Do I need a business bank account?

Managing payments is an essential part of running a business. While you need an account for this, it doesn't have to be from a traditional bank, as non-bank providers also offer business accounts with valuable features and benefits.

Traditional business bank accounts often come with high fees, slow processing times for international transfers, and limited software integration capabilities.

In contrast, non-bank providers like Airwallex can provide lower fees, fast international transfers, and additional capabilities to streamline and enhance financial management. Exploring alternatives that may better suit your business needs is worth exploring when considering a business account.

Six benefits of using a business bank account 

Opening a business bank account might seem time-consuming initially, but it’s essential to your company’s financial health. Imagine how long it'd take to sort out personal expenses from business transactions when you could focus on serving your customers instead.

Here are some other benefits of using a business account:

1. Track your tax obligations 

Organized bookkeeping makes a big difference at tax time by making it easier for you and your accountant to collect financial information. Airwallex’s Business Accounts can be linked to Xero, Quickbooks, and Netsuite to automate this process further. Consult your accountant for more details on potential tax implications.

2. Track performance

Keeping an eye on cash flow is vital for any business. A business bank account makes tracking, monitoring, and managing your income and expenses easier. With regular reviews, you can make quick adjustments to your business that help keep you on track with your targets.

A business account also provides a dedicated space for all your business transactions and keeps them separate from your personal expenses. This simplifies your bookkeeping and makes tax preparation more straightforward, as you'll have clear records of business-related expenditures.

3. Access to financial services for your business

Business accounts come with tools and services to support your company’s growth. If you’re just getting started, you can open a business account first, then use these financial services as the need arises:

• Multi-currency accounts. Expanding internationally or working with overseas suppliers is increasingly common for US businesses. Whether you’re paying vendors in Europe or receiving payments from customers in Asia, a multi-currency account can help you avoid costly conversion fees and streamline your global operations.

• Corporate cards. Empower your employees to handle business travel bookings, marketing spend, and other expenses with a corporate virtual or physical card. You can even benefit from savings with cards like the Airwallex Borderless Card, which offers up to 1.5% cashback on eligible transactions.

4. Accept online payments

A business account can streamline how your company accepts payments. When you make it easy for customers to pay, they’re more likely to complete their purchase or settle their invoice. Airwallex offers multiple ways to streamline this process:

• Embed Payment Links into invoices, emails, or social media for quick payments.

• Boost conversions with the low-code Checkout solution, supporting multiple payment methods and currencies while lowering fees.

• Integrate with platforms like Shopify, Magento, or WooCommerce, or use the Payments API for a fully customizable global payment experience.

5. Simplified payroll and bill payments

Many business accounts offer payroll services that simplify employee payments. Business accounts simplify payroll by ensuring timely employee payments and managing Central Provident Fund (CPF) contributions accurately. Airwallex’s business account also has a Bill Pay feature that automates payments to vendors worldwide.

6. Access to business loans

Having a dedicated business account can make applying for business loans or lines of credit easier. If you already have a banking relationship with them, the bank can quickly assess your creditworthiness and speed up the loan approval process.

How to choose the right business bank account

With options from local banks, neobanks, and fintech providers, finding the right one for your business can feel overwhelming. Ask yourself these questions to narrow down your options:

What are your specific needs?

Start your search by thinking about your business’s short-term needs and long-term goals. Ideally, your bank account will accommodate your business as it grows and evolves. Here are some items to consider:

• Transaction type and volume. If your business deals with cash, you may need a bank with nearby branches to make deposits. Mobile apps and a reliable online banking system might be more important if you operate mostly online.

• Global payments. Trading across borders requires additional services to help you manage international transfers, foreign exchange rates, and payment workflows.

• Company cards and expense management. A business account with debit or credit cards for different employees simplifies expense management and reduces the need for reimbursements. You also get detailed transaction records and better control of business-related spending.

• Access to loans. If you think you’ll want credit or a loan for your business in the future, you’ll need to provide evidence of your business financials and cash. A dedicated business bank account can help build that evidence and a credit rating separate from your personal profile.

• Customer support. Customer support from your bank can impact the service you provide to your customers. Access to a 24/7, responsive service can help you quickly address any issues and minimize the customer impact.

Identify the types of transactions and services you need and use this as your key criteria when comparing business bank accounts.

What fees are involved?

Business bank accounts can come with various fees depending on the bank. For example, many traditional banks like Wells Fargo or Bank of America charge monthly service fees if your account balance drops below a certain amount. On top of that, you may encounter fees for overdrafts, early account closures, and other services. Fintech firms like Airwallex, however, often offer zero fees, providing a cost-effective alternative for modern businesses.

How easy is it to use?

While fees and features are necessary considerations, service and convenience are also important, as they can impact your bottom line and the customer experience. Things to look out for include:

• Customer service via a channel and times that suit you

• Mobile app navigation and features

• Software integration capability

• Speed of international transfers

• Access to reporting

• Ability to support multiple users or entities

• Capacity to hold multiple currencies

Bonus tip: Talk to other business owners and read reviews online. Seeing what others like you think and learning about their experiences can help you make an informed decision.

What are the alternatives to a traditional business bank account?

The growth of non-bank financial services providers such as challenger banks and fintechs has opened up new business possibilities beyond traditional bank accounts. As new, fast-moving, they've been able to make products and services that meet the needs of businesses operating in an increasingly online and global environment. 

