More and more Canadians are learning how to hustle, with an estimated 28% of Canadians taking on short-term or freelance work, according to an H&R Block study. Gig work can be great for supplementing your income or paying for unexpected expenses, but you may want to keep that income separate from your personal bank account; it makes filing your taxes a lot easier.
If you’re ready to take the next step and open a bank account specifically dedicated to your side hustle, you have some great options. Before you apply for a chequing, savings, or business account, do a little research on each account’s fees, transaction rules, interest rates, and perks. To get you started, we’ve listed some of the best chequing accounts and savings accounts to consider so you can make the most of your earnings.
What is the best personal bank account for a side hustle in Canada?
The EQ Personal Bank Account is the account for a side hustle since it combines high savings rates with unlimited chequing transactions. You’ll even earn cash back when you use the account’s reloadable prepaid Mastercard.
Best overall: EQ Personal Bank Account
Best for investors: Wealthsimple Chequing
Best for high interest: Simplii Financial High Interest Savings Account
Best for existing RBC customers: RBC Digital Choice Business Bank Account
Best for someone growing their side hustle: Alterna Small Business e-Chequing Account
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EQ Bank Personal Account
Best for: Someone looking for an account with chequing and savings features
EQ Bank sells this as a personal account that acts like a chequing account but earns like a savings account. If you’re looking for the best of both worlds, this is it. Like previous options, there’s no fee, unlimited transactions, and fantastic interest rates. The base rate is 1%, but if you deposit at least $2,000 into the account every month, your rate jumps to 2.75%. You’ll even earn cash back when using your reloadable prepaid card.
Pros:
Earn 0.5% cash back on purchases made with the prepaid Mastercard
No minimum balance requirement to earn the high 2.75% interest rate
No tiered interest rates to worry about
Cons:
Not able to deposit cash since it’s an online-only bank
No welcome bonus offered
Prepaid Mastercard doesn’t build credit
Wealthsimple Chequing
Best for: Someone who wants to save and manage their investments
Wealthsimple Chequing (previously Wealthsimple Cash) is a personal chequing account that offers high interest rates and a simple path to investing—it’s easy to set up auto-buy for stocks, crypto, and ETFs. If you primarily want to earn interest on your cash deposits, your funds earn between 1.25% to 1.75% interest (the rate is based on your total assets with Wealthsimple). As a no-fee account, Wealthsimple Chequing comes with lots of benefits like free Interac e-Transfers (up to $25,000 daily), bill payments, and a prepaid Mastercard.
Pros:
Mobile cheque deposit
Free and instant cash deposits through Canada Post
Opportunities to earn more interest by setting up direct deposit
Cons:
Highest interest rate requires having over $100,000 in assets
Prepaid Mastercard doesn’t build credit score
Prepaid Mastercard doesn’t come with access to credit
Simplii Financial High Interest Savings Account
Best for: Someone who wants a simple savings account with a high interest rate
From no monthly fees to unlimited transactions, including Interac e-Transfer, you get all your basic banking needs with this savings account. Plus, you can open as many savings accounts as you want using the bank’s intuitive website or mobile app—allowing you to have separate side hustle and personal accounts. This simple savings account has few perks or benefits, but the high promotional interest rate makes it worth looking into.
Pros:
One of the most competitive interest rates in Canada
Manage the account online or through the highly-rated mobile app
CDIC protection for your deposit
Cons:
Promotional interest rate only lasts 5 months
0.3% to 1% interest after promo ends
Can only access funds by transferring them to a Simplii chequing account
What is the best business bank account for a side hustle?
While incorporated companies are required to have a business account in Canada, most people with a side hustle can simply use personal bank accounts. That said, if you’re looking for specific features, like the ability to easily prepare tax documents, a business account might be the way to go.
RBC Digital Choice Business Bank Account Package
Best for: Someone who primarily uses electronic banking to receive payments
If you’re primarily paid electronically, especially through Moneris, you’ll want to consider this RBC bank account package. Although you don’t earn interest on your balance, it’s easy to receive electronic payments—Moneris payments are processed the very next day. Plus, RBC allows you to quickly transfer funds between your business and personal accounts. When you’re ready to withdraw funds, you have access to over 4,000 ATMS.
