Working as a freelancer is an experience like no other. For one, you are not bound to one company and workspace and are free to choose the task that suits you best. However, you still need to pay a lot of attention to your income flows and ensure they are secure at all times.
To keep your finances in check, you may consider opening freelancer bank accounts that offer low or no fees and tools for effective financial management, plus better traditional/digital banking services. And here’s where the Genome team comes to help!
In this article, we will list what things you need to consider when choosing the best business bank account for self-employed individuals. We will also explain why you need a freelance bank account or a debit card for freelancers in the first place.
Do you need a bank account for freelancers?
The short answer is yes, you do. It is hard to imagine small businesses or freelancers working without the ability to receive payments via digital means. Yes, some independent contractors still prefer accepting payments for their work only in cash.
However, it narrows them down to only a select few companies and local employment places.
Meanwhile, the freelancer bank account will allow you to get payments to your account from multiple countries worldwide. And this is just the tip of the iceberg! Additionally, many freelancer bank accounts offer fee-free cash deposits, which can significantly benefit those handling large volumes of cash transactions each month.
Speaking of personal and business accounts for freelancers, they are usually the same as regular accounts. But, in some cases, online bank accounts for freelancers offer additional business tools for business owners.
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in Genome online
Benefits of having a business bank account
Having online business checking accounts is essential for freelancers and small business owners. It provides several benefits that can help with financial management, improve credibility, and reduce the risk of commingling personal and business funds.
Separate personal and business finances
One of the primary benefits of having a business checking account for your freelance business is that it allows freelancers to separate their business and individual finances. This separation is crucial for maintaining accurate financial records, making tax time easier, and reducing the risk of personal liability.
By keeping business and personal finances separate, freelancers and small business owners can ensure that their personal assets are protected in case of business-related financial issues. This clear distinction also simplifies tracking expenses and income, making the financial management of all your business finances easier.
Professional image and credibility
A business bank account can also help freelancers establish a professional image and credibility with clients, vendors, and partners. Having a dedicated business checking account shows that you are serious about your business and willing to invest in its growth.
It can lead to increased trust and confidence from clients, which can ultimately result in more business opportunities. When clients see that you have a business bank account, it reassures them that they are dealing with a legitimate and professional entity, enhancing your reputation in the industry.
Tax benefits and easier accounting
A business bank account can also provide tax benefits and make accounting easier, thanks to additional banking services. By keeping business expenses separate from personal expenses, freelancers can easily track and deduct business-related expenses on their tax returns. This can result in significant tax savings and reduced accounting complexity.
Additionally, a business checking account can provide a clear picture of business finances, making it easier to manage cash flow and make informed financial decisions. With all business transactions in one place, you can streamline your bookkeeping processes and ensure that you are fully prepared for tax season.
Business checking account for freelancers or a personal one – which is better?
When you start freelancing, you usually take the business-first approach, meaning that you do the job and consider getting a payment later. In those cases, you ask a person you work for to transfer money to your personal checking account.
Doing so is not forbidden, but you’ll be much better off with a separate business checking account. Separating personal finances from business finances is crucial for maintaining clarity and financial health. How come? Let us explain further.
Business banking for freelancers allows you to take your career to another level as you stay in more control of your money and get more financial management tools. The benefits of having a separate business account over a personal one include the following:
You won’t have to mix your business and personal funds. First of all, your accounting manager will be pleased that you do not mix personal and business transaction flows. Even if you don’t have an accounting manager, the business checking account will provide more comfortable options to pay taxes and make transactions by separating personal and professional finances.
Plan ahead. If freelancers/small business owners plan to work with the government sector at some point, an account for personal needs really isn’t an option.
Advanced assistance. Generally, customer support for business clients is better, as business bank accounts for freelancers usually provide dedicated managers for each client.
Improve the credit history. A business account for a freelance business allows you to build up your credit history. Managing and maintaining your finances and paying all your bills on time can show potential lenders that you are a responsible person.
Avoid problems with your bank. Not all financial institutions allow mixing personal and business funds, so they can charge you or even cut all ties. So, a freelance business account for freelancers is a safer option overall.
As you can see, there are certain things that you can handle better with business banking for freelancers.
Types of bank accounts for freelancers
There are several types of bank accounts that freelancers can consider, each with its own set of features and benefits.
Business checking accounts
Business checking accounts are the most common type of bank account for freelancers. They provide a range of features, including:
Unlimited transactions
Free online banking and mobile deposit
Business credit cards
Cash management tools
Integration with accounting software
Business checking accounts are ideal for freelancers who need to manage multiple transactions, track business expenses, and maintain a professional image. They can also provide tax benefits and easier accounting, making them an essential tool for freelancers.
