7 Self-employed Bank Accounts

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A report released in 2020 stated that over 36% of America’s workforce are freelancers.

Since you’re here, I’m guessing you’re also a freelancer and asking yourself “do freelancers need a business bank account?”

Yes, they do. So whether you’re starting your new career or looking for an upgrade, you’ll want to find a reliable bank or financial service.

Best independent contractor bank accounts and services:

  1. Novo business checking
  2. Kabbage
  3. Wise (Transferwise)
  4. Lili
  5. Revolut
  6. Nearside (Hatch)
  7. nbkc

Throughout this post, I’ll first cover how to shop for the best bank account for the self-employed. Afterward, I’ll cover the seven best digital banks for freelancers.

Keep in mind that this isn’t a definitive list, so you may want to explore other posts throughout the internet to get additional perspectives on additional freelancer banking options.

How To Choose a Bank Account

Choosing the right self-employed banking option as a small business owner can lead you to save a lot of time in having to deal with customer service queues that make you wait for hours. Moreover, choosing the right option will save you from choosing a new small business bank later.

Explore these criteria. If not all of these are what you’re looking for in an online business bank account, feel free to create a separate checklist you can use to judge each banking option in this post.

1. Bank’s Features

Online banking features like expense management, software integrations, and mobile banking will make your life a lot easier. First, explore the features each bank offers. Afterward, determine whether you would like to sacrifice one area (like reduced fees) for an additional feature.

2. Fee Structure

While many banks may offer identical features and security, one area that’ll make a specific bank stand out are the fees. Some fees that could end up paid include out-of-network ATM fees, maintenance fees, and overdraft fees. So pick what fees are worth the features you’re getting with your account.

If you’re using a non-bank financial service, most of them will have paid plans to give you additional features. If you go this route, you’ll want to see which offers the most value.

3. Banking Security

Security is the most critical factor to consider when banking. If a financial service isn’t secure, all your money and data are vulnerable to cybercriminals. Thus, you could eventually lose all of your money.

Ensure your freelancer bank account is FDIC insured. If you’re going through a financial service, ensure they’re FDIC insured through a partner bank. Moreover, verify the integrity of their partner bank.

Regarding logging in, it’s ideal (and rare) to find a bank that uses Time-based One Time Passwords (TOTP) two-factor authentication (2FA) login. However, many banks offer a decent alternative by enabling you to use biometric authentication through their smartphone app.

If a bank uses Single Sign On (SSO), I recommend using that over creating a new account. Because if you were able to sign in to your bank using a Google account, you could use the 2FA from that account to safeguard your bank.

However, whether your bank offers 2FA or not, you can still take other measures to safeguard your online data. For instance, you can and should create a complex password.

4. Currency Support

If you’re working for clients in different countries, you’ll need a financial service or bank with multi-currency bank accounts. Moreover, when shopping for a bank, ensure they support the currencies you plan to accept.

Using this type of account will save you a lot of money on currency conversion fees, as these types of accounts typically charge less whenever you want to convert your accounts’ currencies.

7 Best Online Banks for Freelancers

I’ll cover the best bank account for self-employed throughout this section. Each section will cover the various criteria that I’ve crafted in the previous section to help you better understand each freelancer bank.

1. Novo Online Business Bank Account: Best for Simplicity

Novo business banking quick overview:

  • FDIC insured
  • Refunds out-of-network ATM fees
  • Novo bank’s minimum balance is $0
  • Virtual debit card
bank novo logo

I highly recommend opening a Novo business checking account because they offer various features like a virtual freelancer debit card, card control, invoicing, and a reserves section.

The reserves section allows you to set money aside for whatever occasion. Whether it’s taxes, donations, business expenses, or paychecks. Whenever you want, you can release these reserves into your account.

Novo also has many offers for customers who maintain a certain business balance or spend a certain amount. For instance, you could get Google Ads credits.

Also, with Novo banking, you won’t have any fees except overdraft fees, which are $27 per transaction.

Novo offers two-factor authentication VIA SMS and email; however, they don’t have TOTP or biometrics. Also, they’re FDIC insured through their partner Middlesex Federal Savings. Moreover, their website uses the Secure Hash Algorithm (SHA)-256.

