The short answer: before your first invoice. The longer answer covers why early separation pays off disproportionately, and which accounts to open immediately without a credit check or minimum deposit.
The Case for Opening Immediately
There is no legal requirement to have a business bank account as a sole proprietor. But there are strong practical reasons to open one before you issue your first invoice:
- Clean records from day one: Retroactively separating personal and business transactions is tedious. Starting with a clean account means your year-end bookkeeping reflects only business activity.
- Client credibility: Clients sending large Interac e-Transfers prefer paying to an account name that matches your business name. Early banking setup supports early professional positioning.
- GST/HST readiness: If you hit the $30,000 threshold sooner than expected, you want a clean business account to track collected tax clearly from the start.
- No-fee options eliminate cost objections: With accounts like EQ Bank Business and BMO eBusiness available at $0/month, there is no financial downside to opening immediately.
The Milestones That Definitely Require a Business Account
- Registering a business name: You need a business account in the registered name to bank under that name
- Crossing $30,000 in revenue (GST/HST registration): GST/HST remittances are easier to track from a dedicated account
- Hiring a subcontractor or employee: Payroll and contractor payments need a clear business banking trail
- Incorporating: Corporations are legally required to maintain corporate bank accounts separate from personal accounts
Can You Wait?
If you earn a small occasional income from freelancing (a few hundred dollars per year) and have no plans to scale, a personal account is workable. But for anyone operating a genuine freelance business:
- The administrative cost of mixing finances compounds each month
- CRA audits become more difficult with mixed accounts
- Year-end tax preparation takes significantly longer without separation
Best Accounts to Open Now (No Fee)
EQ Bank Business Savings Account
No monthly fee. No minimum balance. Unlimited electronic transactions. Free Interac e-Transfer. Interest earned on deposits. Fully online — no branch needed. No credit check. The easiest low-friction business account opening available in Canada. Best for: freelancers who want to start immediately with zero cost.
BMO eBusiness Plan
$0/month, 25 free electronic transactions, $1.50 per Interac e-Transfer (a cost consideration if you receive many client payments). Big Six bank credibility. Better for accounts that receive payment primarily by EFT or wire rather than e-Transfer.
Wealthsimple Business
No monthly fee, unlimited Interac e-Transfer, interest on deposits. Digital-only. Good option for freelancers already using Wealthsimple for personal investing.
Frequently Asked Questions
Can I open a business account before I’ve officially registered my business?
Yes — if you are operating under your legal name (no registered trade name), you can open a business account in your legal name without any business registration. If you want an account in a trade name, you need the Business Name Registration certificate first.
What documents do I need?
For a digital bank (EQ Bank, Wealthsimple): government-issued photo ID, SIN, Canadian address. Some banks also require a utility bill or bank statement showing your address. No business registration needed if operating under your legal name. No credit check required at these digital banks.
Does a business bank account affect my personal credit score?
Opening a business bank account generally does not affect your personal credit score — it is not a credit product. If you apply for a business line of credit or business credit card linked to the account, a credit check may be involved. A basic business chequing or savings account involves no credit inquiry.