If you’re read my post on how to run a side hustle you’d probably remember that I speak about opening a separate bank account for your business. This is quite easy and affordable if you’re operating as a sole proprietor (ie it’s just you and it’s not formally registered). If however you’ve registered your business on the CIPC, you’ll need a “real” business bank account, and that seems quite expensive and rather time-consuming to research. Here’s my findings on business bank accounts in South Africa.
As I am in the process of doing this research myself, I decided to share a post on it.
So, what is the best small business bank account in South Africa? Well, that depends on what you need….
My assumptions going into this exercise
My partner and I have started a small business together and although it’s very small right now, we’ve figured that we need the following from our business bank account:
- A debit card each (although we could probably share one to save costs),
- 30 x card swipes per month,
- 2 x card swipes per month for fuel,
- 2 x debit orders per month,
- 5 x EFT payments per month (including notifications to be sent),
- 1 x prepaid service per month.
Other things I’m looking at just for interest sake are the
- interest rates offered on the account (without needing a separate account),
- cost of SARS payments (as every business needs to pay SARS at some point).
My partner is a chef and part of his job is to buy ingredients for dinner parties, high teas, and catering events. Lots of swiping! Now of course you may have different needs so it’s good to draw up a list of what you believe your monthly transactions would be.
We for example don’t need to withdraw cash and we don’t envisage receiving cash. Customers pay us via bank payments so we don’t need to accept credit card payments nor online payments. We also don’t need credit, overdraft, or other features. In fact, we don’t need all that much from a business account.
Comparing business bank accounts
Using the above scenario, let’s see how various banks in South Africa compare. Remember that all banks have multiple accounts and options and it is a little tricky to fully compare like-to-like. However, the above transactions can be tallied up and a comparison figure drawn.
BankZero business account
BankZero is one of the “new kids” on the block so to speak. They operate as an app-based bank with no physical contact centres. High tech and a great competitor.
View the full Bank Zero pricing guide here
| Monthly account fee | R0 |
| 30 x card swipes | R0 |
| 2 x fuel swipes | R0 |
| 2 x debit orders to any bank | R0 |
| 5 x EFT payments to any bank (with notifications) | R0 |
| 1 x prepaid service | R0 |
| Total per month | R0 |
| First debit card | R79 |
| Second debit card | R100 for a second account R79 for the card |
| Interest rate on balance of R10k | 2.2% |
| Cost of payment to SARS | R0 |
BankZero is definitely the winner in terms of fees. This will do exactly what we need. The potential downsides are if a company ever requires physically stamped bank statements, although that seems to be quite a rare occurrence now days. Also, a big negative for me is that fact that cannot open a Bank Zero business account using my iPhone. This functionality is currently only available on Android.
The hack to open the BankZero business account on iOs is to pair your account with someones Android device. Open the business account, FICA, and then continue as per normal on your own device. Also obviously remove your details from your friends phone. I have not done this yet, but I may need to.
FNB Gold Business
FNB Business banking costs are quite steep and you will need at least the Gold Business account for a properly registered business. There are two options available – pay-as-you-go, or a single fee. Note that the bundle has some limitations and the comparison is based on the needs described in the introduction.
Click here for the full list of FNB Business Banking costs
| Pay-as-you-use | Single fee | |
|---|---|---|
| Monthly account fee | R80 | R265 |
| 30 x card swipes | R110.40 (R3.68 ea) | R0 |
| 2 x fuel swipes | R12 (R6 ea) | R0 |
| 2 x debit orders to any bank | R24 (R12 ea) | R0 |
| 5 x EFT payments to any bank (with notifications) | R40 (R8 ea) | R0 |
| 1 x prepaid service | R2.70 | R0 |
| Total per month | R269.10 | R265 |
| First debit card | R120 | R120 |
| Second debit card | R120 | R120 |
| Interest rate on balance of R10k | 0% | 0% |
| Cost of payment to SARS | R8 | R0 (in bundle) |
FNB is significantly more expensive but the one advantage is the ability to link your account to PayPal, which is something I have. Not worth the fees though I feel.
There are also other benefits linked to the account which may be useful to you. Things such as invoicing, direct linking to Sage Accounting, accounting reports, etc. Have a look to see what you may need as these value-add features are very useful and probably worth the money if you choose a DIY approach to accounting.
ABSA Business account
Take a look here for the full ABSA Business Evolve PAYT account pricing information.
| Monthly account fee | R85 |
| 30 x card swipes | R127 (R4.35 for first 20, R4.00 for next 20) |
| 2 x fuel swipes | R8 (sliding scale above) |
| 2 x debit orders to any bank | R39.50 (R19.75 ea) |
| 5 x EFT payments to any bank (with notifications) | R50 (R10 ea) |
| 1 x prepaid service | R10 (looks like) |
| Total per month | R319.50 |
| First debit card | R0 |
| Second debit card | Not clear on pricing |
| Interest rate on balance of R10k | 0% (not clear though) |
| Cost of payment to SARS | R19.75 |
The ABSA Evolve PAYT account is very expensive and not an option for us. It’s also not fully clear if the cost of debit cards is included or not.
