BUSINESS FINANCE
Business Line of Credit Options Up to $2m
By Shaun McGowan
How to pick the best business savings account
To find the best business savings account in Australia, it’s important to weigh up some key factors. Here’s what you’ll need to consider:
- Interest rate (base vs bonus): Compare both the base rate (paid regardless of conditions) and any bonus rate (which usually requires meeting certain conditions like minimum deposits or no withdrawals). If there’s an introductory bonus, check how long it lasts and what rate applies afterward.
- Account conditions: Some accounts require minimum monthly deposits, specific balance thresholds, or restrictions on withdrawals in order to qualify for the highest interest rate. It's important to ensure these conditions align with how your business manages its cash flow.
- Linked account requirements: As with regular savings accounts, with some options you’ll need to have a linked business transaction account with the same provider. This requirement could ultimately influence your decision – whether to stay with your current provider or move your business banking elsewhere.
- Fees and charges: Look for no or low account-keeping fees, and check for transaction fees or penalties for not meeting monthly criteria. Also check if there are fees for transferring to or from external accounts.
- Access and flexibility: Can you access funds easily online or through a mobile app? Are there any restrictions on withdrawing or transferring money when you need it? For example, look at the daily transaction limits and how easy it is to change them if needed.
- Government guarantee: Check that the account is with an ADI (authorised deposit-taking institution) so that your deposits (up to $250,000 per account holder, per provider) are protected under the Financial Claims Scheme.
- Business suitability: Consider whether the account is designed for your business type (e.g. sole trader vs company, or whether it supports multiple signatories or higher balances).
- Extra benefits: Some banks offer exclusive discounts or integrations with popular business tools like Xero, MYOB or QuickBooks. Other perks might include access to business support services, educational resources or discounted merchant services.
Balance savings returns with ease of use
Glenn Price, Director of Price Buyers Agents
“I was looking for a savings account that offered real value without complicating our cash flow. I didn’t want to deal with hoops like minimum deposits every month or lose flexibility just to earn interest. What stood out to me was the combination of a decent return on balances over $10,000, no monthly fees, and the ability to move money freely when needed. The business savings account I chose gives me peace of mind knowing our surplus funds are working for us without being locked away.”
Glenn Price, Director of Price Buyers Agents
How do high interest business savings accounts work?
High interest business savings accounts allow you to earn a return on your idle business funds by paying interest on your balance. These accounts are designed to help businesses grow their savings while keeping funds relatively accessible. But getting the top rate isn’t always as simple as parking your money and waiting for it to grow, as many accounts have conditions attached.
Base interest rate
This is the default variable rate you’ll earn on your balance, regardless of how the account is used. It tends to be lower than the advertised “headline” rate and may vary depending on your balance. Some banks offer higher rates up to a certain limit (e.g. $500,000), while others offer better rates for larger balances.
Tiered interest
In a tiered system, different interest rates apply to different portions of your balance. For example, you might earn 1.00% p.a. on the first $25,000, 2.00% p.a. on the next $225,000, and 2.50% p.a. on any amount above $250,000. This structure can reward higher balances, but the average return may still be lower than a flat-rate account, depending on your overall balance.
Intro (honeymoon) interest rate
Some accounts come with a boosted interest rate (usually fixed) for a limited time – often the first three to six months after opening the account. These intro rates can look attractive but always check what the rate reverts to once the honeymoon period ends.
Bonus interest rate
Many business savings accounts offer a higher variable rate if you meet certain monthly conditions. The bonus rate typically makes up the majority of the total return (but isn’t always the case), so it’s worth checking the fine print. Bonus interest is usually what makes savings account rates higher than even the best term deposit rates.
Other business savings account considerations
Tax implications
Your business must declare any interest earned as income to the ATO each financial year. This interest is taxable, just like with a personal savings account.
Employee access
Some business savings accounts allow you to add multiple users with different permission levels. This makes it easier to manage finances across teams or departments while maintaining control over who can view or move funds.
Online security
Business accounts often come with advanced security features such as multi-factor authentication, daily transaction limits and fraud protection. These tools help protect your money and reduce the risk of unauthorised access.
Account support
Consider the level and type of customer support available. Check whether the bank offers help online, over the phone, or in-branch. Reliable support is essential if you need to resolve issues quickly and avoid disruptions.
Transaction limits
Be aware of any daily or monthly limits for transactions such as BPAY, PayID and PayTo. These limits may vary between banks and could affect how you move or access funds when needed.
Pros and cons of a business savings account
Pros
- Your business savings earn a return instead of sitting idle in a transaction account (though some business transaction accounts also earn some interest).
- Helps manage cash flow by keeping savings separate from regular business expenses.
- Many business savings accounts come with no monthly fees, helping you save more.
- You can usually transfer money in and out when needed without penalties (unlike a business term deposit).
- Deposits up to $250,000 (per account holder, per provider) with an ADI are protected by the Federal Government.
Cons
- Some accounts offer low or no base rates, so you must meet the lender’s conditions to earn interest.
- Bonus rates and conditions can change at any time, which may reduce your returns.
- You may need to open or maintain a transaction account with the same lender.
- These accounts may not suit businesses with tight cash flow or low savings.
Which bank is best for a business savings account?
There’s no one-size-fits-all answer. Dozens of reputable banks, credit unions and online providers in Australia offer business savings accounts, and the “best” option depends entirely on your business needs.
For example, a larger business might benefit from a provider that offers advanced features, dedicated support and integration with accounting software. On the other hand, a smaller business may prefer a straightforward savings account with a competitive interest rate, no account-keeping fees and flexible access to funds.
To find the right fit, compare interest rates, fees, access options, and any conditions for earning bonus interest. The best account is generally the one that aligns with your cash flow, savings goals, and how you manage your business finances day to day.
How to apply for a business savings account
To open a business savings account, most banks require you to have a business transaction account with them first. Once that’s set up, you’ll generally need to meet the following criteria:
- Be at least 18 years old
- Have an Australian-registered business
- Be the business owner, director or authorised signatory
- Provide at least two forms of identification (e.g. driver’s licence or passport)
- Provide your ABN or ACN
Once you have your documentation ready, you can usually apply online by:
- Entering your personal details
- Providing your business information
- Completing and submitting the application
Most applications take just a few minutes to complete, especially if you're an existing customer. However, not all business types can apply online.
Many banks restrict online applications to simpler structures, such as sole traders, Australian companies or unregulated trusts. If your business has a more complex setup, such as a regulated trust or partnership, you may need to apply in-branch or by phone.
