6 Best Bank Accounts for Self-employed Professionals in 2022

2. NBKC Business Account

NBKC stands for “National Bank of Kansas City,” so it may surprise you to find them on a list of self-employed bank accounts intended for a much larger audience. However, NBKC has a massive online presence, and anyone can open a business account with them.

Benefits:

Unlimited Transactions

NBKC has no limitations on daily or monthly transactions, so you can withdraw, deposit or transfer as much money as you need to in order to get things done.

Multi-User Support

Unlike some of the less-traditional self-employed bank account options on this list, NBKC business accounts are set up to handle more than just a sole proprietor.

If you have a partner, hire contractors or even bring on a full-time employee or two, you can order additional credit cards for the business account. That way you can delegate the shopping.

Competitive Interest Rates

Every review of NBKC mentions their strong interest rate as a perk, and with good reason.

According to the Federal Deposit Insurance Corporation (FDIC), the average interest rate for a money market savings account is .09%. NBKC, on the other hand, offers .60% on their money market accounts. That kind of difference really matters over time!

Autobooks Integration ($10/month)

For an added fee, NBKC offers integration with Autobooks on their self-employed bank accounts.

Autobooks is a financial tracking system that hits the sweet spot between consumer and corporate features, giving small businesses (or freelancers) the control they need without too much complexity.

This add-on allows your self-employed bank account to become so much more. You can manage cash flow, send invoices with online payment capabilities, pay bills, automate your bookkeeping and run reports.

Fees:

NBKC has no annual or monthly fees. Your account is free forever. Some add-on services do require a fee. For example, credit cards, while free for the first year, incur a $95 fee after the introductory period.

Cons:

  • Physical locations are in Kansas City only.
  • No integration with third-party software other than Autobooks.
  • A combined checking/savings account makes it difficult to set aside money for specific purposes.
  • No tax tools.
  • Commercial loans are only available to Kansas City Metro residents.

The Best Business Bank Accounts for Self Employed

If you are self employed, including working as an independent contractor, finding the best business checking account will be different than it will be for a larger small business with employees. Here are some options to consider. 

Axos Basic Business Checking

Axos Bank designed its Basic Business Checking account with small business owners in mind and as a result, it’s often featured on lists of best business checking accounts. You can open your account 100% online and enjoy unlimited domestic ATM fee reimbursements, no monthly maintenance fees, and no minimum balance requirements. Earn a $100 bonus when you open a Basic Business Checking account—just maintain a minimum average balance of $5,000 for at least 90 days after account opening. 

Small Business Checking by Bank of America

Bank of America offers banking solutions to help grow your small business. Take advantage of accounts designed to fit a variety of needs.

Chase Business Complete Banking℠

There are a variety of reasons to consider Chase for your small business banking needs: 

  • Built-in card acceptance.You can also accept card payments anytime, anywhere in the U.S., and get transparent pricing with Chase QuickAcceptSM
  • Same-day deposits with QuickAcceptSM. Free up the cash you need to keep your business moving forward with same-day deposits at no additional cost. 
  • Alerts to help you stay on top of your account activity. Easy account management through Chase Business online and the Chase Mobile® app. Unlimited electronic deposits, ACH and Chase Quick DepositSM. Convenient access to 16,000 ATMs and more than 4,700 branches.

Online & Mobile Small Business Checking by Bank Novo  

Novo offers powerfully simple business banking through their free checking account with debit card access, no hidden fees and zero minimum balance requirements. Novo allows you to integrate with the business tools you already use, like Xero and TransferWise, and empowers you with a dashboard to see the financial health of your business at a glance. You can apply for an account in under 10 minutes on any device so you can start managing your business finances all in one place and on the go.

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Prepare for Taxes

Seasoned self-employed business owners know the importance of keeping up with their tax responsibilities.

When you’re earning a W-2 income, the taxes are withheld and sent directly to the IRS for you. When you’re self-employed, you must set aside a significant portion of your income to avoid being hit with a major tax bill. Maintaining a bank dedicated to taxes can simplify the process.

