Managing and maintaining finances can be a hard challenge for freelancers. And with so many banking solutions available it can be a dull task to determine which one fits your small business.  However, avoiding the problem will lead you nowhere - managing your finances properly is the first step towards growing your business.

I’ve put together a list of the 7 best banks for freelancers and small businesses to help you make an informed decision. By comparing what each bank has to offer, you’ll be able to determine what best suits your freelancing business.

Why Do Freelancers Need a Business Account?

Before you jump into evaluating the best banks for freelancers, let’s just go through the main benefits of having a business account.

Clean and accurate financial management

Staying organized can be challenging once your business starts to grow. When all your finances are on the same account, you can easily lose track of how much money you’re spending. Setting up a business account will help you keep your business expenses separate from your personal finances.

Easier to report finances

Having a business account makes doing your taxes easier. You’ll be able to keep records and track all your business expenses in one place. This will ease the whole process of filing your business taxes as you’ll need to go through all your paychecks to figure out how much you’ve earned. Not filing your taxes correctly may lead to harsh penalties.

More professional and credible business transactions

Freelancing is on the rise. How you present yourself is going to play a vital role in the type of relationships you’re going to build with your customers. Sending a check from your personal account doesn’t make you look credible in front of your clients. On the other hand, having a business account makes you look more professional and shows clients that you’re not new in the freelance world.

🌟 My top pick: Revolut

Revolut is a British company that offers a range of financial services. Revolut is marketed as an alternative to traditional banking that can provide clients with cost-effective and quick transactions. Clients get a prepaid debit card that enables cash machine withdrawals in 150 currencies and they can also transfer money abroad in 30 currencies.

The Revolut app is available for Android and Apple devices and has some interesting features like vaults for budgeting. Revolut offers a crypto-currency exchange through which clients can convert currencies into Bitcoin, Litecoin, XRP, Bitcoin Cash, or Ethereum.

The benefits of using this business account:

  • Clients owning a Revolut business account can receive and exchange money in 30 different currencies.
  • The Revolt Business account provides clients with the option to order several prepaid Mastercard debit cards. Clients can withdraw money at ATMs and pay in shops in the UK and abroad.
  • There’s an option to create virtual bank cards in different currencies for secure online transactions.
  • Revolut’s account manager has the ability to set custom restrictions and block the card.
  • Clients can manage all aspects of their account through the Revolut Business app for phones and tablets.
  • The Revolut Connect options allow users to connect their business account to tools and apps. Clients can connect their account with accounting apps (Xero), communication tools (Slack), and automation tools (Zapier).
  • The Revolut application programming interface (API) allows clients to connect their business accounts with different software and applications. This feature automates cross-border payments and payouts.
  • Revolut paid users have discounts for Business at Google Ads, Slack, and Deliveroo.
  • Clients have no cost for ATM withdrawals up to £200 per month.
  • The app allows clients to create money vaults for savings.
  • Clients can sign up for Revolut’s medical insurance.

The cons of using this business account:

  • Users can’t make bulk payments with the free plan.
  • After the monthly limit is passed clients pay a 2% fee on ATM withdrawals.
  • The customer support center is not available 24/7.

Available for: European Economic Area (EEA), Australia, Canada, Singapore, Switzerland, and the United States.

TransferWise

TransferWise is a banking service launched in 2011. It offers money transfer services and operates solely online. TransferWise aims to ease the cross-border payment sector and bring some competitive foreign exchange fees on the market. In contrast to traditional banking services that usually add a percentage on every exchange rate, TransferWise offers clients a mid-market exchange rate on currency exchange.

Freelancers and small businesses can benefit from TransferWise’s one-off transfers and batch payments. The company has over 6 million customers and boasts to be 6 times cheaper than leading UK high-street banks.

The benefits of using this business account:

  • Freelancers can invoice their currency without fees.
  • Freelancers can receive money without fees from platforms like UpWork and Freelancer.com
  • TransferWise has no minimum transfer size.
  • TransferWise is a transparent banking service with no hidden fees. Their fees for debit and credit cards are clearly explained on their website.
  • The bank has a great speed of transfer which usually takes up to 24 hours.
  • Intuitive and straightforward interface.
  • Transferwise has a high daily transfer limit. Clients can send up to $49,999.
  • Clients can track every transfer through their TransferWise account.
  • You can integrate your account with Xero and use over 40 currencies.
  • TransferWise prevents duplicate transactions.
  • The TransferWise open API can automate invoice payments, payrolls, standing orders, and recurring transfers.
  • Clients get real-time notifications by integrating their bank account with Slack.
  • TransferWise allows the tracking of exchange rates and automates conversions.
  • Clients can add TransferWise as a disbursement option to their website.
  • The TransferWise banking account allows receiving, spending, and sending money in over 40 currencies.

