Do I Need to Open a Separate Bank Account for My Etsy Business?

By Joy Uyeno

Updated September 22, 2017

Keeping track of your financial transactions helps your Etsy business.
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Etsy is an online marketplace for individuals to sell their crafts, artwork, crafting supplies and vintage items. Anyone who wants to seriously pursue an income from an Etsy store needs to set her shop up as a small business. While no specific requirements exist for the type of bank account you use, it’s wise to keep your personal and business transactions distinct from one another.

Business Accounts

Etsy does not require you to have a separate bank account; however, having your own business account makes it easier to distinguish between your personal expenses and your business expenses. If you do decide to open a small business checking account, Bankrate writer Jay MacDonald suggests looking for an account with low fees that also offers features that your specific business needs. Be prepared to answer questions such as how many deposits you plan to make each month, as well as the average number of checks, the amount of cash you will deposit and withdraw and the minimum and average of the balance you will maintain in the account.

Payment Processing

As a seller on Etsy, you can choose to accept personal checks, money orders and PayPal. If you plan to accept personal checks and money orders, you need to list your mailing address so customers may send their payments to you. With PayPal, you may request a check or elect to link your PayPal account to a bank account to receive your payments. By linking you business checking account to your PayPal account, you will be able to keep track of any PayPal transactions made for business purposes.


Keeping your personal finances separate from your Etsy business finances will make it far easier to organize your business budget and file your taxes. Rather than wracking your brain to remember all of your income and expenditures the next year during tax time, you will have clear records. These records are vital to proving your business expenses if you end up getting audited. If the IRS needs to check whether you’re running a legitimate business or just crafting as a hobby, one factor it will consider is whether you keep a separate checking account, financial planner Richard Salmen says in "Entrepreneur" magazine.


For those who are selling on Etsy on a minimal level as a hobby, opening a business account may not be feasible since many banks require minimum balances and charge fees for their services. However, it’s still important to keep ongoing documentation of your transactions. If you use a budgeting program for your personal life, such as Quickbooks, Intuit or Quicken, keep a separate account for Etsy sales. Otherwise, create a spreadsheet to track your transactions so you have a record when it comes time to file your taxes. It’s also an excellent way to track your progress.