The Best Online Banks For Entrepreneurs & Small Businesses 2020

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best online banks

Standing in a line for hours, submitting an endless amount of paperwork, waiting forever to get anything done, paying ridiculous fees for every action..Sounds like your bank?

If that's the case, this post about the best online banks 2020 will help you realize you don't have to put up with that anymore. There are way better banking alternatives out there!

Despite the reign of internet and smart solutions, many traditional banks are still doing things in their tired archaic ways.

Even more, many traditional banks don’t really understand the concept of digital nomads and self-employed people. Opening an account in such banks can be a real nightmare for a small business owner. Or it will take a month to get the account up and running.

Luckily, this is where modern online banks come to rescue. In 2020, we have a vast selection of 100% digital banks that are perfect for any entrepreneur, including freelancers and small business owners.

So, what are the best online banks? Well, that's what this post is all about. Further down, you'll find the complete list of the top online banks 2020.

How Online Banks Work

Online banks are not just banks that simply allows online banking.

Online banks are fully digital banking solutions that enable you to do everything you would do in a regular bank: open an account, send and receive payments anywhere in the world, have a debit card, etc.

But the difference lies in convenience, speed, and simplicity:

  • 100% online: In order to open an account, you never have to go to a physical branch. Actually, online banks don’t have physical branches!
  • No crazy paperwork: At most, you need to do a simple identification by showing your document, but that’s pretty much the extent of paperwork you’d encounter.
  • Takes 5 minutes: You can open an account within a few minutes and without any hassle. After opening your account, you’ll be able to handle all of your financial affairs from a single app.

Besides the simplicity of opening an account, these banking apps are completely secure (as secure as your regular bank’s site) and incredibly easy to use. On top of that, online banks tend to offer better pricing and exchange rates than your dinosaur of a bank would.

5 Best Online Banks for Entrepreneurs 🏆

By 2020, even some bigger traditional banks have upgraded their systems in order to provide more flexible banking solutions to modern entrepreneurs. Thanks to this, there are plenty of online banks available for companies in every corner of the world, whether you’re from the US or Europe.

However, when it comes down to the best of the best, there are 5 online banks that really stand out among the rest due to their greater functionality, better apps, fair pricing or other features.

I’ve reviewed these 5 below, so you could figure out which online bank is the best for your business.

The Best Online Bank Accounts 2020

1. Revolut: all around the best online bank

British company Revolut has taken the world of banking by storm. Launched in 2015, the company made waves almost instantly thanks to their quite noble goal: to bring your whole financial life into one easy-to-use app.

Over the last 5 years, Revolut has been trusted by more than 250 000 companies all over the world due to great functionality and fair pricing.

I'm personally using Revolut Business for my company and I'm very happy with that jump. Moving from my old traditional bank to Revolut, saves us money in the 5 figure range every year, but more importantly, we're saving a tremendous amount of time. Things just always work, smooth UI, handy API to automate things – thank you Revolut.

🔑 Notable features

  • Starts from 0 € per month
  • Physical corporate cards and virtual cards
  • IBANs in up to 28 currencies
  • Account permissions for your team members
  • Euro Direct Debits and automated payments
  • Bulk payments

Open account

💰 Pricing and fees

Monthly feeFrom 0€/mo
Business debit cardFree
ATM withdrawal fee2%
Foreign exchange fees0.4% markup above your free FX allowance
Local transfers5 free transfers, the rest: 0.2€
International transfers3 €

➡️ Why Revolut might work for you

These features are just the tip of the iceberg. What attracts me the most about Revolut’s business solution, is their incredibly easy user interface.

It can take just 5 seconds to send a payment.

Once you’ve set up your beneficiaries, you barely need to do more than enter the amount and confirm the payment. It really is that easy!

On top of their great design, user-friendliness and tons of features (with more and more added all the time), Revolut is authorized by the FCA and holds client funds in tier-1 partner banks, so you never have to worry about the safety of your funds in Revolut.

Once you go to Revolut, you never go back to traditional banking.

2. TransferWise: best for money transfers

TransferWise is a company that’s larger than life. Their revolutionary approach is called the “TransferWise movement” and even big banks are literally scared of them. Created in 2010 by two Estonian friends, the company now moves more than 4 billion dollars every month.

At the root of the company lies a simple principle: providing fair and low-cost money transfers, without all the hidden fees and crazy hassle you’d end up with at a traditional bank.

In many ways, TransferWise paved the way for all the modern online banks we know and love today.

🔑 Notable features

  • Possible to hold over 40 currencies
  • Free to open an account, free debit card, no monthly fee
  • UK, US, European or Australian account
  • Bulk payments
  • Xero integration

Open account

💰 Pricing and fees

Monthly fee0 €
Business debit cardFree
ATM withdrawal feeFree up to £200, otherwise 2%
Currency conversion0.33%-3.56%

➡️ Why TransferWise might work for you

TransferWise truly does open borders for businesses. No matter where you’re from, anyone can open an account in just a few minutes and send or receive money anywhere in the world. Payments work quickly and you’ll always have a fair exchange price, just like you should.