Pros

  • Excellent user experience on their website
  • Virtual debit card
  • Reserves feature is handy
  • Mobile check deposit
  • Integrations with Stripe, Wise, and more

Cons

  • Lack of decent 2FA options
  • No interest-bearing accounts
  • It doesn’t offer lines of credit or loans

2. Kabbage Business Checking Account: Best for Interest

Kabbage small business and self-employed banking overview:

  • 1.10% APY on bank balances up to $100000
  • FDIC insured through Green Dot Bank
  • Categories to organize your money
American express and Kabbage bank logo

What is Kabbage? It’s a subsidiary of American Express that gives contractors an online business bank account packed with features every freelancer could need. First, you can customize professional invoices or send customers a pay link.

Moreover, with a Kabbage bank account, you can apply for a line of credit between $1000 and $150000—something many services on this list don’t offer.

There aren’t any monthly, in-network, out-of-network, or replacement card fees. However, for foreign transactions, you’ll need to pay a fee of 3% of the transaction. Moreover, you will need to pay $25 per outgoing domestic wire. Also, cash deposit fees vary by retailer.

Kabbage doesn’t charge fees on in- and out-of-network ATM withdrawals. However, an out-of-network ATM provider may still charge you a fee. Moreover, they don’t have a maintenance fee.

Your Kabbage business checking account is FDIC insured through their partner, Green Dot Bank. Moreover, they use 128-bit encryption on their website to securely transfer your data. Otherwise, they don’t offer anything special regarding two-factor authentication.

Pros

  • Able to apply for a line of credit
  • Great interest-bearing account
  • Custom pay links

Cons

  • Not a real bank
  • No third-party integrations

3. Wise: Best for Receiving Multiple Currencies

Basics about Wise financial services:

  • Multi-currency accounts for over 53 currencies
  • Non-bank provider
  • Has some of the best currency exchange rates
Wise cards along with Wise application on desktop and mobile devices

If you’re receiving foreign currencies from clients, they’ll usually support sending it to Wise if they have experience working with foreign freelancers. Wise bank, formerly TransferWise, gives you a free banking routing number from the US, Singapore, the UK, and more.

The only fees you’ll need to pay are transfer fees and fees for withdrawing by using their debit card. I don’t recommend using their debit card for withdrawals because it’s $1.50 per withdrawal under $100. Moreover, they charge a 2% fee per transaction over $100.

Wait, you also will need to pay a 0.40% fee if you hold a balance of more than €15,000 in EUR. So, you might want to use Wise as a means to receive payments.

Wise isn’t FDIC insured. However, they store your money in multiple external accounts. Moreover, with logging in, you can either use SMS 2FA or download a mobile app and use it to “securely” log in.

Wise’s most notable and favorite feature is its multi-currency accounts. First off, you can hold and convert over 54 currencies. Then, if you don’t want to deal with currency conversion fees, you can put your foreign currencies to work and trade them for stocks.

Keep in mind that you’ll need to pay BlackRock, their investment management integration, a 0.15% fee annually when you hold currency as stock. Moreover, you’ll need to pay Wise a 0.40% fee annually, which will bring you to a total of 0.55% annually.

It could be a great way to diversify your assets and potentially make money.

Pros

  • No monthly fees for their features
  • One of the best accounts for receiving foreign currencies
  • Supports various currencies
  • Fantastic exchange rate
  • No fees, for the most part

Cons

  • Not a bank
  • Doesn’t give a reason to keep money in their accounts

4. Lili Online Business Bank Account: Best for Managing Overdrafts

Lili digital bank overview

  • FDIC insured through Choice Financial Group
  • Payment applications and platform integrations
  • Overdraft protection
  • Real-time alerts
  • Offers a virtual (digital) debit card
lili bank's website

If you’re familiar with the Freelancer’s Union, this organization recommends Lili bank as an ideal self-employed business checking account. I don’t know if that means anything to you, but it at least got me intrigued to research this service.

Within the app, you can organize your expenses by category. It’s a handy way to manage your expenses. Moreover, you can set up a tax bucket, which pulls money from your payments and sets it into a separate account that you can use for taxes.

There aren’t ATM fees at over 38000 machines throughout the US regarding fees. Moreover, they don’t have maintenance, overdraft, and foreign transaction fees. However, Lili does have a $2.50 out-of-network ATM fee if you’re within the US or $5 for ATMs outside the US.

You can also pay a monthly fee for Lili Pro, which gives you access to additional features like cashback rewards with over 14000 merchants, 1% APY with their savings account, and expense tracking, which are both excellent features for managing digital business expenses.

They also offer other features, but these are the best ones I could pull from their landing page. I recommend Lili Pro only if you shop with one of their merchants and set a fair sum aside into their savings account.

Lili’s FDIC insured through their banking partner. Moreover, they only offer email and SMS two-factor authentication.

