Best Bank Accounts for Sole Proprietors 2024

If you’re a Canadian sole proprietor you may be wondering about the very best bank accounts for sole traders, including options which allow international currency exchange and spending, cash deposits, checking services, overdrafts or other features. The good news is that Canada is well served for sole trader accounts – so the biggest challenge may be choosing the right one based on your own transaction needs.

This guide walks through some of the best accounts for Canadian sole traders, from banks like RBC and TD, and from online specialist alternatives like Wise, Loop and OFX.

Quick summary: Best bank accounts for sole traders

• Wise Business Account: Send, hold, spend or exchange 40+ currencies cheaply and easily

• Loop Business Account: Choose from three different account plans, no fee US, UK, EU bank accounts

• OFX Global Currency Account: Receive payments in 7 currencies from customers, PSPs and marketplaces

• TD Basic Business Plan: Low monthly fee, 5 free transactions per month and 5 free deposit items included per month

• RBC Digital Choice Business Account: No minimum balance, unlimited electronic debit and credit transactions, unlimited electronic cheque deposits

Do I need a business bank account for sole proprietorship?

No. You do not need a business bank account for a sole proprietorship in Canada. As a sole trader, your personal and business finances are viewed as the same thing – if you’re liable for a debt through your business activity, that liability still applies to you personally.

That said, even though it is not mandatory to have a business account as a sole trader, it is highly recommended. Having a business account means you can split out your personal and company financial matters, making it easier to monitor business performance and keep on top of your accounts.

What bank account can I use as a sole trader?

Sole traders in Canada usually have a few different options – the exact accounts available to you may depend on your situation, including the type of work you do. However, in many cases you’ll be able to choose:

• A business or start up account from a Canadian bank

• A personal account from a Canadian bank

• A business or personal account from an online alternative like Wise, Loop or OFX

Can a sole trader use a personal bank account?

Yes. A sole trader can use a personal bank account. This is because of the way sole traders are treated for tax – their personal and business dealings are seen as the same thing.

The downside of this is that keeping your personal spending money and your business profits in the same place can become very complicated and make it unnecessarily difficult to grow your business. Opening a dedicated business account simply makes life easier for most sole traders.

Best business checking accounts for sole proprietors in Canada

There’s no single best sole trader account in Canada, but there are plenty of options for you to review and compare. We’ve looked at some accounts from alternative providers like Wise and Loop, and also a couple of banks. Here’s a quick overview:

*Fees and information correct at time of writing – 21st October 2024

As you can see, some of the available features for sole proprietor accounts in Canada can vary quite a lot. So do the fees. This means it’s well worth weighing up a few different account options before you decide on the right one for you.

We’ve given a more detailed overview of the providers and banks we’ve profiled in the table, here:

Wise account

🏅 Great for: Sole proprietors who need to send, receive, hold, spend or exchange foreign currencies cheaply and easily

Sole traders in Canada can open either a Wise personal or business account, depending on which they prefer.

Wise accounts support 40+ currencies for holding and exchange, and support international money transfers to 160+ countries.

Currency exchange uses the mid-market exchange rate with low conversion fees from 0.33%, and accounts also offer options to receive payments with local and SWIFT account details in various currencies.

There’s no fee to open a personal account, and while there’s a one time charge of 42 CAD for a business account, you’ll get all the features of a personal account with some great extras. Issue debit and expense cards for yourself and your team, send batch payments, integrate with cloud accounting solutions and access a powerful API to streamline workflow.

Eligibility: Sole traders and freelancers in Canada and many other countries – apply for either a Business or Personal account depending on your needs. Learn more here Wise Business requirements.

Is Wise regulated in Canada?: Wise is registered with FINTRAC in Canada and also overseen by many other similar bodies around the world, wherever it offers services.

Best features of a Wise Business account

• Hold and exchange 40+ currencies with the mid-market rate and low fees

• Receive incoming foreign currency payments with local account details in 8+ currencies, and SWIFT details for additional currencies

• No ongoing fees, no minimum balance – just pay low transaction fees based on account use

Learn more: Wise Business Account Review

Loop Business account

🏅 Great for: Sole proprietors and small business owners who want a flexible, fee-free multi-currency account with transparent FX rates.

Loop is a Canadian fintech company offering an all-in-one business account designed to simplify banking for sole proprietors and businesses of all sizes. With no monthly or annual fees for the Basic plan, you can manage all your business finances in one place.

The Loop Business Account supports multiple currencies, including USD, EUR and GBP, eliminating around 5.67% on foreign exchange (FX) fees on cross-border transactions. It also comes with a Loop Credit Card, which offers a credit limit of up to $1 million and lets you earn points on every purchase, redeemable towards travel and other experiences.

Loop offers 3 different account tiers: Basic ($0/mo), Loop Plus ($49/mo), and Loop Power ($199/mo). Each plan comes with different benefits, including physical and virtual cards, and higher points-earning potential for paid plans.