The company’s flexibility doesn’t end there. TransferWise works for any kind of company. Whether you’re a freelancer, a digital nomad, small or medium-sized company owner or you run a bigger enterprise, there’s a solution for every business.

That flexibility alone is a reason enough to call TransferWise one of the best online banks for small businesses and bigger enterprises alike.

3. N26: best for freelancers

N26, launched in 2013, is one of the first European all-digital banks that brought a much-needed freshness to the European banking world.

Their main strength lies in the banking app which is more than revolutionary: it’s so user-friendly that it set somewhat of a standard on what consumers would expect to see from their banking app.

From locking your card and getting overdraft to keeping a very detailed overview of your spending: you can do everything with just one tap in the app.

🔑 Notable features

  • Meant for freelancers and self-employed people
  • Cashback on all purchases
  • Free Mastercard
  • Automatic categorization on your spending
  • No minimum deposit requirement

Open account

💰 Pricing and fees

Monthly feeFrom 0€
Business debit cardFree
Replacement card10 €
ATM withdrawal feeUp to 5 free € withdrawals, 1.7% for foreign currency
Foreign exchange feesNo extra foreign exchange rate fees
Local transfersFree

➡️ Why N26 might work for you

In comparison to Revolut and TransferWise, N26 might be a little limited since it’s only meant for freelancers and self-employed people that reside in Europe. The latter condition comes from the simple fact that N26 holds a European banking license, allowing them to offer their service only to people coming from EEA countries. You can only open an N26 account if you’re doing business under your own name, meaning you can’t open an account for a company.

Despite this limitation, N26 is perfect for people who are just starting up their ventures. If you’re a digital nomad or a freelancer who’s just getting started, N26 offers a great opportunity to open a business account without all the insane paperwork you’d encounter in regular banks.

On top of that, N26 doesn’t have any initial deposit requirements, so you can really just open a business account when you start your venture. N26 is quite possibly the best online bank for freelancers!

4. CurrencyFair: best online bank for expats

In many ways, CurrencyFair is similar to TransferWise. This Irish company has successfully operated for 9 years and deals primarily with international money transfers, offering fair exchange rates.

In its core, CurrencyFair is a marketplace: you send your money to them and they will do the currency exchange, but you’ll set the rate you like. Then a matching rate will be found from the marketplace, resulting in a better exchange rate. It works just like a peer-to-peer platform!

🔑 Notable features

  • Get payments from over 150 countries
  • Send payments in 20 currencies
  • Opening a business account is free
  • Very competitive exchange rates

Open account

💰 Pricing and fees

Monthly fee0 €
Business debit cardNo card
Transfer fee3 €
Exchange fee0.1% – 0.6%

➡️ Why CurrencyFair might work for you

CurrencyFair works best for companies that deal with payments from many different countries and currencies. After all, in those cases, you want to get the best exchange rate possible and that’s exactly what CurrencyFair offers.

Though it might not have so elaborate functions as some other online banks, it’s more of a niche-bank that’s built on one main principle: fair money transfers. Whether you’re a freelancer or a small business owner, CurrencyFair works for anyone who deals with many international payments.

5. Monese: best online bank for UK-based businesses

Monese is another great online bank that provides heavy competition to Revolut with its incredibly easy user interface.

Monese is built on the idea of providing instant banking without any paperwork or proofs. For that reason, it has become one of the preferred choices for expats in the UK as Monese provides you a legitimate UK bank account within just a few minutes.

Launched in 2015, Monese hosts more than 3 billion dollars worth of payments each year and sees about 3000 new signups daily. It’s slowly taking over Europe!

🔑 Notable features

  • Meant for UK-registered businesses
  • Free contactless card
  • One monthly fee: £9.95
  • Cash deposits
  • Available in 14 languages

Open account

💰 Pricing and fees

Monthly fee£9.95
Business debit cardFree
ATM withdrawal fee6 free transactions, then £1 per withdrawal
Currency exchangeMastercard wholesale exchange rate + 0.5% of the transaction value
Local and global transfersFree

➡️ Why Monese might work for you

At the moment, Monese is limited to only UK-based businesses but if you’re from the UK and you’re tired of archaic banks with mile-long paperwork and hefty fees, you might want to switch to Monese. Opening an account takes barely any time and you’ll have a fully functional bank account up and running within hours, all of that without submitting extensive documentation.

As Monese is regulated by FCA and equipped with high-end protection methods like biometric unlocking, your funds are completely secure. We can only hope to see even greater things coming to Monese, but even at the moment, it covers any needs your UK business might have.

Are Online Banks Safe?

When it comes to the security of online banks, you firstly need to realize one thing: security starts from you. No security system can cover every single problem. That goes for not only online banks, but any system, including traditional banks. There are always scammers after your passwords and credentials. So first and foremost, you need to be vigilant too.

But that being said, online banks are absolutely secure! In fact, their security systems are often on par with traditional banks (or even better). Many online banks have:

  • Fingerprint identification
  • 3D Secure payments
  • Virtual cards
  • and many other features.

