Choosing a bank when you’re a freelancer isn’t easy.
And it’s probably even more difficult when you’re a freelance translator with lots of clients abroad.
To help you, here are some tips from our partner Independant.io, the French comparator for companies and freelancers:
- Two essential criteria for freelance translators to consider when choosing a bank account
- Two bank accounts that will help you to reduce your bank charges
Two criteria for freelance translators to consider when choosing a bank account
The question of legal status
Legal status is the main criterion for choosing a freelance bank account, and translators are no exception to the rule: your legal status compels you to use certain types of accounts. Obviously, these rules change depending on your country, but if we take the example of France, freelance translators work under one of the following statuses:
- Special status companies (single-person simplified company with shares, Limited liability single-member company…)
- Umbrella company
In the case of a micro-company, you are required to have a dedicated account, but you don’t have to have a “business” account. A simple personal current account will do the trick, and you can use less expensive or even free accounts.
In the case where you practise as a company (legal entity) such as a single-person simplified company with shares or a Limited liability single-member company, for example, the law compels you to have a business account. You will then have to choose between the offers of traditional banks and those of neobanks such as Qonto or Shine, for example. The advantage of the traditional banks is that they offer a very wide range of services, but often at a higher cost (beware of charges for international and foreign currency transactions!). Neobanks have a more limited, but cheaper offer.
Most freelancers (including translators) are now turning to these neobanks because their banking needs are simple, so why not save money at the same time! Best of all, the management interfaces are ergonomic, and the additional services (included in the account price) save a lot of time. These include invoicing or accounting functionalities.
In the case where you work for an umbrella company, it is simpler because you are an employee and can therefore use your personal bank account.
Having customers abroad (especially if you have a lot of them!)
Working for foreign clients is not the main criterion for choosing a business bank account for most freelancers (and even companies).
However, we thought it would be useful to mention it as one of the main criteria if you are a freelance translator.
Why? Because your speciality may often involve having clients abroad, and often many such clients.
The impact of this on your choice of an account is no longer negligible, for two reasons:
- Business bank account charges related to foreign currency and international transactions are often the most expensive.
- Not all non-SEPA credit transfers are accepted by neobanks. And when they are accepted, they are subject to fees, but we will come back to the issue of charges for foreign currency and international transactions.
NB: SEPA stands for Single Euro Payments Area. This area includes the EU countries (+ Iceland, Liechtenstein, Norway and Switzerland).
If you have lots of clients in Asia or the United States, you will be liable for fees for non-SEPA credit transfers and high exchange rates if you choose your bank account poorly. On the other hand, if most of your customers pay in Euros and are in the SEPA zone, you can choose your bank based on other criteria.
That being said, let’s now move on to two bank accounts suitable for freelance translators who want to limit their bank charges related to international and foreign currency transactions.
Two bank accounts that limit charges related to international and foreign currency transactions
1/ Revolut Business
Having been a paying application for a long time, the business offer of fintech Revolut (well-known to individual customers) didn’t attract many freelancers because they could find cheaper alternatives elsewhere.
However, Revolut now offers a free account and we applaud this change in positioning (clearly aimed at freelancers and the self-employed).
Why? Because Revolut is not intended to be a main account for freelancers, but a secondary account, which allows you to save on your charges for foreign transactions when you have a lot of them.
Also, before the offer was free, customers had to pay more than €20 per month to take advantage of it, which was clearly not attractive for those who only had a few international transfers.
Today, we believe that the rate change reflects the use made of it by freelancers: as a back-up account, with local accounts in GBP and EUR, an international IBAN and attractive exchange rates, just constrained by a few monthly usage limits, but all free of charge. Please note that if you exceed these limits, you can always opt for the premium offer at €7 per month.
Transferwise offers a multi-currency account designed to make you happy! It’s simple, almost everything is free: creating an account, creating a card, but also the option to receive free transfers in several currencies (EUR, USD, GBP, AUD and NZD).
The two accounts mentioned above are clearly designed to reduce “foreign transaction-related charges”. In our opinion, they are less advanced with regard to the functionalities such as invoicing or cash flow monitoring that some business bank accounts offer.
If you keep your existing account, remember there’s nothing to stop you from having two accounts. Indeed, many of you are already have:
- an account for your business
- Revolut and/or Transferwise as an account for transfers received from abroad.
Receiving a non-SEPA transfer on Transferwise is free of charge. Then, transferring the money to your main account costs only €0.63, for example, whereas receiving a non-SEPA transfer can cost €20 in a traditional bank.
By combining two accounts, you can avoid significant costs!
As you can see, the business banking market has been undergoing a real revolution in recent years, especially with the arrival of neobanks, who see freelancers as a huge source of potential clients. After all, there are already nearly 10 million freelancers in Europe, and that’s a good thing: customised offers are being created especially for freelancers at all levels, not just at bank level. Whether with regard to platforms (hello TextMaster!) but also to software (management, accounting, invoicing), freelancers will have access to specially designed offers which will save them time on managing their business.
Guillaume is now a freelancer (digital marketing) after 6 years at Google in the media teams in charge of accounts in the banking and insurance sector. In parallel with his business, he publishes on the website Independant.io.