Business savings accounts

What is a business savings account?

A business savings account is an account that allows you to earn interest on your business funds while you're not using them. It's like a regular high interest savings account, except it's for business use rather than personal use. A business savings account will sometimes have a minimum balance requirement that needs to be met in order to earn interest, and this balance requirement is usually higher than those on personal savings accounts.

How to access your money in a business savings account

By linking the business savings account to a business bank account, you can easily transfer money back and forth when you need to. It can be a good idea, if possible, to link your business savings account to a business bank account with the same bank so you can see both accounts side-by-side in your mobile banking app or Internet banking portal.

How business savings account interest rates work

Like regular savings accounts, business savings accounts offer variable interest rates meaning they can change at any time. They're not fixed like they are with a term deposit or fixed-rate home loan. A lot of business savings accounts offer tiered interest rates, meaning the higher your balance the more interest you can earn. There might also be other conditions to meet to earn more interest, such as meeting the minimum balance requirement or making regular deposits.

Who can open a business savings account?

A business savings account is not for personal use. You can only open a business savings account if you're operating as a sole trader, partnership or trust in Australia. This is to ensure that all businesses are keeping their business finances separate from their personal finances. If you're a sole trader you're not legally required to use a dedicated business account, however you might find it easier to do so.

You will need to prove you're a business by providing your Australian Business Number (ABN) and/ or Australian Company Number (ACN), plus supply your registered business address when opening the account.

Our expert says

"You can access the money in your business savings account whenever you need it, making it a convinient option to get a bit more out of your business cash while you're not using it. The interest rates aren't overly high, but, it's better than just keeping the money sitting in a bank account earning nothing at all.

And unlike a term deposit which locks your money away, or other investments which carry risk, a business savings account is a low-risk, easily accessible option."

Alison Banney

Editorial Manager, Money

Business savings accounts have many benefits

Business savings accounts are specially designed with a range of features to help your business better manage its finances. These accounts can;

• Allow you to earn a high rate of interest on business funds, much higher than you would receive in a business transaction account
• Offer a bonus interest rate for a special introductory period
• Offer low or no transaction fees
• Allow easy access to your funds if required
• Offer the security and confidence of knowing that your money is protected by the Australian Government Guarantee
• Be tailored to suit short or long-term business goals

How to compare business savings accounts

Consider the following:

• Check the fees. Look for a business savings account that doesn't charge any monthly account keeping fees.
• Transaction limits. If you often need to withdraw money from your business savings account, look for one that allows several (or even unlimited) withdrawals. Some savings accounts will apply a monthly withdrawal limit of just one or two transactions.
• The interest rate. The main benefit of a business savings account is the ability to earn interest on your funds. Interest rates vary from bank to bank, with some even offering a higher introductory rate for a few months after opening the account.
• Access to funds. Make sure you can easily access your account using Internet banking and via a mobile banking app when you're on the go.
• Minimum balance requirements. With some business savings accounts, the minimum balance requirement can be in the tens of thousands of dollars, while with others there is no minimum balance requirement at all. Consider how much your business can afford to have locked into savings when comparing the different accounts.

How to open a business savings account

Ready to open a business savings account? Follow these steps to open an account today.

1. Compare accounts. Use our table above to compare business savings accounts.
2. Complete the online application. You’ll need to provide your personal details as well as your business ABN, ACN and tax file number. Your business must be registered in Australia, with a registered address.
3. Verify your identity. You, and anyone else who will have access to the account, will need to verify your identity using your driver’s licence, passport or Medicare details.
4. Account opened. When the bank has verified your business, your new business savings account will be open and ready for use. You can now access the account via Internet banking or with the mobile banking app to transfer money into it from your business transaction account.

Frequently asked questions

• How am I taxed on my business savings account?

  your business will need to pay income tax on interest it earns in a business savings account. Make sure to keep track of any interest you earn each year and declare it to the ATO. If you add your TFN to your account, the ATO should have access to the interest data.

• What is the difference between an ABN and ACN?

  An Australian Business Number (ABN) is issued by the Australian Taxation Office (ATO) to all businesses, from sole traders right through to large corporations. It is an 11-digit number and must be displayed on any invoices the business issues. An Australian Company Number (ACN) is issued by the Australian Securities and Investments Commission (ASIC) to every new company in Australia. This nine-digit number ensures that companies can be identified when transacting business. The ACN identifies your business while the ABN allows your business to carry out transactions.

• Can I apply for a business savings account with a bad credit score??

  Yes, you can. The money in a business bank account is not credit or a loan, it's your money. You can only access money that you put into the account.

• Can a business savings account be used for personal savings?

  No, these accounts are designed specifically for businesses.

• I have multiple employees who will need to access my business savings, is this possible?

  Yes, some business savings accounts are structured to allow access to a certain number of employees. Understand however that you are still responsible for the account.

• Is my business savings safe?

  Yes, deposits in a business savings account of up to $250,000 are secured by the Australian Government in the same way that a personal savings account is.

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To make sure you get accurate and helpful information, this guide has been reviewed by Justine Mclean, a member of Finder's Editorial Review Board.

Written by

Alison Banney

Editorial Manager, Money

Alison is an editor at Finder and a personal finance journalist with over 10 years of experience, having contributed to major financial institutions and publications such as Westpac, Money Magazine, and Yahoo Finance. She is frequently quoted in media outlets like SmartCompany and SBS, offering expert insights on superannuation and money management. Alison holds a Bachelor of Communications in Public Relations and Journalism from the University of Newcastle, and has earned three ASIC RG146 certifications in superannuation, securities and managed investments and general financial advice, ensuring her expertise is fully aligned with ASIC standards. See full bio

Alison's expertise

Alison has written 637 Finder guides across topics including:

• Superannuation
• Savings accounts, bank accounts and term deposits
• Budgeting and money-saving hacks
• Managing the cost of living