Banking

What Is Online Freelancing

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 11 minute read

Millions of Americans not only have regular 9-to-5 employment but also freelance or run side businesses on the side. These individuals, whether they operate under a legal business name or not, and regardless of their own perceptions, are business owners.

However, this does not imply that they have the same level of access to the commercial banking system. Similar to how there is a limited selection of freelancer credit cards compared to small business credit cards, many banks that might otherwise be willing to work with entrepreneurs will not do business with those who work on the side.

The good news is that quite a few of them actually do. Acquaint yourself with the following institutions if you need a checking or savings account for your freelance or side business income.

The Top Bank Accounts for Independent Contractors and Side Businesses

Now is the time to open one of these top-tier checking accounts if you’re a side hustler or freelancer. Each excels in some respect, but we think the best overall selection provides the most bang for the buck for the most audience.

Lili is best overall (Lili Account)

The Lili Account is one of the few types of checking accounts available to self-employed people, whether they operate as freelancers, side hustlers, microbusinesses, sole proprietors, or anything else.

It centers on an effective suite of tools that streamline and simplify operations:

  • Software for managing one’s tax obligations in the face of many income and expenditure streams
  • Capabilities for invoicing within the company
  • Automatic record keeping of eligible expenditures
  • Pay with cash at any of the 90,000 deposit locations nationwide (fees may apply)
    Automatic savings system that enables you to put away as little as $1 per day into a rainy-day fund earning up to 1.00% APY.
  • By qualifying direct deposit, you can get paid up to two days early.

Even in her spare time, Lili is handling her own funds. As a sole proprietor, this checking account may serve all of your financial needs.

Features beyond the basic:

  • Use your business debit card anywhere Visa is accepted
  • Enjoy fee-free ATM withdrawals at nearly 40,000 locations
  • Earn cash-back rewards on eligible purchases
  • No minimum balance or hidden fees

Chase Business Complete Checking is the best bank account bonus.

When it comes to new account bonuses, Chase Business Complete Checking offers the most competitive terms for freelancers. Get a free $300 just for opening a new account with us, whether it’s online or in person.

Included bonuses:

  • If you use your Chase Ink Business credit card regularly and either carry a minimum daily balance or make a certain amount of purchases each month, you can avoid paying the $15 monthly maintenance fee.
  • Chase QuickDeposit Access ATMs and branches in the following states allow for limitless electronic deposits, ACH transfers, and mobile check deposits; Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Michigan, Nevada, New Jersey, New York, Ohio, Oklahoma, Oregon, Texas, Utah, Washington, West Virginia, and Wisconsin.

BlueVine is the best for Interest Checking Balances.

When you reach a monthly activity objectively, Bluevine Business Checking is one of the only business checking accounts that pay interest on checking balances at 2.00% APY (currently, up to and including $100,000). 

Simple choose one of the following options:

  • A minimum of $500 in monthly purchases must be made using your Bluevine Business Debit Mastercard® OR $2,500 must be deposited into your Bluevine
  • Business Checking Account monthly from your customers via ACH, wire transfer, mobile check deposit, or directly from your merchant payment processing provider.

If you’re a freelancer searching for a way to make some additional cash on the side, Bluevine is one of the only business checking accounts that offer this perk.

Additional properties of Bluevine that are worth mentioning include:

  • No minimum balance requirements or monthly fees
  • Unlimited transaction allowance
  • Connect your account to QuickBooks Online, Wave, and Freshbooks — some of the top online accounting platforms around
  • Link with external revenue and expense management tools, including Expensify, PayPal, and Stripe
  • Add up to 2 subaccounts to your existing BlueVine Business Checking account
  • Enjoy mobile features like mobile check deposit and biometric security
  • Pay no fees at nearly 40,000 ATMs in the U.S.
  • Deposit cash at more than 90,000 Green Dot locations in the U.S.

NBKC Business Checking is the best option for ATM fee reimbursements.

The NBKC Business Checking Account has almost no fees, making it a better option than many other accounts marketed for freelancers. There is no minimum deposit required, and there are no service or transaction fees, either.

In particular, the reimbursement of ATM costs charged anywhere in the world (not only in the United States) up to a maximum of $12 per month stands out. In addition to the free withdrawals at more than 30,000 ATMs nationwide, this is yet another perk enjoyed by NBKC’s commercial clientele.

For those whose side gigs or freelance careers necessitate a regular revenue flow, NBKC is the way to go. 