Pros

  • Cashback rewards (Lili Pro)
  • Expense management, even though it’s a common feature among banks
  • No account fee
  • Overdraft protection up to $200
  • Digital debit card

Cons

  • Less than ideal out-of-network fee
  • Must pay a monthly fee for an interest-bearing account
  • Two-factor authentication options

5. Revolut: Best for Integrations

Revolut banking service overview:

  • Multi-currency account for over 30 currencies
  • Up to 200 virtual debit cards for your team
  • FDIC-insured through partner banks
  • Over 50000 fee-free ATMs
  • No hidden fees
revolut card and application on a mobile device

The 200 virtual debit cards are nice. However, if you want more digital cards, you can pair this service with Privacy.com, a burner debit card website.

With your Revolut freelancer account, you can also get up to three plastic cards per team member. However, if you want a stainless steel card for some reason, you’ll need to upgrade to a paid account.

With the free plan, you’ll get most of the features you need. However, you can upgrade to either of two premium plans to get features like overseas medical insurance, baggage and flight insurance, and more.

Pros

  • Supports cryptocurrency
  • Plenty of currencies accepted
  • Many virtual debit cards
  • It comes with travel insurance; though, I haven’t tested to see whether it’s worth the price

Cons

  • Must pay a subscription to access many features
  • Not the most remarkable customer service

6. Nearside Business Checking: Best Business Debit Card

Nearside digital bank features:

  • 2.2% cash back on select purchases
  • FDIC-insured through LendingClub Bank
  • Fee-free withdrawals from over 55000 ATMs
  • No minimum balance
nearside bank logo

The Nearside, formerly Hatch, business checking account gives you excellent debit card cashback rates if you don’t use business credit cards. 

With the 2.2% cashback, you can also get additional cashback from particular vendors. For instance, sometimes, you may be able to get 4% cashback when using your Nearside card to purchase Google Ads.

Speaking of vendors, a Nearside business checking account can also integrate with a ton of platforms. Some of these include Quickbooks, Shopify, Venmo, and Amazon. That way, you can sync your accounting and deal with less bookkeeping.

Moreover, they also have Sprout, which as of January 2022, is in beta. It’s a service that’ll help you register your Employer Identification Number (EIN), incorporate your business, and pay for half a year’s worth of registered agent fees.

At the moment, you can join Sprout’s waitlist.

Regarding security—Nearside is FDIC insured through the partner bank mentioned above. Moreover, their account logins support biometric authentication.

Nearside doesn’t have any fees except for out-of-network, which is $1.00 per withdrawal, and Stop Payment, which is $25.

Pros

  • 1-year warranty
  • AfforGreat cashback rates for business debit cards
  • Eventual business setup service
  • Various platform integrations
  • Many additional cashback rewards
  • Not too many fees

Cons

  • No reimbursement from out-of-network fees
  • Lack of funding options (e.g., loans)
  • $1000 transaction limit for the virtual card they provide until you receive your physical debit card

7. nbkc Bank Checking Account: Best Solutions for Businesses

nbkc bank quick facts:

  • FDIC insured
  • Reimburses ATM fees up to $12 globally
  • No minimum balance
  • Provides loans
nbkc bank's website

An nbkc bank checking account includes almost every feature a small business could need to survive.

First of all, if you want to put your money to work, you can sign up for a certificate of deposit (CD) and generate a max of 0.30% APY in interest. Unfortunately, some CDs have no deposit, while others require you to deposit $1000000. However, all their CD/IRA options only need a $0.01 balance to obtain APY.

Otherwise, you can get loans, sign up for a money market account, participate in mobile banking, and other features.

It’s FDIC insured up to $250000. Their website’s encrypted, and they use two-factor authentication to secure your account. As for information, they don’t lease or sell your data.

You can also purchase additional software (add ons) to make your business run smoother and secure your account. Some add ons include fraud tools and ACH credits.

nbkc doesn’t have any fees until you surpass the $12 in reimbursements for out-of-network fees. Also, they charge $45 per incoming international wire and $5 per outgoing wire.

Pros

  • They’ll refund up to $12 of out-of-network ATM fees globally
  • No maintenance fees
  • Available funding options
  • Provides interest-bearing accounts
  • Has autopay features for bills

Cons

  • No third-party integrations
  • It doesn’t support virtual debit cards
  • No ACH transfers to other bank accounts

Do You Need to Switch Banks Now?

No bank is perfect. However, if you build the proper criteria, you can come close or achieve finding the ideal digital bank for freelancers or small businesses.

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