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 bank 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 business sole trader bank 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’ business needs.

There is currently only one sole trader specific bank account and it’s Parpera. Parpera has entered into an arrangement* with Volt Bank where you can set up and open a business bank 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 bank account as a sole trader (it takes less than 10 minutes!).

onboarding parpera app

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 name and your business activity.

parpera app business name
parpera app business activity

You’ll then reach a screen where you’ll set up your membership with Parpera. You’ll see the various details of our different memberships, with the monthly one coming in at $15 per month. You can also choose the cheaper annual option if it suits you better.

The Parpera membership is tax deductible, and you won’t be charged until your 30 day free trial ends.

4. Verify your identity

We’re nearly done! Now to open up a Volt Bank 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.

parpera app identity

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.

parpera id

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.

parpera app details

We encourage you to play around with your account: you can add a profile picture, set up categories, etc. You’ll also receive your physical Parpera card in the mail within 3 - 7 days!

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 account

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 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
  • 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 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
  • 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

  • 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.

expenses parpera app

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 per month — or $135 per year (save 25%)

Some banks will charge you withdrawal fees, international fees, currency fees, account fees, monthly fees and a lot more. At Parpera, we strive to be as transparent as possible with our pricing. That’s why you should expect to pay us just $15 per month for membership, which includes your Volt Bank account, and all other features within the app.

You'll also get a Parpera Mastercard 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 bank account for sole traders, 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.

parpera app pay yourself

Send invoices

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 sole traders 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.

parpera app invoice gif

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!).

Ready to open an Australian sole trader bank account? With Parpera you just need your phone, ABN, ID card and you’ll have a business bank 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 Volt Bank account from the settings tab, no questions asked.

Download Parpera

Sources:

  1. https://www.westpac.com.au/business-banking/bank-accounts/, accessed 3 December, 2021
  2. https://www.finder.com.au/anz-business-essentials-account, accessed 3 December, 2021
  3. https://swoopfunding.com.au/compare-business-current-account/?bank=paytron-global-business-account, accessed 3 December, 2021
  4. https://www.finder.com.au/commonwealth-bank-business-transaction-account, accessed 3 December, 202!
  5. https://www.westpac.com.au/business-banking/bank-accounts/, accessed 3 December, 2021
Published on the
November 26, 2021
Business

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