When starting out as a freelancer or beginning any self-employed venture, the first topic on the agenda is – how do I properly manage my money?
Of course, there are a plethora of questions that arise, but the most pervasive one is about handling your money appropriately. There are many types of bank accounts available from many different institutions.
Let’s review the difference between entrepreneurs, their small businesses, and freelancers, along with business accounts that are suitable for each.
Freelancer vs. entrepreneurs – How do they relate and differ?
Although alike to some slight degree, freelancers are different in almost every regard to entrepreneurs with small businesses. The similarity, though is that they’re both independent thinkers and work for themselves.
However, freelancers primarily operate as a single entity acquiring different projects from others as a means of building their roster and maintaining a steady income. On the contrary, entrepreneurs work diligently on personal projects in an attempt to create an organization that will, in turn, produce money for them continuously.
To put it simply, freelancers must work persistently to not only make money but also to maintain it. They must ensure that they retain as much money as possible and limit expenditures. When people talk about “the hustle” it often relates to freelancing since you’re always hustling to make money.
Some may argue that entrepreneurs must do the same, which is accurate indeed. However, for freelancers, income wavers and controlling spending is critical.
Accounts that are best for small businesses (but not freelancers)
It seems that when financial institutions were constructing checking accounts for small businesses, they somehow missed the freelancer seeking to make a living. Just as important as it is for a small business to have a separate business account for better manageability of funds, this also holds true for freelancers.
Small business accounts are often offered in various tiers, which is seen, for example, on Bank of America and US Bank’s website. These ranks of checking accounts allow small businesses in different stages of their business’ development, to choose accounts that are suitable for their financial needs.
Although great for small businesses, they’re not entirely appropriate for a single freelancer with a variable income. The assumption many of these accounts hold is that there is more than one individual operating the business.
Another assumption is that there will always be a consistent balance in the account and that money will be coming in regularly as opposed to periodically. This is the cause of high fees that often plague small business accounts.
This may be okay for a small business that can maintain a hearty balance. However, as a freelancer, this is not an ideal situation.
Online accounts that are best for freelancers
In general, the best checking account for a freelancer is one that does not require monthly service deductions. An account that enables a freelancer to retain as much hard-earned money as possible is undoubtedly an ideal bank account.
To help you retain just about every dollar that you obtain from freelancing, here are some online institutions to consider. Some of the best accounts for freelancers include:
With Bluevine you never have to worry that bank fees are eating up your profits. Bluevine doesn’t charge monthly fees for their online business checking account. You won’t have to pay NSF fees or incoming wire fees, either. Plus, Bluevine doesn’t charge you to use the ATM.
Applying for a business checking account with Bluevine can be done online in just 60 seconds, and if accepted, you’ll get access to these features:
- No monthly fees.
- No ATM fees.
- No minimum deposit.
- No minimum balance requirements.
- Mobile banking app.
In addition to that, you can earn 2.00% on your balance up to $250,000. With national interest rates averaging significantly lower, that’s a pretty good deal. To qualify for that rate you have to meet one of the following monthly eligibility requirements:
- Spend $500 per month with their Bluevine Business Debit Mastercard®, which can be used everywhere Mastercard® is accepted
- Receive $2,500 per month in customer payments into their Bluevine Business Checking account via ACH, wire transfer, mobile check deposit, or directly from their merchant payment processing provider
Some other benefits of banking with Bluevine:
- Unlimited transactions.
- Free checks (two checkbooks provided).
- Free account transfers.
- ACH and recurring payments.
Your deposits are FDIC insured up to $250,000, so even though Bluevine may feel like the new kid on the block (they’ve actually been around since 2013), you know your funds are safe.
With Lili, you never have to worry that bank fees are eating up your profits. Lili doesn’t charge monthly fees for their basic online business checking account. There’s a Lili Pro account with a $9 monthly fee, Lili Smart with a $20 monthly fee, and Lili Premium with a $35 monthly fee; however all of those account come with enhanced features. With all accounts, you won’t have to pay NSF fees or incoming wire fees. Plus, you can enjoy fee-free withdrawals at more than 38,000 ATMs.
Lili is an online banking solution built for the freelancer. You’ll get all the tools you need to manage your money and file taxes, as well as the debit card and ATM access you’d get with a personal bank account.
With no hidden fees or minimum balance requirements, it’s the perfect platform for the busy independent contractor.
- No hidden fees
- Automatic savings buckets
- Get your paycheck early
- Limited ATM usability on deposits
- For freelancers (and other business types) only
You can apply for a Lili account online in just three minutes (they actually timed it). Once approved, you’ll get access to these freelancer-friendly features:
- Fee-free withdrawals MoneyPass ATMs.
- No hidden fees.
- No overdraft or international transaction fees.
- No minimum balance or initial deposit requirements.
Lili was built specifically for the unique needs of freelancers, so you’ll also have access to a seriously advanced set of tools to help you maintain your business. They include:
- Automatically save for taxes and emergencies.
- Expense tracking.
- Easy expense categorization.
- Detailed expense reporting.
- Early access to direct deposits.
With automatic savings and real-time expense tracking, you’ll be ready when tax time comes around. Whether you’re preparing your quarterly estimated tax payments or filing in April, you can pull a report that will give you all the information you need, finally making doing your taxes an easy accomplishment.