Eligibility: Sole traders and small businesses in Canada.

Is Loop regulated in Canada?: Loop is a financial technology company based in Toronto, Ontario. Its Loop Card is issued by WFCU Credit Union Ltd., and its US Dollar Business Accounts are provided by Lewis & Clark Bank.

Best features of a Loop Business Account

• Multi-currency account with transparent FX rates on cross-border transactions

• Spend in CAD, USD, EUR or GBP with your Loop card without incurring FX fees

• Credit limit of up to $1 million

• No monthly or annual fees with the Basic plan

• Earn points on every purchase, with options to redeem for travel or experiences

• Easy integration with accounting software like QuickBooks and Xero

Learn more: Loop Business Account

OFX account

🏅 Great for: Ecommerce sellers and digital businesses getting paid by customers, PSPs and marketplaces in 7 major currencies

OFX is a currency specialist operating in Canada and many other countries globally. Business customers and sole traders can open a Global Currency

Account to get local account details in 7 currencies, to receive payments from abroad.

You can use your account details for invoices, PSPs and marketplaces, and either hold your balance in a foreign currency, convert and withdraw to CAD, or send to others – to pay taxes or suppliers for example.

OFX has a strong reputation for customer service, and offers a 24/7 phone line as well as self service online and in app options.

Eligibility: Sole traders, ecommerce sellers and similar business types, in Canada and many other countries

Is OFX safe to use?: OFX is regulated in Canada and everywhere else that services are available

Best features of a OFX Business account

• Get paid, from 30+ countries, and pay others easily in 50+ currencies

• No ongoing costs, no minimum balance

• Well established business with great customer support through personal brokers

Learn more; OFX Business Account Review

TD Basic Business Plan account

🏅 Great for: Sole proprietors and small business owners who want a low-fee account with essential banking services.

The TD Basic Business Plan comes with a low monthly fee of $5 and is ideal for businesses with only a few monthly transactions. You can make deposits via TD Mobile Deposit and have access to free online statements with cheque images.

All deposits made through debit and credit POS terminals are also automatically credited to your TD Canada Trust business chequing account.

While the TD Basic Business Plan includes 5 free transactions and 5 free deposit items per month, businesses with more frequent transactions might find it limiting. To open an account, you can contact a TD Account Manager or visit a TD Small Business Advice Centre.

Eligibility: Sole proprietors and small businesses in Canada.

Is TD Bank regulated in Canada?: As one of Canada’s largest banks, TD Canada Trust is regulated by the Office of the Superintendent of Financial Institutions (OSFI).

Best features of a TD Basic Business Plan

• Low $5 monthly fee

• 5 free transactions and 5 free deposit items per month

• Manage deposits easily via TD Mobile Deposit

• Free online statements with cheque images

Learn more: TD Business Account

RBC Digital Choice Business account

🏅 Great for: Sole proprietors and small business owners looking for unlimited digital transactions.

The RBC Digital Choice Business Account comes with a monthly fee of $6 and offers unlimited electronic debit and credit transactions, unlimited cheque deposits, and 10 free Interac e-Transfers per month.

There’s no minimum balance required to open or maintain the account either, which could make it an attractive choice for small businesses.

Through RBC’s Online Banking platform, you can pay employees and vendors, manage tax payments, and request payments from customers. However, while you can apply for the account online in less than 15 minutes, you’ll need to visit an RBC branch to activate your account.

Eligibility: Sole proprietors and businesses in Canada.

Is RBC regulated in Canada?: RBC is one of Canada’s leading financial institutions and is regulated by the Office of the Superintendent of Financial Institutions (OSFI).

Best features of an RBC Digital Choice Business Account

• Unlimited electronic debit and credit transactions

• Unlimited electronic cheque deposits and Moneris deposits

• 10 free Interac e-Transfers per month

• No minimum balance required to open or maintain the account

Learn more: RBC Business Accounts

Best online business accounts for sole proprietorship

All of the accounts we’ve highlighted above are digital products, either offered through online specialists which have no branch network, or Canadian banks which also offer digital products. Here’s a roundup of best online business accounts:

• Wise Business Account: Digital only specialist provider, services online and in app

• OFX Global Currency Account: Digital first specialist provider, services by phone, online and in app

• Loop Business Account: Digital only specialist provider, services online and in app

• TD Basic Business Plan: Access services online, in app and in branches

• RBC Digital Choice Business Account: Access services online, in app and in branches

Fees for business checking accounts for sole proprietorship

Pretty much all sole trader accounts will come with various fees, which you’ll need to consider before opening. Because different banks and alternative providers have their own approach to fees, it can be tricky to compare one option to another – make sure you review all ongoing and service fees for the types of transactions you’ll make often. We’ve covered a few here – but other fees may apply depending on how you use your account, so looking carefully at the small print is essential.

*Fees and information correct at time of writing – 21st October 2024

How to open a business account as a sole proprietor online

How you open your business account will depend on the provider or bank you pick.