Furthermore, a plethora of optional extras are available for your use:

  • Seamless mobile and desktop check deposit
  • Use mobile bill pay to cover expenses on the go
  • Take advantage of NBKC’s courtesy overdraft sweep (see its account disclosures for details)
  • Enjoy unlimited free transactions
  • Pay no monthly maintenance fee
  • No minimum balance or deposit requirements

Novo is the top choice for Payment and P2P Money Transfer App Integration.

Middlesex Federal Savings, F.A. backs the Novo checking account, which is geared toward independent contractors. There are no service charges or minimum balances to worry about. 

However, its greatest strength is the wide variety of other applications it can be integrated with, which are all useful for running a small business.

  • Zelle is an online payment and transfer service that allows users to send money directly to one another over the Internet.
  • Software like Freshbooks, Zoho, and QuickBooks make keeping the books a breeze.

Novo is a useful in-house invoicing tool because it interfaces with Stripe and PayPal, allowing customers to pay with a few taps or clicks on the invoice.

  • The easy application process takes just 10 minutes to complete
  • Thousands of dollars in exclusive perks (see Novo’s website for details)
  • $50 minimum opening deposit
  • Virtually no fees other than an overdraft and returned item fee

LendingClub Bank Tailored Checking is the best option for earning checking account rewards.

With the LendingClub Bank Tailored Checking, you may earn up to 1% cash back on qualified signature-based debit card purchases with a monthly average amount of $5,000 or more.

You won’t be able to earn any rewards for the first 30 days after opening your account. On the other hand, your earning potential is infinite going forward.

Features beyond the basic:

  • Earn interest on balances over $5,000
  • No transaction limits or fees
  • Make check deposits and lock your debit card on the go using the LendingClub Bank app
  • Maintain a minimum daily balance of $5,000 or more to waive the $10 monthly maintenance fee
  • Enjoy unlimited ATM fee rebates

Top for High-Return Investments and Small Business High-Yield Savings Accounts

The bank that specializes in helping sole proprietors, microbusinesses, and expanding small businesses succeed is called Small Business Bank. The Business High Yield Savings Account lives up to its name by providing a competitive rate of return on deposits of any size, with no minimums and no monthly maintenance costs. 

This makes it an excellent option for those who have found success in a side gig or freelance work and want to take their careers to the next level. Tiered returns on the Business High Yield Savings account run from 0.20% APY on balances under $25,000 to 1.00% APY on balances of $500,000 and beyond.

Features beyond the basic:

  • Free mobile check deposit
  • No monthly maintenance fees
  • Rapid online approval
  • Link to a free checking account with a Mastercard debit card and other great features

NorthOne Business Banking is the best for savings subaccounts.

When looking for a bank account, freelancers will find NorthOne Business Banking to be one of the few options that provide savings subaccounts. Money set aside for things like projected taxes, wages, or brand-new pieces of equipment may be easily tracked thanks to these accounts within accounts.

There is a $10 monthly charge for using NorthOne Business Banking. However, the numerous added benefits make the price worthwhile:

  • You can use your debit card to make an unlimited number of payments, transfers, and deposits.
  • There are almost 300,000 ATMs that are part of the network.
  • Mobile bill pay and check deposits
  • In a special promotion, NorthOne is currently giving new business customers free banking for one month if they join up through the link below, which is only available to readers of Money Crashers.

Axos Bank Basic Business Checking is the best for free checks.

While several business checking accounts do allow for the writing of checks, only Axos Bank’s Basic Business Checking will provide free delivery of your first batch of business checks. That’s enough for up to 50 checks to be written and mailed to suppliers or freelancers who still prefer paper checks.

These are some of the standout extras that come with Axos Bank’s Basic Business Checking:

  • The Potential for a Limitless Amount of Free Purchases
  • There is no ongoing service fee
  • When you open an account, you’ll receive a debit card at no cost.
  • Use the app to pay bills and deposit checks on the go.
  • There are no required minimal balances
  • If your company was formed on or after June 1, 2020, and you’re new to Axos Bank, you can receive a bonus of up to $200.

How We Choose the Best Bank Accounts for Side Hustlers and Freelancers Using Our Methodology

We evaluate the best checking accounts for freelancers and part-timers based on a number of criteria. All have something to do with the account’s overall price, its use, its adaptability, or its capacity to generate value for the account holder.

Monthly Maintenance Charge

The monthly maintenance charge may not be the most significant or expensive charge associated with your bank account. As an illustration, overdraft charges can easily build up if you’re not attentive.

