Bank Accounts for Sole Traders: Which One’s Right For You?

Published as of
December 8, 2021
by
Araminta Robertson

If you’ve done a bit of research, you might have found it difficult to find information about bank accounts for sole traders. That’s because it’s difficult to fully understand the fees associated with most banks, and you won’t really know what to expect until you’ve gone through the whole process of signing up, verifying your account, and depositing money. There also haven't been many platforms in Australia designed specifically for sole traders.

Our aim with this article is to give you enough information on business bank accounts for sole traders to assist you in helping you pick the right one for you.

  1. Parpera features
  2. Parpera pros and cons
  3. ANZ Business Essentials features
  4. Commonwealth Bank features
  5. NAB Business features
  6. Airwallex features

Looking to open an account right away? Open an account with Parpera and sign up for our 30 day free trial!

Parpera: how we offer bank accounts for sole traders

At Parpera, we’re working hard to build the best business money management solutions specifically for sole traders, freelancers, and entrepreneurs. We’ve spoken to, interviewed, and surveyed over 1,000 business owners and set out to build a solution that we believe meets the specific needs of sole traders.

Here are a few things we do differently to other platforms:

Open an account online in under 10 minutes

Most business bank accounts will require going in person to a branch to open a business bank account. Some will only let you open an online account if you already have an existing account with them.

That means that to set up an account you’ll likely need to set up an in-person appointment and will probably have to return to the branch a couple of times if they request further details about your business.

If you want to open a bank account as soon as possible and don’t have the time to go to a branch in-person, then this situation is not ideal.

That’s why Parpera has entered into an arrangement with Volt Bank where you can set up and open a business bank account online in under 10 minutes. You’ll just need your ABN, specified ID and a smart phone with internet connectivity to get started.

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

Categorise your expenses in the app

As a sole trader, it helps to put your expenses into different categories. For example, one for wages, one for business expenses, another for travel, and so on. But with a regular business account, all you’ll normally see are just your daily transactions.

With the Parpera app, you’ll be able to organize your expenses neatly into different categories. So when tax time comes around, it’ll only take a few minutes to sort through it all!

parpera app categories

Set aside money in a separate account

Need to set money aside for GST? With Parpera, you just need to click on a button and we’ll calculate it for you automatically.

parpera app gst

You’ll also be able to make unlimited free transfers to any other bank accounts that you use to manage your personal finances,  making it super easy to pay yourself.

Create and send invoices

We know how important it is to be able to create an invoice easily, quickly, and that looks professional.

With Parpera, you can create an invoice in a few minutes just from the app. Not only can you save client names and generate invoice numbers automatically, but we’ll add your payment details to that invoice automatically and your invoice will actually look nice!

parpera app create invoice

Here's what the invoice will look like on your client's end:

parpera invoice

Pay just $15 per month (or $135 per year - save 25%)

Many banks aren't transparent with their pricing. If you’re doing many transfers per month or withdrawing a lot of cash, you could end up spending a lot of money on transaction fees that you didn’t expect.

With Parpera, you can expect to pay us just $15 per month subscription without incurring additional bank fees on your Volt Bank account. And, with our card issuing partner, RailsPay Pty Ltd (ACN 646 031 558), we’re planning to launch international card payments and international bank transfers very soon, and you can rest assured there’ll be favourable transfer rates.

You can try out the Parpera app for free with our 30 day free trial. Don’t like it? You’ll be able to close your account from the settings menu, no questions asked.

Cons of using Parpera

No physical branches

If going to the bank in person and being able to withdraw cash from a branch is important to you, then Parpera might not be a good fit. We’re 100% digital and we’ll always be — that’s what allows us to offer great member service and, with the help of our partners, build features that work well for the digital world.

Not a bank (but we partner with one)

We understand that some sole traders would prefer to bank with one of the large, established Australian banks.

Parpera partners with Volt Bank to provide you with the bank accounts in the Parpera App, so while we’re not a bank, your deposits (of up to $250,000 per account holder) are still protected by the Financial Claims Scheme -- please refer to the Target Market Determination of the Volt bank account for further details. We’re proud to be one of the first to offer this feature through our App in Australia!

Our new and innovative way of operating is what allows us to be fully digital and offer much faster and better member care (you’ll also be able to propose new features and have a say in our design through our community!)

No desktop feature

At the moment, Parpera operates only via smartphone. That means you’ll be sending invoices, managing expenses from your phone, and not your computer. If this is a dealbreaker, then we understand you would prefer a different option.

Who is Parpera good for? We’re especially good for sole traders who want to get up and running quickly and want a sole trader bank account that will help them separate business and personal expenses.

We understand that Parpera is not for everyone, and that sometimes, other business bank accounts might be a better fit. Here are some other banks that currently offer business accounts for sole traders:

ANZ Business Essentials account

ANZ Business Essentials is an account from the big four banks. Some of their main features are:

Features

  • $0 monthly services fee
  • Instant payments
  • Desktop and app
  • Accounting integrations with Xero and MYOB
  • Free business debit card

Cons

  • 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
  • Only 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 account

Features:

  • No monthly account fee
  • Customized notifications
  • Unlimited electronic transactions
  • Integrated with accounting options
  • Can pair with a savings account
  • Another option with monthly fee and free assisted transactions
  • Desktop and app

Cons

  • 10 free assisted transactions (i.e. in branch)
  • No business expense categorization
  • 3% overseas transaction fee
  • Can be long call wait times
  • $2k daily ATM withdrawal limit
  • Over the counter deposits and withdrawals come with a $3 fee

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

NAB Business everyday bank account

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

Cons

  • 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 account

Features

  • 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

Cons

  • Not a bank
  • Deposits are not protected under the financial claims scheme
  • Takes 1 day to open an account
  • 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.

We hope the information in this article will help you pick a sole trader bank account that fits your needs. Please note that any information contained in this article is general information only and does not take into account your personal circumstances. Before you open any account please ensure that you obtain and read the account terms and conditions  to see if the account is suitable for you.

At Parpera, our goal is to collaborate with the community to build solutions that help sole traders set up, manage and grow their business. We’re fair and transparent with costs, have a big focus on member service and our goal is to help sole traders save time and money with better tools and financial literacy.

You can sign up to Parpera for free through our 30 day free trial. Don’t like it? Close your account whenever you want, no questions asked.

Download Parpera

Please note the information contained in this article is general information only and does not take into account your personal circumstances. Before you open any account please ensure that you obtain and read the account terms and conditions  and Target Market Determination to see if the account is suitable for you.

*Parpera Australia Pty Ltd (Parpera) ABN 47 641 580 743 is an Authorised Representative (1292372) of Volt Bank Limited (Volt) ABN 67 622 375 722, which holds an Australian Financial Services Licence (504782). Volt is the issuer of the bank accounts in Parpera's app and deposits of up to $250,000 per account holder are protected by the Financial Claims Scheme.

The information presented in this article is current as at the date of publishing.

Sources:

Published under
Business

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