Lili Pro adds on customizable expense categorization, as well as unlimited invoicing. In addition to the boosted business features, you’ll also earn 4.15% APY on your savings and cash back rewards on purchases from a large group of merchants. There are also higher tier Lili Smart and Lili Premium accounts.
Novo is geared toward small businesses, offering a suite of solutions designed to help you grow and thrive. With no fees and no minimum balance requirements, you can set up an account that will scale with you over the years. You can also easily transfer funds and monitor your balance using the mobile app.
Novo is an independent technology company geared toward freelancers and small business owners. When you start your own business, you’ll quickly find that using your personal bank account can get overwhelming. Novo can help you separate your business and personal finances for free.
- Fee-free banking
- Easy setup
- Convenient online banking
- Business accounts only
- Electronic checks only
- No cash deposits
Some benefits you’ll get as a Novo accountholder include:
- Free ACH transfers and mailed checks.
- All ATM fees refunded.
- No minimum balance requirements.
- Business tool integration.
When you sign up for a Novo account, you also get access to a variety of member perks. These address the needs of business owners, including:
- $3,000 in Google Cloud credits.
- Free six months of Zendesk membership.
- 50% off Salesforce Essentials plan.
You can apply for an account in minutes through the website or smartphone app. Once you have an account, you’ll be able to manage your payments and monitor your balance, as well as easily transfer funds between bank accounts.
Chase Business Complete BankingSM
If you’re looking for a little cash to go with your new business checking account Chase Business Complete BankingSM has you covered.
Chase Business Complete Banking℠ is a small business checking account that offers a competitive suite of benefits for business owners providing you what you need to start or grow your business and keep it going.
- Convenient physical bank access
- Wide range of additional banking services
- QuickAccept℠ payment processing feature
- Monthly fee may apply
- There's a limit to free transactions
Please note; there is a $15 monthly fee for this account and it can be waived.
Some of the benefits of this business account are as follows:
- Unlimited electronic deposits.
- 100 transactions per month at no charge.
- $5,000 in cash deposits per statement cycle without an additional fee.
- Convenient access to more than 16,000 ATM’s and more than 4,700 branches.
The LendingClub Tailored Business Checking Account allows you to earn interest on your balance.
You can apply for a LendingClub Bank business account online in minutes. If you’re approved, you’ll have access to the following features:
- Rebates on all ATM fees.
- No monthly maintenance fee.
- No minimum monthly balance after $100 minimum opening deposit.
- Deposits available at participating partner ATMs.
Best of all, you’ll get a LendingClub Bank debit card that will earn you cash back on all purchases – so this is definitely an added bonus! LendingClub Bank sometimes also offers extra cash back in bonus categories.
Through the LendingClub Bank mobile app, you’ll also have the following convenient features:
- Real-time transaction history.
- Digital invoices.
- Bill pay.
- Mobile check deposit.
- ACH and wires.
- Generate reports for accounting purposes.
Your transactions are secured by 256-bit encryption, and FDIC insurance covers your funds up to $250,000.
Huntington Bank Unlimited Business Checking
Enticing benefits well worth noting:
- Sweep Services.
- Remote deposit.
- Tools and resources for small business owners.
- Unlimited monthly transactions.
In addition to unlimited transactions, you also choose from one of the following bonus solutions:
- Fraud Tool.
- Up to 50 deposit scans per month.
- 10% off Paychex payroll services.
- Two incoming domestic wires per month.
- Or up to 25 returned deposit items per month.
Finally, another real benefit of setting up an account with Huntington Bank is its resources. Through The Hub for Business, you’ll get tools like cashflow monitoring, financial forecasting, and alerts. Huntington also has articles to help business owners and a checklist to help you open a business account.
Premier or Business PayPal Account
In an attempt to completely rid yourself of the traditional checking account, you can opt for the business solutions that are provided by PayPal. By electing to receive money from freelance work via PayPal, you can use the PayPal balance to make purchases.
If required, PayPal can issue a debit card that enables you to use your account as you would any bank account. The only difference is that you pay absolutely no monthly fees and you can earn a bit of interest on your money.
You can also take a picture of your checks and deposit them as you would in any other account.
Anything you do with your traditional bank can also be done using your PayPal account.
Traditional banking for freelancers
Despite the inescapable presence of banking accounts that charge questionable monthly fees, there are a couple of traditional banks that offer excellent solutions. Some of the more conventional options include:
U.S Bank Silver Business Package
The maintenance fee for this business checking account is $0. Yes, now you can jump for joy.
It offers 150 free transactions, and if surpassed, a per-transaction fee of $0.50 is charged. Clients are limited to a cash deposit of $2,500, and a fee of $0.17 is charged per additional deposit.
The U.S. Bank Silver Business Package is commendable because unlike other business checking accounts, a number of free transactions and cash handling limits are offered.
It’s also accessible, with many branches throughout the United States. A mobile app is also available.
Freelancing can be rewarding, as it enables you to set your own hours. Despite its flexibility, retaining money and managing it effectively is pivotal.
When shopping around for the right accounts for freelancers and side hustlers, be sure to opt for institutions that offer no fees or low-fees for housing your money. This will enable you to stay on top of your game and control your expenditures.