Here’s a look at step by step how to open a business checking account online or in a branch:

1. Choose the account you want to open

If you’re opening online, download the provider’s app or open the desktop site, and check your eligibility. If the provider requires you to visit a branch, make an appointment to save time when you arrive.

2. Gather all the documents and paperwork needed

You’ll need to be verified as part of your application, which means providing personal and business documents. We’ll cover what’s usually required in just a moment. Pull together the documents needed to open a business account to save time later.

3. Fill out the application in person or online

If you’re opening your account digitally just follow the prompts to give your personal and business details – in a branch the team member will walk you through what’s needed.

4. Complete the verification step by handing over or uploading the documents requested

You should have all your paperwork prepared so you can simply follow the prompts to upload images of your paperwork if you’re applying online. In a branch you can hand over your documents to the team member.

5. Pay any required account opening fee or add money to your account if a minimum deposit is required

Different banks and providers have their own minimum balance requirements – or no minimum balance may be mandated when you open your account. Just add what you need to start transacting.

Sole proprietorship checking bank account requirements

There are a few common eligibility requirements – and you’ll also need to have a stack of paperwork and some key information on hand when you apply.

Here are some common requirements to bear in mind:

• Age: Usually you must be 18 or over to open your account

• Residency: Many bank accounts are only available if you’re a Canadian resident. Options, features and fees may vary depending on where in Canada you live

• Business turnover: Some accounts are only available to people with a set level of annual turnover

• Business types: It is common to find that providers can’t offer accounts to all business types – if you’re involved in crypto trading, gambling or other regulated markets you may need a specific account type for example

Here’s a look at the documents and information usually needed to open a Canadian business account:

• Your full name and date of birth

• Your contact information and address

• Proof of ID and address – often a passport for ID, and a utility bill for address

• Your SIN or business CRA

• Information about your business such as address and any assumed name

• Business license

Related: Requirements to open a business bank account in Canada

What type of checking account is best for sole proprietorship?

There’s no single account that’s best for all sole traders in Canada – different people have their own needs and preferences. Instead, you’ll want to compare a few different account types and options to find one which most closely matches your requirements. Here are a few common things to think about:

International features

If you have customers, suppliers, contractors or team members overseas, you could benefit from a sole trader account with strong international features.

Options may include holding a foreign currency balance, sending international payments, and receiving overseas payments with local or SWIFT account details.

• Wise supports 40+ accounts for holding and exchange with local and SWIFT details for receiving payments from abroad

• OFX has local account details in 7 currencies which you can use with PSPs and marketplaces – or add to your invoices to get paid easily

• Loop is a multi-currency account that comes with free USD, EUR and GBP accounts for making and receiving payments

Wise and OFX are two of the best international money transfer apps in Canada, if you’d like to learn more this guide can help: Best money transfer apps for business

Cash and check deposit options

If your business needs ways to deposit cash or checks you may be best off with a business account from a bank which offers branch services. Compare fees for this – most banks and providers have some sort of charge for cash deposits for example.

• Electronic cheque deposits are unlimited with RBC

• Get 5 cheque and cash deposits for free per month with TD Bank before paying fees

No ongoing fees

Ongoing fees can eat away at the profits your business makes. If you’re not

completely sure you’ll use all the features your business account gives you, you might choose an account with no monthly fees so you can test drive features with less risk.

• Wise has no ongoing fees – Loop also has a basic fee-free account with no monthly charges, and both offer impressive international features

• RBC and TD Bank offer ways to deposit cash or checks, alongside other features, but both come with monthly account maintenance fees

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Does a sole proprietor need a CRA business number?

Not all sole proprietors will need a CRA (Canada Revenue Agency) business number. However, this very much depends on the nature of your business activities. In general, sole proprietors do not automatically require a business number unless they engage in specific activities that trigger the need for one. These include:

• Payroll Accounts: If you plan on hiring employees

• GST/HST Registration: If your business earns more than $30,000 in gross revenue in a single calendar year, you’ll need to register for GST/HST and will be assigned a business number.

• Import/Export Activities: If you import or export goods, you’ll need a CRA business number to deal with customs and other related matters.

If your sole proprietorship doesn't engage in any of these activities, you won't need a CRA business number. However, registering for one can still be beneficial for record-keeping and tax purposes.

Conclusion: What is the best bank for the self-employed?

There’s no single best account for Canadian sole traders and self employed people. The right one for you will depend on how you need to transact – but as both banks and online alternative providers have quite varied features and fees, shopping around is essential to get the right option for you.

Consider both bank business accounts and online specialist alternatives.

• If you need to pay and get paid in foreign currencies, Wise could be a good fit, with both Wise personal and business account options available for sole traders.

• If you’re thinking of a multi-currency account with varied account tiers and fees, Loop may be a good pick, with 3 different personal account types – all with their own unique combinations of features.

Use this guide to start your research and select the very best sole trader account for your needs.