Opening an Etsy shop? Read why you'll need a separate bank account

There are so many things that need to be done in the beginning. When starting your business or opening your Etsy shop you’ve got to choose a name, think about your target market, find your niche, set up a shipping strategy, and that’s just a few of those start up to-dos. Although those are all important, my experience has taught me there’s another key thing to do immediately when you get going and it might even be considered the most crucial.

As soon as you can, open a separate bank account. It’s the number one thing I recommend when people ask questions about starting a business. A lot of the tasks in starting a business can be learned, figured out, or caught up on. Blending your finances is really hard to undo and is even frowned upon by the IRS.

Accounting is probably the least of your worries when starting your Etsy shop and definitely one of the least glamourous parts of being an entrepreneur. Business finances can be confusing (and stressful) enough, make it a little easier on yourself by opening a separate bank account from the very beginning. Luckily, getting a new bank account specifically for your business or Etsy shop is easy to do.


It can quickly become very confusing to have your personal money mixed with your business finances. You’ll want to see how much money you’re spending and making – which can be done at a glance if you have a separate bank account. If not, you’re going to spend a lot of time combing through transactions and transferring information to get your bottom line.

Not only for personal reasons of seeing how your business is doing, but your accountant, bookkeeper, or CPA will thank you. It makes their job a lot easier come tax time and you’ll be spending less money since your financial information will be clear and all in one place.

Keeping it separate helps keep it simple.


When you open your Etsy shop, you’ll be buying supplies for your products, shipping materials, and paying shop fees. Get a bank account that provides a free debit card to use for your expenses. Even better, find a credit card and earn points (or cash back) while you purchase materials.

Remember that any expenses are write offs on your annual tax return. If you have a debit or credit card dedicated to everything business related, you’ll make sure no expense goes missed.


Set up all your streams of income (Etsy and Paypal for me) to deposit directly in your business bank account. Once again, you’ll be able to see how well your business is doing by a quick look at your bank account.

Both Etsy and Paypal make it super easy – Etsy deposits money into your account weekly, every Monday, and Paypal transfers your income with one click. You can set up your new bank account to receive their deposits.


When I started my Etsy shop, my expenses and income were basically nonexistent. However, within one month of getting started I opened a separate bank account. I wanted to keep my finances organized and legit from the beginning. I’m so glad I did it and always mention this to anyone contemplating starting any kind of biz.

Most banks have options for free bank accounts and I highly suggest taking advantage of that! Don’t wait – you can thank me later.

Ready to open your Etsy shop? Download my guide to getting started here!