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If you’re running a business in Canada, you might be wondering—do you really need a business bank account, or can you just use my personal one?

While it’s not legally required for every business, having a separate business account can make a huge difference when it comes to bookkeeping, tax filing, and keeping things organized.

Let's break this down!

What Is a Business Bank Account?

A business bank account is an account specifically designed for business transactions. 

It allows you to keep your company’s finances separate from your personal money, making it easier to track income, expenses, and taxes.

While it works similarly to a personal account, there are a few key differences.

Fees

Business accounts often have higher monthly fees, but they also come with features tailored to businesses.

Features and Tools

Many business accounts provide features or a number of included transactions within their monthly fee structure. For example you might get a business account with unlimited electronic debit and credit transactions or free outgoing Interac e-Transfers.  

Some accounts also make it easy to pay your business taxes directly within the online platform.

Compliance

And if you run a corporation, you’re expected to keep business finances separate for tax and legal reasons.

Not every business HAS to open a business account, but in most cases, it’s a smart move. 

Why You Should Have a Separate Business Account

When you're already juggling a million things in your business, the last thing you want is to have to open and manage a new bank account. One more login, another monthly fee… why not just keep everything in one place and sort it out later? Seems easier, right?

Until it’s not.

As soon as you start making sales, paying for expenses, or dealing with taxes, things can get confusing—fast. Here's why:

1. Bookkeeping Becomes a Headache

When personal and business transactions are mixed, tracking everything becomes a challenge. If you're handling the books yourself, you'll spend a ton of time trying to figure out what's for business and what's personal.

“Was this Amazon charge for office supplies or a personal order?” “Did this restaurant bill include a client meeting, or was it just dinner with friends?”

And if you’ve hired a bookkeeper or accountant, you’ll end up paying extra for all the back-and-forth as they sort through transactions.

2. You Could Be Leaving Money on the Table

When tax season rolls around, you need a clear record of your income and expenses. When business expenses get buried in personal transactions, it’s easy to miss out on tax deductions you should be claiming. And if you misreport things to the CRA? That could mean penalties—or even an audit.

3. It’s harder to track cash flow

When personal and business expenses are mixed, it’s tough to know how much money you really have for your business.

You might think you have more funds available than you do—or worse, accidentally dip into business cash for personal expenses. That could leave you scrambling when it’s time to pay suppliers or employees.

A separate business account gives you a clearer picture of your finances, helping you stay on top of what’s available for your business needs.

Do You Need a Specific "Business" Account?

Next, let’s look at whether you should have an official business account or if a personal-style account can work just as well.

Sole Proprietors

If you operate your business as a sole proprietor, you can technically use a personal style account for business transactions. 

However, this can sometimes create confusion when tracking expenses if you have personal transactions mixed in.

Plus you may end up paying more in fees for the personal account due to the volume of transactions that often go along with running a business.

Corporations

If your business is incorporated, you should definitely open a business bank account in the company’s name. 

A corporation is a separate legal entity, and mixing business funds with a personal account could cause tax and legal issues.  

One exception to this is when getting a credit card for your brand new business - I’ll explain more about that down below.

Personal-Style Accounts vs. Business Accounts

Some banks offer personal-style accounts with business-friendly features, but they may lack key tools like:

• Business tax payment options
• The ability to process payments under your company name
• Dedicated business banking support

So while a personal account might work for some small businesses, a dedicated business account is the smarter choice in most cases. 

Can a Corporation Use a Shareholder’s Personal Account?

Some incorporated business owners wonder if they can just use a shareholder’s personal bank account instead of opening a business account in the corporation’s name. While it might seem simpler, it’s not a good idea.

Legal and Tax Issues

A corporation is a separate legal entity, meaning its money belongs to the company, not the shareholders. 

Using a personal account for corporate funds can blur this distinction, leading to potential legal and tax complications.

CRA Considerations

The Canada Revenue Agency (CRA) expects corporations to keep clear records of their income and expenses. 

If business transactions run through a shareholder’s personal account, it can be harder to prove what belongs to the business, increasing the risk of tax audits and compliance issues.

Risk of Mismanaging Corporate Funds

Mixing corporate and personal funds makes it easy to lose track of expenses or accidentally use corporate funds for personal purchases. This can create financial and bookkeeping headaches, as well as potential legal risks if the corporation is ever audited or involved in a legal dispute.

To avoid these issues, it’s best for a corporation to have its own dedicated business bank account.

What If Your New Business Can’t Get a Credit Card?

New businesses often struggle to get approved for a business credit card because they don’t have an established credit history. 

Banks typically require financial statements or a personal guarantee, or both, which can make it difficult for startups to qualify.

Fortunately, there are a few workarounds to manage business expenses without an official business credit card.

Use a Personal Credit Card Exclusively for Business

If you can’t get a business credit card right away, one option is to use a personal credit card ONLY for business expenses. 

This helps keep business and personal spending separate for bookkeeping and tax purposes. Just be mindful that mixing business and personal expenses could create issues if not tracked properly.

Secured Business Credit Cards

Some banks offer secured business credit cards, which require a cash deposit as collateral. These are easier to qualify for and can help build your company’s credit over time, but they do tie up some funds with that deposit.

Corporate Prepaid Cards

Another option is a corporate prepaid card. These function like debit cards but can be used anywhere that accepts a standard credit card. They allow you to load funds in advance, giving you control over spending without needing a credit check.

If your business is just starting out, these alternatives can help you manage expenses until you qualify for a traditional business credit card.

Our Business Bank Account Recommendations

Now that we’ve covered why a business bank account is a good idea, let’s look at a couple of solid options from RBC. These accounts offer different features depending on how your business operates.

- Best for startups and businesses that prefer to bank online

If your business runs mostly online and you don’t deal with cash very often, the could be a great fit. 

It’s one of RBC’s most affordable business banking options, with a smaller monthly fee and unlimited electronic transactions.

For $6 a month, you get:

• Unlimited electronic debit and credit transactions
• 10 free outgoing Interac e-Transfers each month (after that, they’re $1.50 each)
• Unlimited electronic cheque deposits through the RBC Mobile App or an ATM
• Full online and mobile banking access so you can manage your finances 24/7

One thing to keep in mind is that if your business handles cash or paper transactions, you’ll pay extra with this account. Depositing cash in-branch costs $5.00 per $1,000, and each paper deposit or credit transaction is $2.50.

This account is a great choice for freelancers, consultants, or any business that mainly deals with electronic payments.

- Best for Small Businesses with In-Branch Banking Needs

If your business does a mix of online and in-person banking, the could be a better fit. This account gives you the flexibility to bank the way you want while only paying for the transactions you use.

For $7 a month, you get:

• No limits on transactions - you only pay for what you use
• Unlimited deposits from Moneris if you accept debit and credit card payments
• No minimum balance requirement
• Online and mobile banking access
• Preferred pricing on cash deposits at RBC ATMs

Since this account follows a pay-as-you-go model, there are extra fees for certain transactions. 

Electronic deposits are $0.75 each, paper transactions cost $1.25, and Interac e-Transfers are $1.50.  Cash deposits cost $2.50 per $1,000 in-branch and $2.25 per $1,000 via ATM.

This account works well for businesses that need the option to visit a branch but want to keep costs low.

Both of these options offer a solid mix of flexibility and essential business banking tools. 

Final Thoughts

A separate business bank account is a simple way to stay organized, simplify tax filing, and protect your business.

If you need help setting up your business finances, - we’d love to help!