When choosing a business checking account, freelancers should consider factors such as fees, interest rates, minimum balance requirements, and customer support. They should also look for accounts that offer online banking and mobile deposit capabilities, as well as integration with accounting software.
By choosing the right business checking account, freelancers can manage their finances effectively, improve their credibility, and achieve their business goals.
With the right business checking account, you can focus on growing your freelance business without worrying about hidden fees or complicated banking processes.
Open an account
in Genome online
The criteria for the best business bank account for self-employed and small businesses
Banking for freelancers is common nowadays, but you need to assess what banking services you need before selecting a suitable account.
For instance, if you want to work exclusively within your country, take a look at local and small banks for freelancers. They have a specialization that provides much better conditions – their business depends on each client, so they try to give you full support with their service.
If you plan to go global and work with clients worldwide, you can try an all-in-one financial provider like Genome. Our business wallet will allow you to access various transfer options with multiple currencies at hand – a notable feature the best bank for independent contractors must possess.
The availability of money transfer services is one of the most important things in business banking for freelancers and small businesses, as you will have different employers in different countries.
So, for instance, if your clients come primarily from Europe, SEPA Instant and Credit Transfers are what you are looking for. If they are located in the US or Canada, you need SWIFT transfers, just make sure you’re eligible.
And, for employers from the UK, the Faster Payments option will be just great (but only if you are located in Great Britain yourself). So, in a nutshell, the more transfer options your freelance bank account provides – the better.
Also, keep in mind the currencies in which you can make transfers and store funds – choose what works best for you.
When selecting a business account for freelancers, the monthly fee is not the only thing you should worry about. You also need to pay attention to the transaction fees and yearly payments.
Monthly maintenance fees can significantly impact your profit margins, so understanding these costs is crucial.
An online bank for freelancers might be a solution for you if you work remotely and would be sending and receiving many transfers a month. Not to mention that you won’t have to take time out of your busy schedule for bank branch visits.
Of course, before selecting a bank, ensure it actually works with independent contractors within your industry. And please, don’t underestimate reviews on the Internet. Sometimes, it is the best criterion for a decision.
What if you still want to use a personal bank account for freelancers?
So, if you still want to use a personal current account/an existing bank account to accept transfers for your freelance work – you can do so. Make sure to find a reliable financial institution that allows such transactions.
Additionally, consider the benefits of having a business savings account. Savings accounts can offer better interest rates, lower fees, and additional services tailored to support your business growth and management.
We also recommend freelancers get a debit card and not use credit cards for this purpose. How come? Well, just imagine your account mixed with your personal funds, transfers from clients, credit funds, and a certain amount for taxation. It will be a nightmare to manage. Your bank would not be pleased as well.
Debit cards only use the funds that you have in your account, so you don’t have to worry about the interest the bank might charge you for using credit funds.
Other important things for your account for freelancers include the following:
Take notice of the multi-currency feature in your account. The accounts and transfers must at least support US dollars and euros. SEPA transfers must be an option for your payments.
By the way, the transaction limit is very important when selecting a bank for freelancers. Don’t forget that you are using the account for both – private and business funds, and the transaction number will likely double.
In case of an emergency (lost card, blocking of the account, etc.), your bank must have customer support and many ways to reach the support team.
Check out the terms and conditions. Some banks don’t allow such accounts to be used for business purposes, so you can lose your account.
The best business account for freelancers and sole proprietor accounts for Ukrainians at Genome
Now that you understand what features define the best bank account for freelancers, we’d like to recommend Genome!
With us, you can experience all the benefits of an online bank for freelancers. Genome is an electronic money institution licensed and supervised by the Bank of Lithuania.
Our team services individuals and companies, so Genome is a great place to open a business account for freelancers. We operate in over 50 countries and territories, providing services via the web or the Genome app for your convenience in mobile banking. Let us walk you through the process.
Starting a business account at Genome is simple, as we provide all our services online. All you need to do is:
1. Go to my.genome.eu.;
2. Enter your email/phone number and a password;
3. Start the registration process – choose a business wallet option;
4. Next, you will need to fill out some personal information and pass the identity verification by filming a video selfie;
5. Next, you will need to enter some business details – note that you need to select the individual company option and choose the activity type.
And that’s all it takes! After Genome approves your verification, you get access to one of the best business accounts!
First of all, there’s a multi-currency option. When you first start your business wallet, you have one account in euros inside. But you can easily add more accounts just from the main Dashboard – you don’t need to provide any additional information.
You can have multiple accounts within one wallet, five accounts per currency: USD, GBP, EUR, PLN, CHF, JPY, CAD, CZK, HUF, SEK, and AUD. It will allow you to store funds in different currencies for your convenience.