Digital business bank accounts

The US has many digital-only banks offering businesses a fully online banking experience. These banks provide core features such as business accounts for sending and receiving payments and streamlining financial operations.

Unlike traditional banks, digital banks work online without physical branches. Examples of digital banks in the US include Novo and Mercury.

End-to-end business accounts

Fintech payment specialists like Airwallex offer an all-in-one Business Account that helps businesses operate internationally. Although not a bank, Airwallex is registered in the US as a Money Service Business (MSB) with FinCEN (Financial Crimes Enforcement Network). This allows us to offer a fully integrated financial solution, providing services such as international transfers, currency exchange, multi-currency accounts, and corporate cards.

Benefits of using Airwallex Business Accounts

If your business needs an efficient, cost-effective alternative to traditional banks, look no further than the Airwallex Business Account. This all-in-one account has everything you need to run your company in the US and beyond: 

• 23+ multi-currency accounts. Open multi-currency Global Accounts in minutes and accept 23+ currencies from over 60 countries.

• International payments to 150 countries. 90% of Airwallex’s international transfers go through local payment rails instead of SWIFT. This means low transaction fees and faster transfer times, with 85% of funds arriving the same day.

• Market-leading exchange rates. Trade 60+ currencies at interbank rates and save up to 80% on foreign exchange fees.

• Unlimited corporate cards. Issue virtual and physical Borderless Cards with 1% unlimited cashback. These multi-currency debit cards are powered by VISA and allow you to purchase from currencies held in your Airwallex account.

• Expense management. Our built-in expense management tool gives you full control and visibility over company card spend.

• Accept payments worldwide. Accept payments from customers in 180+ countries and regions through various payment methods, including popular local options.

Here are some great reasons to use fintech firms like Airwallex instead of a traditional bank:

• No account opening fees or admin fees. Corporate bank accounts often come with account opening fees, fall-below charges, or monthly fees. In contrast, an Airwallex Business Account is free to open and has no minimum balance. There are no admin fees either — you only pay for the services you use.

• Centralized systems for all operations. Fintech firms offer a single platform that lets you manage all your financial operations in one place. This centralization simplifies managing payments, expenses, and other financial activities, reducing the complexity and time spent on administrative tasks.

• Flexibility to support growth. Fintech business accounts include flexible, scalable features designed to adapt to your business’s changing needs. Services like multi-currency accounts help small businesses expand overseas, while embedded finance generates additional revenue streams for large enterprises.

• Tech-first systems. Airwallex leverages advanced technology to create a user-friendly and efficient platform. This technology-driven approach supports seamless integration with other tools and creates a smooth, intuitive experience for managing your finances.

• Constantly evolving features. At Airwallex, we continually update features to align with our customers' business needs. This means you’ll have access to the latest tools and services, helping you stay competitive and efficient.

Meet the New York-based swag company that simplified global payments and vendor relationships with Airwallex

Gimme Swag creates custom, one-of-a-kind branded collectibles, helping content creators and game companies engage more deeply with their audiences. Gimme Swag handles everything from design and production to fulfillment and customer service — allowing creators to focus entirely on their craft. However, as the company expanded into new markets, CEO Daven Johnson quickly identified a key issue: Gimme Swag needed a centralized platform to manage customer payments and payouts to international vendors in their preferred currencies.

Before Airwallex, Gimme Swag used PayPal and other payment partners, but reconciling currency conversions and dealing with hidden fees became an operational headache. "When we were handling payments through multiple partners, we faced challenges like inaccurate conversions and higher transaction costs,” says Daven. “We realized we needed a better solution.”

"With Airwallex, we can accept payments from customers in 180+ countries and pay our international vendors within 24 hours — sometimes even faster," Daven explains. "Plus, we have access to 160+ local payment methods, simplifying managing global transactions."

Airwallex has helped Gimme Swag streamline its payments and strengthen vendor relationships by offering cost-efficient payouts with no hidden fees. Now, Gimme Swag can scale easily, providing customers and partners with a seamless experience while expanding their global reach.

Making the right choice

All businesses need a separate business account to clearly see your business’s revenue, expenses, and cash flow. This also makes it easier to submit your corporate income taxes.

Choosing the right business account is an important decision for your organization. It can help you save money, improve customer experience, and simplify financial operations. Take your time to consider your needs, compare options, and make an informed decision. The right choice will support your business growth and make managing your finances easier.

US businesses like Gimme Swag are thriving with Airwallex today. Open a free account and let Airwallex handle your payments so you can focus on growing your business.

FAQs about Business Accounts

1. I’m a sole proprietor. Do I need a business account?

You’re not legally required to have a business bank account if you’re operating as a sole proprietor. However, separating your business and personal finances can help with better financial management and simplified tax reporting while providing a solid foundation to support future business growth.

2. How much money should I put in my business account?

This depends on the nature of your business and the account’s minimum balance requirements. Ideally, you'd have enough cash to cover short-term expenses and any unexpected costs. To free up your cash, consider using an account with no minimum balance or fall-below fees, like Airwallex’s all-in-one Business Account.

3. Will I get taxed more if I use a business account?

The type of bank account you use does not directly influence how much tax you pay. However, clear financial records can help you and/your accountant better manage your tax obligations.