In addition, you’ll need to plan for any sales taxes, employee taxes, and state and/or local taxes you and your business might owe. You can plan for your estimated taxes based on the income and expenses you’re seeing in your dedicated business bank account. Setting aside 30% to 35% of your earned income is a good rule of thumb, and using a separate bank account to do that can keep all your funds and expenses organized.

There are unique situations for self-employed individuals, such as being able to deduct the employer portion of the Social Security tax from your self-employed tax. A tax professional can help you take advantage of tax-reduction opportunities.

Finance statistics and extra resources

These days, most banks provide their customers witThese days, most banks provide their customers with detailed statistics on where they’re making money and breakdowns of their expenses. With a business bank account, the data and resources your bank provides you with will be even better. So not only will you be able to monitor profit in different areas and see which expenses you need to cut down on, but you’ll also be provided with invoicing tools and accounting software. Another extremely useful function gives you the opportunity to sub-divide your account to put money aside where it’s needed, for instance, to have a certain income stream allocated to paying your wage bill.

These are features you simply will not have if using a personal account. So, if you have a larger wage bill or your business finances have a larger number of moving components, then a business bank account may be a solution for you.

Self-Employed Retirement Accounts

Working for yourself also means you are responsible for your own retirement fund. Although managing another account may be the last thing you want to do, setting up a 401(k) or an IRA will ensure you receive tax advantages for retirement savings.

If you are a self-employed individual with no employees, you can set up a solo 401(k), which has the same rules, contribution limits, and tax benefits as any other 401(k). You may also consider a traditional or Roth IRA.

Tax Advantages

It doesn’t matter if your business is run out of a home office, strictly Web-based, or is a “brick and mortar” location, a separate business account has its advantages. Regardless of whether you set up an LLC, Corporation or Partnership, maintaining a business bank account will help you avoid unnecessary hassles.

For example, using a separate business account makes it much easier come tax time, as you will need to file your business income and expenses separately from your personal transactions. Differentiating personal expenses from business expenses when they are in the same account can be time consuming and cumbersome.

Bryan Greenwood from Washington Mutual Small Business Banking notes, “Keeping separate accounts (business and personal) is always the smart thing to do. Many business owners are so busy starting, running and growing their businesses, it is always better to develop good business habits early, especially when it comes to finances and record keeping.”

In addition, the IRS has stringent rules for those who work from home about what can be deducted as “business expenses.” If you use your personal account, the IRS may frown upon those deductions, even if they are legitimate business expenses.

6. BlueVine

Founded in 2013, and with a strong focus on small businesses, BlueVine is a self-employed bank account that you might not have heard about. However, that doesn’t mean you shouldn’t put them on your list to check out for your banking needs.

Benefits:

High-Interest Rate

A self-employed bank account should work for you. BlueVine offers a .06% rate of return on up to $100,000 in your business checking account.

Scheduled Payments

You can set up automatic payments for anyone. BlueVine will directly transfer the money from your account, or you can opt for a credit card, check or wire transfer as needed.

BlueVine even lets you schedule recurring payments, so you set up monthly transfers to your vendors once and then never worry about it again.

Small Business Loans

While Blue Vine loans are higher than the market interest rate, the qualification process is relatively straightforward, and access to these loans may be a vital piece for some startups.

Overdraft Protection

BlueVine does not charge fees for insufficient funds in your account.

However, if you have multiple overdraws within a 30-day period, your line of credit could be affected.

Fees:

No monthly or transactional fees. Cash deposits at Green Dot® retail locations cost $4.95, bill pay credit card transactions to cost 2.9% of the translation total, outgoing wires are $15, out of network ATMs will cost you $2.50, and expedited debit card replacement incurs a small fee as well.

Cons:

  • No service for business loans in North Dakota, South Dakota or Vermont.
  • No joint accounts
  • Out-of-network ATM fee

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How we measure up

It’s great to have options, so we’ve compared the sole trader and business accounts from a variety of high street banks and challengers so you can see how we stack up.

Processing Credit Cards

With the ability to shop on-line and run in and out of a store in the blink of a Visa swipe, business owners are realizing that customers hardly ever carry cash anymore. So what happens when a potential customer comes into your small business with only a MasterCard, but you only take cash? What if a customer searches for companies on-line with your specific product, but doesn’t find you because you lack a Web site with on-line shopping? This is where a reputable Merchant Account Service is key.