The cons of using this business account:

  • TransferWise banking accounts can’t accept cheques.
  • TransferWise supports only 55 countries, which can limit your reach.
  • It doesn’t offer any FX options.
  • Clients can transfer money only to bank accounts. There’s no option for cash pickups.
  • Only the Borderless account offers recurring transfers.

Available for: UK, countries within the Eurozone, Australia, Canada, Switzerland

N26

N26 is a banking service from Germany launched in 2013. The Berlin-based digital bank account offers a paperless sign-up process for clients that can be done through a smartphone or a computer. N26 is an app-based bank account most suitable for freelancers and small businesses. The bank account can be registered only on a personal name so it won’t suit larger companies.

The benefits of using this business account

  • Freelancers get 0.1% cashback for all the purchases they make while using their N26 Mastercard. All customers are eligible for the 0.1 cashback feature which is activated automatically upon making an account.
  • No transaction fees for making payments online or in-store anywhere in the world.
  • N26 has great notification and categorization features. Customers get a notification through the app every time they receive a transaction. The app automatically categorizes the transactions which are helpful for tracking spendings.
  • Clients can create personal tags that can help them manage their account activity more easily.
  • All N26 accounts have 3D Secure from Mastercard Secure Code. This type of security prevents fraud when making payments online.
  • Customers get free ATM withdrawals in euros for free.
  • The N26 Black account offers free ATM withdrawals for free worldwide.
  • The N26 Black account comes with an insurance service that protects clients while traveling.
  • N26 has great customer support available in 5 languages via the live-in app chat.

The cons of using this business account

  • N26 core features are only available for business accounts with a monthly fee.
  • Clients can’t put their company’s name on the Mastercard.
  • The bank charges clients for foreign currency withdrawals on the free account.

Available for: Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the US.

Monese

Monese is a financial service established in the United Kingdom in 2015. The founder, Norris Koppel, who moved from Estonia to the UK was inspired to launch the company after he experienced problems with opening a bank account. Monese is a mobile app-based banking service that provides all the services of traditional banking.

Under the motto “banking without boundaries”, Monese allows clients to open a bank account in the UK or in the Eurozone without requiring a UK address, fixed income or credit history. All clients need to open a banking account is a passport photograph and a national identity card.

The benefits of using this business account:

  • Monese is available in 14 different languages.
  • Monese needs only 2 to 3 hours to transfer and process payment.
  • Clients can open a bank account without having an address or credit history in the UK.
  • Monese integrates with Google Pay and Apple Pay. Clients can make payments by using funds from these platforms.
  • Monese is a portable banking service available in 20 countries within  the Eurozone.
  • Clients can open a bank account just by using their passport or national identity card.
  • Monese credit cards can be locked and unlocked  immediately through the app.
  • All Monese debit cards offer contactless payment for purchases below £3030.
  • Users can transfer money to other countries without interbank or processing fees.
  • A 24/7 customer support service is available.
  • Clients get a Monese MasterCard for free.
  • Clients are charged 2% for currency exchange. Premium users get free currency exchange.
  • Monese lets clients set up direct debits for utility payments.
  • Users can make free ATM withdrawals up to £200. Passing that limit is charged with a 2% fee.
  • There’s an option for a dual currency account in GBP and EUR without cost.

The cons of using this business account:

  • The free plan is limited in features.
  • There’s no option to get an overdraft or a loan.
  • You can access your account only through a single smartphone.
  • There’s no FSCS protection
  • Monese banking accounts can’t accept cheques.
  • Clients are limited to 6 ATM withdrawals even on a Plus plan.

Available for: UK and countries within the Eurozone

PayPal

With more than 230 million users, PayPal is one of the most popular payment systems for freelancers. PayPal has a Business Debit Mastercard that gives you immediate access to the funds in your PayPal account. Customers shopping with a PayPal card don’t pay fees and when it’s done in a different currency there’s only a small conversion fee.

