Every business needs a secure place to keep its earnings and distribute them as necessary. In the past, that could have been as simple as storing cash funds in a secure location (like a safe), and making the occasional trip to the local bank to deposit it. Not anymore.
The realities of the modern economy have made business bank accounts indispensable. The Reserve Bank of Australia reported that cash only accounted for 32% of all in-person payments in 2019, and made up just 19% of in-person payments in terms of value. In fact, cash hasn’t been used for the majority of in-person payments since 2013. Australians are demonstrating their preferences with their wallets. And their phones. And their smart watches. It’s clear that Australians are all-in on new payment methods that offer them more flexibility, safety, and control.
With this titanic shift in how money exchanges hands, it’s more important than ever before to have a business account. But it shouldn’t have to cost you. Finding the right free business account will maximise your benefits and minimise your costs.
Every bank and financial services provider has its own approach to offering business accounts and structuring the fees that come with them. Some have a wide range of add-on services that can be very valuable to the right business, but come at an additional cost. Others require fees simply for continued access and use, without any added benefits. Identifying what’s relevant and useful to your particular business will help keep costs low — and perhaps even non-existent.
While bank fees aren’t eye-poppingly expensive, they are a recurring expense that adds up over time. A few dollars here and there for account maintenance each month eventually equals thousands spent on a service, where less-expensive options exist. While exact figures on the price of business banking are hard to come by, it’s easy to review the financial pitfalls of personal banking and consider connections between the two. Consumer advocacy group Choice found individuals and households paid roughly $4.5 billion in banking fees in 2017, up from $4.38 billion in 2015. That’s more than $450 per household, per year!
Do you know the fees your own bank charges for your business account?
You may be able to reduce your own banking costs without losing out on key services or options. No-fee accounts give you access to a bedrock service while keeping the cost to your business low.
Many so-called "fee-free" business accounts have major limits, like the volume of transactions you can have, or other factors which lead to fees if and when they are exceeded. Many still charge an annual fee, despite being “free”. However, other free small business accounts — whether a free business savings account or transaction account — come with few or no restrictions.
One feature to look out for when selecting a fee-free business account is the ability to manage your money online. As a business owner, you need easy and secure access to your funds for review and disbursement. Otherwise, you’ll have to put in much more time and effort to manage your earnings.
Another important consideration when looking for the best free account for your business is how easily it can work with other financial tools your business needs, like EFTPOS (Electronic Funds Transfer at Point Of Sale) machines.
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