Pros:
Access to youth mentoring and financing with Futurpreneur
Instant 3-cents off per litre at Petro-Canada when you link your RBC business card
Discount offers for Xero and ADP
Cons:
Charges fees for in-person and ATM cash deposits
High wire transfer and fx fees
Balance doesn’t earn interest
Alterna Small Business e-Chequing Account
Best for: Someone looking to grow their side hustle
If you want to do more with your successful side hustle than just receive payments and earn interest, the Alterna Small Business e-Chequing Account can give you the tools you need to build your business. The account’s low fees are great selling features, but the account really shines with its benefits. You’ll get a variety of digital payment processing methods and payroll services (if you decide to contract out work in the future). And, you’ll have the opportunity to apply for a small business loan between $500 and $300,000.
Pros:
Low fees and low balance requirements for the monthly fee waiver
Access to valuable business tools like loans and payroll
Digital platform that’s easy to use
Cons:
No in-branch access
Charges $2 fee for in-person cash deposit
Limited number of outgoing e-Transfers every month
Do you need a personal or business account?
Since business bank accounts cost monthly fees to maintain, first ask yourself if you need one. If you work casually under your own name as a side hustler or sole proprietor, you’ll most likely get the banking features you need by signing up for a personal chequing or savings account. Just be sure to check for perks and features before committing to one.
If you operate under a business name, it’s considered more than a side hustle and you’re required to use a business bank account. There are other instances when a business account might be better for you—maybe you’re growing your gig’s customer base in the hope of establishing a full-on business one day.
What is a sole proprietorship?
A sole proprietorship is an unincorporated business owned by one person. If you’re a side hustler, you might choose this designation for your business by using your legal name or a trade name. In some cases, you may receive a federal business number once you register.
How to choose a bank account for your side hustle
Once you’ve decided to get a business or personal account, you can continue narrowing down your options. Comparing these factors can help you find the best account for your exact side hustle:
Access to your funds: Is the account online only? Learn whether you can use select ATMs to access your money. If you’re primarily using electronic transfers, ask about processing times and whether or not you’ll get a card to withdraw funds.
Monthly fees: You don’t want high monthly fees or account maintenance fees cutting into your side hustle revenue, so prioritize free or low-cost accounts.
Transaction limits: Pay attention to how many transactions you process or receive every month. If it’s a low number, any account should work. Otherwise, you’ll want one with unlimited transactions.
e-Transfers: If you’re working with clients across Canada or around the world, find out how many e-Transfers are included, if there are fees, or if there are caps on the amounts you can send or receive.
Interest rates: To earn the most interest on your deposits, find out if you have to meet a minimum balance or learn if the interest rate is for a limited time only.
Cash or mobile deposits: Paid in cash? Find out if the account allows you to deposit funds into ATMS, especially if you’re considering an online-only bank. If you usually receive cheques, see if mobile deposit is available.
Ask yourself how each specific account you’re comparing can help you achieve your financial goals. For instance, if you’re trying to save a lot for a short-term goal, you might choose an account like the Simplii Financial High Interest Savings Account, which has a generous but limited-time interest rate.
On the other hand, if you want to grow your gig into a legitimate business, you might decide it’s worth it to open a business account with low monthly fees (while you’re getting started). Evaluating your needs and comparing them to account features can help you choose one that aligns with your goals.
FAQ
What bank is best for a small business account?
We’re not going to choose a single best bank since your options are so varied and your banking needs are so personal. For instance, you could consider an online bank if you’re tech-savvy and like managing your side gig on the go, or you could look into a traditional bank for more customer support or an explanation of business tools that come with the account.
Do I need a business bank account for my side hustle?
Whether or not you need a business bank account for a side hustle is your decision. If you are pretty casual about gig work and your income from it is low, you might enjoy the convenience of using a personal bank account. On the other hand, if you’re growing your side hustle, you might want the tools and resources of a business bank account.
Do I need a business account for a sole proprietorship?
Sole proprietors aren’t required to use business accounts, but you may find that a business account is useful to have. Specifically, it can help you track expenses and streamline documentation, which makes tax time easier.
Are business bank account fees tax-deductible?
Yes, if you have a business bank account for your side hustle, you can deduct the fees when tax time rolls around. Just be sure to keep documentation of the charges and fees you incur.