Of course, transfers are one of the main features of a business account for freelancers. And Genome has you covered here! We offer SEPA and internal transfer options. Let’s quickly go through them.
SEPA payments are used for people and companies within the SEPA zone, which covers all the members of the European Union, as well as Switzerland, Liechtenstein, Andorra, Iceland, San Marino, Norway, Vatican City, the UK, and Monaco. All the transfers are made in euros, so it is a great option if you work in Europe.
We also have internal instant transfers that can be sent between the Genome users.
In addition, you can also check if you’re eligible for international transfers, including SWIFT, Faster Payments, CHAPS, and more. Send and receive international payments in 11 currencies from over 40 countries.
Note that Genome has limits on incoming and outgoing payments. When you start a business wallet, your basic limit is 100 000 EUR for incoming and 100 000 EUR for outgoing transfers. You can easily increase said limits. To do so, go to the Settings tab and select the Limits section. Fill out the application to increase the limits, and we will review it in one to two business days.
Need a debit card for your freelance business? Genome’s got you covered! Our platform provides both virtual and physical Visa business debit cards. What is the difference?
The virtual cards exist exclusively in a digital form, meaning you can pay with them online. You can also use them for contactless payments via Google Pay, Apple Pay, or Garmin Pay. The virtual card will be available once you order it.
Genome’s contactless physical business debit cards can be used as regular Visa cards – at any store or place worldwide where Visa cards are supported. You can also use them for online purchases.
Once you order your physical card, you can start using it online while we deliver it. The delivery is available inside the EU. Use your freelance debit card to spend your income on purchases and necessary payments. All the cards can be linked to accounts in USD, GBP, EUR, PLN, CHF, CZK, HUF, and SEK, so you can save money on purchases abroad.
These are some of the primary features you need from your bank for freelancers. But Genome has so much more to offer!
Another crucial mark the best bank account must hit is security. Genome follows strict regulations and is PCI DSS, PSD2, and GDPR compliant. We enable two-factor authentication every time our clients log into Genome, as well as for all outgoing transfers. Not only that, but our business wallet users can get a Genome token. It is a small device that allows the remote approval of all outgoing payments. So, you get a second layer of protection, as the transfers require double authorization.
Open an account
in Genome online
Genome’s special initiative for Ukrainians – bank account for self-employed
In 2022, Genome made its contribution to helping Ukrainian people who have been facing the atrocities of the full-fledged Russian invasion. We donated to the country and allowed Ukrainian citizens to join Genome and start personal accounts.
A bit later, our team enabled special sole proprietor accounts so Ukrainians could receive income in euros and make payments abroad or at home. The sole proprietor account can be used as a banking option for freelancers as well.
If you are from Ukraine, here’s how you can apply for the said account:
Go to my.genome.eu;
Enter your email/phone and come up with a secure password;
Choose the personal wallet option;
Enter the required information about yourself;
Pass the identity verification – you will need your ID and phone to record a quick video selfie.
Once you’ve got your personal wallet, go to the main Dashboard and click the plus sign in the upper left corner near the personal accounts section. When there, select the Sole proprietor account and open it.
To start getting payments, you need to go to the Dashboard and click the Account details button for your sole proprietor account. Copy the details and send them to the person/employee/financial department from which you want to accept transfers.
The sole proprietor account makes banking for freelancers easy! With it, you can receive income in euros. Transfer the money received to your other Genome accounts using our internal transfer or to other banks via SEPA. You can also order our cards and make purchases with them.
Open an account
in Genome online
FAQ
Which bank account is best for freelancers?
As we explained in the article, you can use both personal and business accounts for the purpose, although the business account is preferable for income separation and taxes. When considering freelancer bank accounts, the best bank for freelancers will be the one that offers multiple money transfer options and has a dedicated support team with numerous communication channels. Also, before selecting a bank, make sure it supports the freelance industry in which you work.
Does freelancing need a bank account?
Yes, because it is more convenient to receive payments for your work via transfers, especially if you work for people from around the world. Freelance bank accounts offer features and advantages that cater specifically to freelancers, such as low or no fees and tools to manage finances effectively.
Can a freelancer open a bank account?
Yes, of course. Many financial institutions offer freelancer bank accounts that cater specifically to freelancers’ needs. Genome, for instance, provides one of the best business accounts for freelancers, which we described in great detail earlier.
Should the self-employed consider using digital banks?
Freelancer bank accounts are very convenient for freelancers, as you don’t need to visit bank branches and can manage all your accounts from the comfort of your house.
What account do I need for self-employed?
Freelancer bank accounts can be either personal or business accounts, depending on your preference. However, we recommend starting a business account for freelancers, as it is more secure and allows them to separate personal funds from business ones.