A merchant account is a credit card business service set up by a financial institution, allowing businesses to accept credit cards as payment for goods or services. These companies process funds from respective credit card companies and then transfer the collected funds into the business’s checking account.

There are two types of merchant accounts: traditional merchant accounts and on-line merchant accounts. Traditional merchant accounts authorize and transmit credit card payments using a credit card machine (swipe terminal), which is installed at the business. Online merchant accounts accept, authorize and process credit card transactions securely over the Internet.

Like any type of business partnership, merchant account providers should be researched thoroughly. The best way to find a suitable merchant account is to shop around and compare merchant accounting service companies, as many of them may try to take advantage of unknowing business owners with hidden fees, such as chargeback, pass through, minimum or termination fees.

Be sure to read any contractual agreement extensively before signing on the dotted line, as some contracts may carry a non-cancellation clause. Be sure to read any contractual agreement extensively before signing on the dotted line, as some contracts may carry a non-cancellation clause.

2. Monzo Business

If you need simplified business banking, Monzo Business is what you should be looking at. This fully regulated bank enables you to open an account from your phone and allows for easy and free transfers within UK banks.

Although the Lite account doesn’t have any charges, it would make sense to opt for a Pro account. With it, you would be able to integrate any accounting software for small businesses that you might use.

What are the differences between a personal checking account and a business checking account?

While personal checking accounts are generally free, there are few free business checking accounts. Instead, business accounts can carry higher fees and expenses due to the increased level of activity. However, business checking accounts typically enjoy increased benefits to better accommodate your company’s higher volume. 

How to choose the best bank account for your needs

First, check with your bank if you definitely need a separate account, based on your specific circumstances. If you have very few transactions and your personal finance covers everything then you might not need to change or feel it’s worthwhile. If your bank tells you that you need another account, try to negotiate the rates with them (fixed term, the rate loan, account fee, etc) – don’t assume that they have to give you what’s written down. And don’t feel that you have to open one with the same bank that you have your personal banking with – shop around for the account that suits you best in terms of features, savings offers, fixed rates, and look for a good introductory offer.

5. Revolut Business

Are you a freelancer or sole trader who works with overseas clients or customers? If so, Revolut Business should top your list of potential business bank accounts. With a local GBP and EUR account, it lets you accept payments from other currencies. With an IBAN code, you’ll be able to receive transactions across 25 currencies.

In other words, you can keep your payments in any of these currencies separately in your Revolut account and avoid exchange rates.

Why A Self-employed Business Account Makes Sense

It’s common for self-employed business owners and freelancers to use personal bank accounts for business, but a business bank account is a better option. Business bank accounts separate your business finances from your personal finances, making accounting easier and potentially limiting the risk of being flagged by the IRS for an audit. If your business grows and a loan becomes necessary to fund further expansion, having your business and personal monies separated will help lenders make a better determination of the viability of your business.

The best bank accounts if you have a poor credit history

Business bank accounts will require you to have a credit check so if you have a poor credit history you might want to try and keep your transactions in your personal account (if your bank agrees) or you might find it easier to get an account with the bank you already use for personal banking. These bank accounts are best if you have a poor credit history:

Award-winning banking

  • Instant payment alerts. Client payment? Networking lunch? Get real-time alerts as soon as money enters or leaves your account.

  • Capture receipts. Buried in receipts? There’s an easier way. Stay organised by capturing them in-app as you go.

  • Automate your expenses. We’ll automatically put your expenses into business categories to simplify your self-assessment tax return.

  • Connect to business tools. Link your account to other services, such as accounting software or insurance, through our Marketplace. Use Xero, QuickBooks or FreeAgent? No problem, connect for free.

  • Space to separate overheads. Business trips. Tax. A new laptop. Whatever’s coming up, keep it to one side in Saving Spaces.

  • Cash and cheque deposits. Deposit cash easily at your local Post Office, and deposit cheques of £500 or less via the Starling app. When we said you wouldn’t miss branches, we meant it.

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