Sole Trader Bank Account: Open One In Under 10 Minutes!

Most bank accounts aren't designed for sole traders -- which is why, as a sole trader, you've likely been faced with these issues:

• It can take days if not weeks to get a bank account set up
• Banking fees aren't always clear, so you don't really know how much you're paying
• Processes aren't very flexible, which means more admin and work for you
• You often need to use 3+ tools to help with invoices, accounting, taxes and a lot more

In this article, we'll be walking you through how to set up a business sole trader bank account that solves those issues and gets you set up with the right sole trader bank account in Australia.

‍Looking to open a sole trader business account right away? You can open one with Parpera in under 10 minutes. Download our app and sign up to our 30 day free trial now!

Want to find out the exact steps you’ll need to go through in order to open a sole trader bank account? Keep reading!

1. How to set up a business sole trader bank account
2. What do you need to set up a sole trader bank account?
3. Does a sole trader need a separate account?
4. Can a sole trader use personal bank account for business?
5. Should you get a transaction or savings account?
6. What do you need to open a sole trader bank account?
7. What else do you get with Parpera?

‍How to set up a business sole trader bank account:

As a sole trader, you have two main options when it comes to opening a sole trader business account:

1. Create an account with a money management app like Parpera
2. Create an account with one of the Big Four Australian banks

Let’s look at each option in more detail:

Create an account with Parpera

The main benefits of opening an account with a money management app is that it’s specifically built for sole traders’ and small business owners’ business needs.

There is currently only one sole trader and small business specific business account and it’s Parpera. Parpera works with Wise, to set up and open a business account online with us in under 10 minutes.

Here’s how to get started:

1. Download the Parpera app

Start by downloading the Parpera app for free. It’s available for both iOS and Android. Download the app here.

Once you’ve downloaded the app, you’ll see a welcome screen. This is the four step process you’ll go through to open a business account as a sole trader (it takes less than 10 minutes!).

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2. Sign up and verify

The next step after downloading the app is signing up to Parpera and verifying some of your details.

You’ll be asked to include your name and mobile number, and verify your phone number with an SMS. You’ll also add your email address, and then be able to create your Parpera passcode (as well as enable biometrics).

3. Set up business profile

Now comes the fun part: setting up your business profile!

Have your ABN ready, as you’ll need to enter it at this stage. Don’t have one? You can register one for free with Parpera. You don’t have to be registered for GST to open an account with us.

‍Register your ABN with Parpera‍

Once that’s confirmed, you’ll be asked to enter your business activity.

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4. Verify your identity

We’re nearly done! Now to open up a Parpera business account we just need to verify your identity.

You’ll need to enter your ID number (either from your driver’s license or passport).Then you’ll just need to enter your date of birth, some details about your residential address and whether you’re an Australian tax resident. You can also choose to add your Tax File Number (TFN), but that’s totally optional.

Once you confirm your details and agree to the key terms, we’ll be able to verify your details. It usually takes less than a minute, but it can sometimes take up to 24 hours.

5. Access account

Congratulations! You now have a Parpera account.

You’ll be able to claim your Parpera ID, which you’ll soon be able to add to invoices and so clients can pay you directly via card.

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You’ll also get your account name, BSB and account number. These are super easy to copy and paste and add to invoices or share with your clients to get paid.

We encourage you to play around with your account: you can add a profile picture, set up categories, etc. You’ll be able to pay for items online with your virtual Parpera debit card.

Here’s a video walkthrough of the process: Parpera | How To Set Up Your Account

Create an account with a Big Four Bank 

You can also choose to open an account with one of the Big Four banks in Australia.

Here are the main features of each one:

ANZ Business Essentials account²

Features:

• $0 monthly services fee
• Instant payments
• Desktop and app
• Accounting integrations with Xero and MYOB
• Free business debit card
• No invoicing
• No categorization, reporting and tax insights
• Opening an account requires an in-person visit
• 3% international transaction fee 
• 0.1 - 0.5% conversion fee markup 
• 20 free ANZ transactions per month, including withdrawals 
• Fees apply to transactions made in branch

Good for: someone who is doing fewer than 20 transactions per month, has a personal ANZ bank account and doesn’t complete too many international transactions.

Commonwealth Bank Business transaction account⁴

Features:

• No monthly account fee
• Customised notifications
• Unlimited electronic transactions
• Integrated with accounting options
• Can pair with a savings account
• Another option with monthly fee and 20 free assisted transactions
• Desktop and app
• 10 free assisted transactions (i.e. in branch) 
• No business expense categorization 
• 3% overseas transaction fee 
• $2k daily ATM withdrawal limit 
• Over the counter deposits and withdrawals come with a $3 fee

Good for: self employed who operate mostly online transfers, don’t plan on doing business overseas and have a personal Commonwealth bank account.

NAB Business everyday bank account⁵

Features:

• $0 account fee 
• Unlimited electronic transactions
• There is a $10 per month option if you’re doing many, in-person transactions
• Desktop and app
• In person verification
• No invoicing
• No business expense categorisation
• $2.5 fee for in-branch withdrawals
• $4 for overseas transactions
• 3% foreign exchange commission

Good for: sole traders who want to bank with a big bank, only use electronic transactions and don’t plan on doing any business overseas.

