fees, making it easy for you to know the exact amount you’ll pay before making a transfer.

Wise Business Account

No monthly fees! However, to activate your account, there’s a one-time $22 fee.

When it comes to the best business banks in Australia, the Wise Business Account stands out as the most global option available. You can hold more than 50 different currencies and have local bank details for 10 currencies. Online sellers can effortlessly withdraw funds from platforms like Amazon and Stripe using their local account details.

Currency transfer fees vary depending on the currency, but typically include a fixed fee of around $0.50 and a variable fee (similar to an FX markup) of approximately 0.4%. This is significantly cheaper than the fees and markups charged by major Australian banks.

However, if you frequently make domestic transfers, the Wise Business Account may be less appealing due to a $0.57 fee per payment. Additionally, if your account balance exceeds $23,000, there’s a 1.6% annual fee (around 0.00437% daily) on the excess amount.

Overdrafts, cash deposits, and cheque deposits are not available with the Wise Business Account.

The Wise Business Account works best when used alongside another transaction account for domestic transactions.

Revolut: Best for International Payments & Overseas Travel

The Revolut Business Account is a premium solution with higher monthly fees than even the big four legacy banks.

Currently, Revolut offers two online business account options: ‘Revolut Grow’ at $25/m and ‘Revolut Scale’ at $100/m. These solutions are primarily designed for mid-sized companies, offering features tailored for teams.

The account seamlessly integrates with accounting software like Xero and corporate tools such as Slack.

Revolut Grow

With Revolut Grow, account holders receive one free metal card and can request plastic cards for their business needs. They have convenient control over employee permissions and spending limits. Payments can be approved online or through the Revolut app. Additionally, for an extra $8 per employee, account holders can manage employee expenses.

For businesses making frequent international payments, a Revolut account can provide significant value. Revolut Grow offers 10 fee-free international transfers per month. After exhausting the 10 transfers, the international transaction fee is $5.

Currency transfers up to $15,000 per month can be made at Revolut’s competitive rate, without any FX markup and close to the interbank rate. Beyond this limit, the FX markup can go up to 0.4%, depending on the currencies involved. Still, this is considerably cheaper than the FX markup charged by Australian banks.

Businesses can hold funds in 25+ currencies and enjoy local spending capabilities in 150+ countries, making it an excellent choice for expanding businesses.

On the downside, Revolut Grow has a limit of 100 free domestic transactions. After exceeding this limit, each transaction incurs a charge of $0.20.

Revolut Scale

In terms of monthly fees, Revolut Scale is the most expensive online business bank account on the market. But even this account can make financial sense if you use it to its full capabilities.

Account holders get two free metal cards and the option to request plastic cards as needed. The key difference with this plan is the increased number of fee-free transactions available. Revolut Scale allows up to 50 fee-free international transfers and 1000 domestic transfers. After surpassing these limits, the same $5 and $0.20 fees apply, respectively.

Currency transfers up to $75,000 per month can be made at Revolut’s competitive rate. Similar to the Revolut Grow account, once the monthly limit is exceeded, the FX markup can reach up to 0.4% based on the currencies involved. Nevertheless, this rate remains substantially cheaper than the FX markup charged by Australian banks.

Last Word: Best Business Account Australia

There is no specific corporate account that can provide a solution to every business requirement for free. Therefore, the answer to the best business bank account in Australia is nuanced. ANZ provides arguably the best all-round business account if you need to deposit cash, whilst Prospa provides the cheapest business bank account and the Cape Business Account is the most innovative solution on the market for short-term borrowing.

Remember, there’s no need to settle on just one transaction account, especially if your business is expanding overseas. In this guide we have determined the best business accounts per various use cases, and compared between them accordingly. So consider what you need to use a business account for and then make your selection from here. Don’t be afraid to opt for more than one account if you need a blend of different features.