PayPal integrates with a number of business tools, shopping carts, accounting software, and shipping applications. PayPal has an impressive mobile app that stores everything in one place. Users also get great reporting through the reporting browser.

The benefits of using this business account:

  • PayPal accounts have an easy setup.
  • Clients don’t need to have a merchant account.
  • Clients get to set up recurring payments.
  • Clients can pay freelancers without having a PayPal account.
  • Clients can create and send invoices through their account.
  • Freelancers can receive payments from international customers.
  • PayPal offers multiple options for payment including checks.
  • You can integrate PayPal with a number of shopping cart systems.
  • PayPal is available in 200 countries and supports 25 currencies.
  • PayPal is an all-in-one payment system.
  • PayPal allows clients to send email payment requests.
  • PayPal allows clients to make customizable and professional invoices.

The cons of using this business account:

  • PayPal can freeze your account without contacting you.
  • PayPal has high transaction fees for large sales volumes.
  • Bad customer support.
  • Clients can wait up to four days to withdraw funds.
  • PayPal has high fees for chargebacks.

Available for: The Euro Zone, Africa, Asia Pacific

Azlo

Azlo is a digital banking service launched in the U.S in 2018. Azlo’s target audience is entrepreneurs, freelancers, and small businesses in search of alternatives to traditional banking services. By using Azlo, freelancers can get clean and accurate financial management and make more credible business transactions.

This banking service can be accessed through a mobile app. Clients can submit check deposits, manage a digital debit card, and get real-time notifications through the app. Azlo integrates with a number of digital business tools such as Stripe, Etsy, Square, and Xero which brings robust management to day-to-day transactions.

One thing that particularly distinguishes Azlo from competitors is the business checking transactions. Azlo allows users to process as many transactions as they want, without limits.

The benefits of using this business account:

  • Clients can open an online account without minimum deposits.
  • Azlo has no fees on foreign ATMs.
  • Great customer support via live chat.
  • Azlo offers real-time card and PIN blocking.
  • The Visa Business debit cards have no fees for international transactions.
  • Good security and encryption.
  • Clients pay no fee for cash access at over 55,000 ATMs.
  • Clients can make an unlimited number of transactions.
  • Azlo’s business account allows unlimited number of transactions.
  • Clients can send digital invoices directly from their accounts.
  • Azlo allows a fully digital online setup.
  • Azlo integrates with a number of business tools including Stripe, Xero, Etsy, and Square.
  • Azlo has no incoming wire fees.
  • The business account comes together with a number of fee-free features including transaction categorization, scheduling invoices, and tagging.
  • Azlo members can make instant real-time payments.

The cons of using this business account:

  • Azlo’s business accounts don’t allow cash deposits.
  • There’s no option to send wires through Azlo’s business account.
  • Azlo’s banking accounts can’t accept checkbooks and cheques.
  • Azlo’s banking accounts lack the multi-user business feature.

Available for: U.S, India, Mexico, Canada, Australia

Axos

Axos Bank is an online banking service that offers nearly all traditional banking services. They offer various types of loans, mortgages, checking, and deposit accounts to freelancers and small businesses. Axos personal savings account offers up to 1.3% APY and the business interest checking account is going up to 0.8% APY.

Axos has great customer support available via live chat, phone, and email 24/7.

The benefits of using this business account:

  • Axos offers personal loans, auto loans, and mortgages.
  • Customers can send digital invoices directly from their app or website.
  • Axos integrates with a number of platforms including Square and Stripe.
  • Axos has no maintenance fees.
  • Axos has 24/7 customer support via phone, live chat, and email.
  • Axos has no fees for foreign transactions.
  • Axos offers free domestic ACH transfers.
  • No minimum deposit or balance required to open a business account.
  • Axos bank accounts are FDIC insured.
  • The Axos mobile app is available on Google Play for Android devices and at the App Store for iOS devices.
  • The mobile app allows users to make mobile check deposits.
  • Axos’ checking accounts enable clients to schedule automatic bill payments and peer-to-peer payments.
  • Clients under Essential Checking and Rewards Checking can make unlimited ATM reimbursement.

The cons of using this business account:

  • Axos accepts up to $20,000 in deposits.
  • New deposits may be held up to five days.
  • The mobile app supports only a single user sign-in.
  • Cash withdrawal is limited to up to $510.
  • Only Premium members get unlimited, no-fee ATM access.

Available for: US.