There are also bundled options available but there are much higher fees should you exceed the limitations.
Standard Bank business current account
You can take a look at the full Standard Bank Business Current Account fees here.
| Monthly account fee | R85 |
| 30 x card swipes | R120 (R4 ea) |
| 2 x fuel swipes | R8 (R4 ea) |
| 2 x debit orders to any bank | R37 (R18.50 ea) |
| 5 x EFT payments to any bank (with notifications) | R35 (R7 ea) |
| 1 x prepaid service | R1.50 |
| Total per month | R286.50 |
| First debit card | R0 |
| Second debit card | Not clear on pricing |
| Interest rate on balance of R10k | 0% |
| Cost of payment to SARS | R18.50 |
The Standard Bank Business Current account is priced at the average price of it’s traditional competitors. I don’t see anything outstanding here to draw me to this account.
Nedbank business account
Like other banks, Nedbank offers a bundled solution as well as a pay-as-you-go product.
Nedbank business account pay-as-you-use pricing
Nedbank business account bundle fees
| Pay-as-you-go | Bundle 35 | |
|---|---|---|
| Monthly account fee | R60 | R259 |
| 30 x card swipes | R129 (R4.30 ea) | R55 (R11 ea) You get 35 transactions in total on this bundle |
| 2 x fuel swipes | R8.60 (R4.30 ea) | R0 |
| 2 x debit orders to any bank | R38 (R19 ea) | R0 |
| 5 x EFT payments to any bank (with notifications) | R41.75 (R8.35 ea) | R0 |
| 1 x prepaid service | R1.50 | R0 |
| Total per month | R278.85 | R314 |
| First debit card | R220 | R220 |
| Second debit card | R220 | R220 |
| Interest rate on balance of R10k | 0% | 0% |
| Cost of payment to SARS | R19 | R0 (in bundle) |
Like other banks listed, Nedbank charges high fees per card transaction as well as annual card fees and lost card replacement fees. Noting out of the ordinary compared to the traditional banks, but expensive based on what I need. The bundle doesn’t see to help as the out of bundle fees are higher.
Capitec business account
Capitec itself does not do business banking, but it bought out the Mercantile Bank which does. So, Mercantile and Capitec are “linked”.
Here are the full Mercantile business account fees
| Monthly account fee | R65 |
| 30 x card swipes | R150 (R5 ea) |
| 2 x fuel swipes | R10 (R5 ea) |
| 2 x debit orders to any bank | R10 (R5 ea) |
| 5 x EFT payments to any bank (with notifications) | R25 (R5 ea) |
| 1 x prepaid service | n/a |
| Total per month | R260 |
| First debit card | R0 |
| Second debit card | Not clear on pricing |
| Interest rate on balance of R10k | 0% |
| Cost of payment to SARS | R10 |
Mercantile bank is very expensive on the debit card transaction fees. Not a good option for me.
Business bank accounts in South Africa
This is not a comprehensive list of business bank accounts in South Africa, but it should give you a feel of what is out there.
To recap, based on my own requirement of business banking as set out in the start of this article, the banks have faired as followed regarding total monthly costs:
| Monthly cost for my set of transactions | Interest Rate on R10k balance in same account | |
|---|---|---|
| BankZero Business Account | R0.00 | 2.2% |
| Capitec Business Account / Mercantile Business Account | R260.00 | 0% |
| FNB Business Gold (single fee) | R265.00 | 0% |
| FNB Business Gold (pay-as you-use) | R269.10 | 0% |
| Nedbank Business Account (pay-as-you-go) | R278.85 | 0% |
| Standard Bank Business Current Account | R286.50 | 0% |
| Nedbank Business Account (Bundle 35) | R314.00 | 0% |
| ABSA Business Evolve PAYT | R319.50 | 0% |
There is clearly a huge jump from Bank Zero to the others. It is however vital that you compare these accounts based on your own requirements.
Work out whether you need cash withdrawals, overseas payments, forex, PayPal, debit orders, etc.
Also note that the majority of banks require a separate investment account in order to earn interest or grown on your money. These are often free, but not always. That requires some further research.
Hope that you find this info on business bank accounts useful. If you have queries, find errors, or wish me to add more banks, please add a comment or send me a message. I’m really trying to help you find the best small business bank account South Africa.
Excellent article and extremely useful. Thank you!
Thank you for this article but i have one question.
Why you didn’t include TymBank business account?
Great question! The TymeBank business account however is only for a sole proprietor and not a registered business. A sole proprietor is when an individual runs a business by themselves, in their personal capacity. The TymeBank business account is actually opened in ones personal capacity and is actually a personal account, it just gives you the option to keep you money separate. A formally registered business requires a bank account registered in the business name, with FICA for owners and directors. A lot more admin involved.