On top of that, all online banks are regulated by local financial regulatory authorities. For example, FCA governs over Revolut, N26 has a European banking license and money is protected up to 100 000€ by the German Deposit Protection Scheme and TransferWise is regulated in 11 different jurisdictions, including the U.S.

Your money is safe at online banks as long as you are careful with your passwords. The rest is covered by supreme security measures.

Can Online Banks Substitute Traditional Banks Completely?

All of these perks probably lead you to consider whether you need your brick-and-mortar bank after all. Could online banks substitute a regular bank to such extent that you never need another bank account?

Probably not.

When it comes to the functionality of online banks, they could absolutely substitute any bank. But the problem doesn’t lie in online banks, but in the regulations of your home country.

In most countries, in order to register a business, you need to open a local bank account. Unfortunately, foreign bank accounts often aren’t enough. So, one way or the other, you’re still required to at least have one bank account locally.

That depends on your country’s regulations though. If you are just a freelancer who doesn’t need to open an official business, a digital nomad or a travel enthusiast, you can handle all of your financial things with an online bank.

How to Choose the Best Online Bank for Your Business

As you see from the list above, there are plenty of those who deserve the title of the best online bank. But which are the best for your needs? In order to figure that out, you need to think about 3 key things:

  • What services you need from your bank
  • Is the bank cost-friendly for your needs
  • Does the banking app tick all the boxes for you

🏦 Your banking needs

This is the most important point you need to figure out. What do you actually need your bank for? Many of us don’t stop to think about that since owning a bank account is such a „basic“ errand.

But what do you actually hope to get from your banking system?

Are you:

  • making many international transfers in different currencies?
  • making few payments and mostly locally?
  • looking for ease of use?
  • looking for a bank account you can open as a freelancer?

The five banks reviewed above all work for different needs. For example, the N26 business solution is only meant for self-employed people, not registered companies. Then again TransferWise is built on a fair exchange rate system, so it’s more suitable for those businesses that need to make transfers in different currencies.

Once you understand what you need, it will be an easy choice.

💰 Fees, especially ATM-related

Most online banks pride themselves on their fair pricing. In comparison to traditional banks, their fees really are very cost-friendly. Usually, you can find a certain amount of free payments from any online bank as well as no extra fees for currency exchange.

Despite friendly pricing, you should still take a moment to make sure you’re getting the best bang for the buck.

Online banks can have various monthly payment plans that include different features. Revolut, Monese, and N26 all have a free monthly plan that might work well if you don’t intend to make many payments monthly. These plans can include a few free payments and the option to withdraw a certain sum from any ATMs in the world without extra fees.

But as always, the devil lies in the details.

When it comes to ATMs, for example, all online banks have a bit different pricing. For example:

  • In N26 free plan, you get 5 free ATM withdrawals in euros. However, if you intend to withdraw foreign currency, you’ll need to pay a 1.7% fee.
  • In Monese free plan, you get to withdraw up to £200 for free monthly, but after that, you’ll incur a 2% fee.

These tiny details might matter a lot in the long run, so make sure you compare pricing thoroughly and choose the one that matches your spending needs the best.

💁 Customer support and ease of use

Last but not least, before committing to an online bank, feel free to test the bank’s customer support more closely too. The best online banks offer 24/7 live-chat customer support which is quite crucial, considering the fact you can’t go to a physical branch with your concerns.

From personal experience, Revolut has top-notch customer support that’s not only fast but very friendly and professional too. But the same goes for other 4 reviewed banks too who have all invested a great deal of time and effort in order to provide great customer support together with a user-friendly interface that makes it incredibly easy to handle your finances.

So which is the best online bank in 2020? As with everything else, it depends on your needs. But one thing’s for sure: online banks are slowly replacing traditional banks thanks to their convenience, pricing, and flexibility.

I hope this post helped you to gain perspective of the opportunities to save both money and time.

Are you using another online bank not mentioned in this list? Leave a comment below!

Written by
Johannes Larsson
Leave a Reply to Johannes Larsson Cancel reply

4 comments
  • Good summary on online banking Johannes..
    I just recently changed from one of the oldest Swedish banks to Revolut (also testing out Currencyfair) and I’m more than happy about this decision. Easy to open up an account, much lower fees than my old bank, and the level of support I received so far have been a completely different level.

  • Thank you JL for this post!

    1. I’m from India. The post was an eye-opener that such a banking system exists in the world. I never had a clue that there are alternatives like this. My bank account is with ICICI Bank, a leading private bank with an online facility. Their claims of fulfilling all needs online now stand busted as I am unable to withdraw from local ATM because they canceled my debit card PIN without my prior approval. (There was a small unauthorized regular withdrawal from my savings account and I simply informed them). They don’t take my call. I am unable to generate a new PIN online. All their emails inform me of the corona lockdown. I can not buy my daily needs.

    2. The post is full of valuable information.

    3. Very simple to understand.

    4. Crisp and clear.

    Thank you for this wonderful post.
    My banking system is set to change forever.

    Pramod, India, Goa
    2/4/2020

    • Traditional banking is chaos in regulation, in my own personal opinion. Dealing with such banks can suck the life energy out of you, so yea, recommending to look for alternatives :)
      Pad Pramod, thank you for the detailed review.