In contrast, the monthly maintenance cost is the one that prospective account holders remember most readily and the one that is typically the hardest to avoid. Banks that do not charge monthly maintenance costs or have modest maintenance fees that can be waived with a minimum balance or other qualifying activity are preferred.

Fees for Other Accounts

Overdraft and nonsufficient funds (NSF) fees, paper statement costs, ATM withdrawal fees, and wire transfer fees are some of the other prevalent fees associated with bank accounts. Bank accounts with no monthly maintenance fees are preferred, and we then look for accounts with fewer and cheaper fees than usual.

Limits on Transactions

Many commercial checking accounts have monthly transaction limits, although consumer checking accounts rarely do. It’s not uncommon for organizations with a lot of monthly outgoings to have these caps set at as low as 50 or 100 transactions.

When compared to small and medium-sized firms, freelancers are typically slower to make payments. A successful dropshipping business, for example, can easily cause a side hustler to exceed its monthly transaction limits. 

Because of this, we give our preference to financial institutions and accounts that either doesn’t impose any limits on transactions or impose limits that are so high that they won’t affect most independent contractors.

Requirements for Deposit and Minimum Balance

Business checking accounts often need a sizable opening deposit or minimum balance, which can be prohibitively expensive for solitary owners. These requirements may not prevent you from opening an account, but you must meet them to avoid maintenance fees and other expenses.

Banks without any minimum deposit or balance limitations are our first choice. If we can’t find a bank with low minimums, we look into methods of avoiding the associated fees, such as setting up automatic payments into a different account.

Account Yield (Interest Rate)

In most cases, interest on a company checking account is negligible at best. While you’re more likely to earn interest on your business savings account, you still shouldn’t bank on it keeping pace with inflation. 

In any case, we judge financial institutions and accounts based on the premise that some yield is preferable to none.

Functionality and Features of Mobile

A large number of self-employed people and those with side businesses rely heavily on their mobile devices. For example, if you run a profitable dog-walking or handyman service, you probably won’t be spending much time at the office. You probably use your phone for everything from talking to customers to making purchases to taking notes.

You shouldn’t have to rely on a computer that you barely use. You shouldn’t, and that’s why our go-to financial institutions provide sleek, feature-rich mobile apps or account dashboards.

Features for Saving and Budgeting

An understanding of the value of budgeting and living within one’s means is applicable regardless of whether or not personal and business funds are combined. If you want to succeed in your side business, you should keep careful financial records and spend less money than you bring in.

That’s why it’s important to have a system of internal budgeting tools and an automated system for putting money away. Many of the options on this list are offered at no extra cost by freelancer-friendly banks.

Features of Accounting and Taxes

The accounting and tax management functions of some freelancer-friendly bank accounts are either built-in or accessible via an external system. 

These functions, when found in an external system, frequently take the form of simple connections with widely used third-party software, such as Xero or QuickBooks. If all other factors are equal, we prefer financial institutions that make it easier for their customers to file their taxes.

How to Pick the Right Bank Account for Your Side Business or Freelance Work

It’s not too dissimilar from opening a regular checking account to opening a checking account specifically for your freelance or side business income. 

The following should be taken into account as you weigh your choices:

  • Bank Charges. Account maintenance fees are a nuisance for anyone. Unless there’s a good reason to go with a different option, you should look for a checking account that doesn’t charge a monthly maintenance fee or allows you to easily avoid paying one by maintaining a certain amount or making regular deposits. The fees associated with using an ATM and going over your bank’s overdraft limit are examples of “small” fees you should watch out for.
  • Concessions and Caps on Business Deals. There is typically a monthly or statement-based cap on the number of transactions that can be made from a business bank account. This could be an issue if you make several small withdrawals or payments.
  • The Required Minimal Balance. Working as a freelancer or side hustler means you probably won’t have huge savings right away. And depending on your income, your balance could change from week to week and month to month. That’s why you’re on the hunt for a bank account that doesn’t impose a minimum balance restriction.
  • Financial Gain. Low-interest rates are the norm for business bank accounts. For longer-term business finances, though, it can pay off to open a reward checking account or high-yield savings account that welcomes freelancers and side hustlers.
  • Added Functions and Capabilities. Do you wish for a banking app that would allow you to handle your money while on the go? How much of your revenue comes from using services like Venmo and PayPal? Need an easy-to-use accounting system that helps you keep track of corporate funds independently from your personal ones? These and similar inquiries will help you hone in on the finest checking account for your side hustle or freelance work.
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