Airwallex business account⁷

Features:

• Not a bank
• No monthly fee
• Free bank transfers
• Favourable exchange rates (0.5 - 1% markup on the market exchange rate)
• Integration with accounting software such as Xero and MYOB
• Desktop and app version
• Deposits are not protected under the financial claims scheme
• No invoicing
• No business expense categorization
• Debit card does not work at ATMs

Good for: businesses that do regular international transactions and already have a set up with invoicing software like Xero or MYOB.

What do you need to set up a sole trader bank account?

Before you even start searching for bank accounts, there are a few questions worth asking yourself:

1. Does a sole trader need a separate account?

Strictly speaking, no, you don’t need a separate bank account and business credit card if you’re a sole trader. You do need one if you’re setting up a small business through a proprietary limited company or partnership.

However, it’s a good idea to get one as a sole trader because it helps separate your personal and new business transactions. That means it’s a lot easier to manage business finances and do your taxes when the financial year ends.

2. Can a sole trader use a personal bank account for business?

Technically, yes. You can use your personal bank account for business.

However, things might get difficult to track once you start having business expenses. Once things get complicated, it’s best to get a sole trader bank account to help you manage expenses, invoices and to help you complete your tax return.

3. Should you get a transaction or savings account?

In your personal bank account, you might have a transaction account and a savings account, where you keep long-term savings.

But if you’re setting up a business account, you don’t really need a savings account. Your money is working capital, which means you’ll be regularly receiving and sending money out, so it’s not really worth opening a savings account.

4. What do you need to open a sole trader bank account?

Once you’re ready to open a sole trader bank account, you’ll just need your Sole Trader Australian Business Number (ABN) and an ID (Driver Licence or Passport).

If you’re opening a bank account online or in-app, you’ll just need your phone and internet. If you want to open one physically at a traditional bank branch, be sure to make an appointment!

‍Don’t have an ABN? You can register one with Parpera!

What else do you get with Parpera?

What else can you do with your Parpera account? Here are a few things:

Categorise your expenses

The problem with using a traditional bank account is that you’ll just see your daily transactions, without being able to classify or group them in any way. What if you could immediately see what your cash flow and business expenses are at a glance?

With Parpera, you can view your transactions through specific categories and merchants. You can also add more details to each transaction, such as adding an invoice or receipt, flagging it as tax deductible or asking it to automatically calculate GST, making it a lot easier for bookkeeping.

You’ll also be able to set aside money in a separate Tax Saver account to save for income tax.

This makes it a lot easier to filter through expenses and see your transactions at the end of the month and the financial year!

Pay $15 or $35 per month — and no other fees

Some banks will charge you withdrawal fees, international fees, currency fees, monthly “account-keeping” fees, and a lot more. At Parpera, we strive to be as fair and transparent as possible with our pricing. That’s why you should expect to pay us between $15 to $35 per month for membership, which includes your business account, plus all of our other features within the App.

You'll also get a Parpera Mastercard Virtual Debit Card. We won’t charge any fees for international card transactions, and we’ll be using a leading international payments partner for international bank transfers.

Easily pay yourself

Parpera provides a digital business account for sole traders and small business owners, which means we know you’ll be sending a lot of money to yourself. 

The good news is we’ve made it very easy to add your personal bank account, so you can easily send over your wages whenever works best for you.

Send invoices that make it easy to get paid

We know invoices can be an absolute pain to manage: which template should you use? Where do you add your payment details? How can you add discounts? Which accounting software should you use? How can you avoid endlessly copy pasting?

At Parpera, we’ve tried to make it as easy as possible for freelancers and small business owners to create invoices and send them to clients. With a few clicks, you’ll be able to send a (nice-looking) invoice with your payment details automatically added. You can pick the client you want to send it to and personalise details as you see fit.

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You may like: How To Create an Invoice in Australia (And Get Paid Faster!)

Once you send the invoice over, you’ll be able to see clearly the difference between paid and unpaid invoices — and when the client does pay, the invoice is automatically reconciled! Forget about copy pasting and manual Xero reconciliations (we're automating that too!).

Set aside the right amount of money for tax

As a sole trader, you want to do your work; you don’t want to worry about boring old admin.

That’s why we’ve made it as easy as possible to allow you to do all tax-related activities from one app. Here are the tools you can use with Parpera:

Ensure you’re setting aside the right amount in taxes: input your estimated income for the year and our tax estimate tool will help you estimate how much tax you should set aside every month to have enough at tax time.

Put your tax savings in a separate pot: every month, you’ll be able to set aside your tax estimate in a tax savings wallet, which means you’ll have enough money when it’s time to file your BAS.

‍Earn interest on your tax savings (coming soon!): what if you could put those tax savings to good use? With Parpera Earn, you’ll be able to earn interest on your tax savings.

Do all your BAS prep from one app: you’ll be able to prepare your BAS directly from the Parpera App, along with instructions on how to lodge it. On the Automate plan, you can choose to lodge your BAS automatically with our trusted accounting partner.

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Ready to open an Australian sole trader business account? With Parpera you just need your phone, ABN, ID card and you’ll have a business account up and running in less than 10 minutes. You can use the account for 30 days for free, no commitment required. Don’t like it? You can cancel your membership with us and close your business account from the settings tab, no questions asked.‍‍