Business Bank Accounts - Business Banking | moneyfacts.co.uk
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Compare Business Bank Accounts

Find the best business bank accounts

Running a small business requires you to juggle your time between marketing, sales, customer service and managing your finances. We’ve compiled the best buys below for business bank accounts including those with no fees and benefits. You can also conduct a search of the whole high street business bank account market to find the account that is right for your business.

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A guide to business bank accounts

Michelle Monck

Michelle Monck

Consumer Finance Expert

At a glance

• There are several different types of business bank account you can open. Consider which account best suits your individual circumstances before signing up.
• Nearly all business bank accounts will come with fees – both a monthly standard charge as well as additional costs for things like depositing cheques or cash.

The best online business bank accounts

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Provider Account fee Interest rate Features Learn more

 

£69 Annual 

EAR – N/A
AER – 0.00%
  • Instant Account Number and Sort Code
  • Centralised Account Management System
  • Mobile App and Online Servicing
  • Spending Insights
  • The Post Office Banking Services
  • UK Based Customer Services Team
  • Business Expense Cards
  • Fraud Monitoring
Find out more

No monthly fee

0%
  • No monthly fees
  • No fees overseas
  • 24/7 UK support
  • Apply for a business overdraft up to £150,000
  • Real time notifications
  • FSCS protection
Find out more

Pro – £5 per month

Premium – £9 per  month
0%
  • Soldo Mastercard cards
  • Web Console and Mobile App
  • Accounting integration
  • Free & unlimited transactions
  • No charge for deposits
  • Dedicated support
Find out more
From £0-£19.90 per  month 0%
  • A mobile business account
  • Invoice management
  • Multiple bank accounts in one app
  • Expense management automation & accounting
  • Stress free sign-up
Find out more
£12.50 per  month 0%
  • Open within 4 hours
  • No credit checks
  • Online account
  • Automated telephone service
  • SMS service
  • Manage your spending
Find out more

No monthly fee

0%
  • Open your account online
  • Get the best exchange rates
  • Receive payments from customers and disbursements from e-com platforms
  • Allocate custom amounts, and manage budgets for each card
  • Make transfers locally or internationally
Find out more

Essential – £6 per month

Pro – £10 per month
0%
  • Smart company cards
  • Automated expenses
  • Spending overview
  • Simplified bookkeeping
Find out more

Business - £9.99 per month

SuperGreen - £19.99 per month
0.27%
  • End manual bookkeeping
  • Immediate overview of your finances
  • Pay invoices without any manual input
  • Instant employee access
  • Always know what’s going on
  • Efficient payments
  • Sustainable by default
Find out more

 

The best high street business bank accounts

Featured provider

Account name

Account fee

Start-up Incentive

Switching incentive

Opening incentive

The Co-operative Bank

Business Directplus – Credit balance £1k or more

£5.00 per month

No

No

Yes

TSB

Business Plus

£5.00 per month

Yes

Yes

Yes

Clydesdale Bank/Yorkshire Bank

Business Current Account – Business Tariff

£6.50 per month

Yes

Yes

No

HSBC

Business Current Account Electronic Banking Tariff

£6.50 per month

Yes

Yes

No

See the full high street business bank accounts table.

Disclaimer

The list of featured providers on this page is a selection of services available and gives you an idea of the kind of options available. You can find out more about the individual products by visiting any of the providers listed. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions.

Quick Links

Quick links are where we have an arrangement with a provider so you can move directly from our site to theirs to view more information and apply for a product. We also use quick links where we have an arrangement with a preferred broker to move you directly to their site. Depending on the arrangement we may receive a modest commission either when you press a 'Go to Provider' or 'Speak to a Broker' button, when you call an advertised number or when you complete an application.

What is a business bank account?

A business bank account allows you to keep your personal and business finances and transactions separate. They are available to all types of businesses, including limited companies, partnerships and for people who are self-employed. They are available to business start-ups, through to more mature businesses.

They are like personal bank accounts, providing debit cards for purchases, allowing you to pay money in and make withdrawals. You can also apply for a business overdraft if you need short-term help with your cashflow.

However, their main difference is in their charging structure. Traditionally, business bank accounts came with a set of monthly and transactional fees, for example every time you paid in cash, issued a cheque or made a bank transfer a fee would be applied. However, in recent times, new competition has entered the market with more online business bank accounts now available. Many of these offer no or lower monthly fees and lower costs to operate your account. And, unlike many traditional business bank accounts, they also require no credit check, making them almost universally available and quick to open – albeit there will be no overdraft facility with these.

How to choose a business bank account

Your choice of business bank account will depend on the accounts your business is eligible for (usually based on your business type), what you need the account to do and how much it will cost your business. You will also need to decide if you want to open an account from a high street bank or from an online provider of business bank accounts.

  1. Check eligibility.
  2. Review the key features and check the account can do what you need.
  3. Check the costs of the account and find the most economical.
  4. Make sure you can access your account when and where you need to.

Make sure the account does what you need - review the key features and services

Make sure the account does what you need – review the key features and services
Business bank accounts have a range of services available:

 

  • Integration with accounting software and apps – this helps you to save time when managing your VAT returns or your expenses.
  • Overdrafts – this lets you borrow money on a temporary basis, but they can come with costly fees and interest rates.
  • Online banking services – this is available through your provider’s website or app.
  • Branch and phone banking, which is usually available from high street banks so you can pay in cash and make withdrawals over the counter.
  • Post Office banking service – if your bank is not near to you, then a Post Office might be, allowing you to pay cash or cheques into your business bank account.
  • Cheque books – these allow you to make payments, and, although they are used less and less, they can be useful for larger payments or payments sent by post where an online transfer is not possible.
  • Debit cards and prepaid cards – these allow you and your employees to spend money, and some cards allow you to set spending limits helping you to control expenses.
  • Interest rates – these can be negative or positive depending on whether your business account is in credit or debit.

Check the costs and find the most economical business account

A business bank account typically consists of a series of monthly and transaction fees, overdraft interest rates and credit interest rates.
Monthly fees or standing charges range from £0 to £30, with a market average fee of high street banks at £6 per month.
Transaction fees for bank accounts are often charged for:

  • Withdrawing cash
  • Cheque payments or debits
  • Receiving or making electronic payments
  • Debit card purchases
  • Receiving income from card payments
  • Overdraft usage.

The charging structure of business bank accounts can also include tiered rates based on the level of income your deposit into the account each month and the number of payment cards you need for employees.
You can compare the cost of overdrafts by looking at the Annual Equivalent Rate (AER). This is the percentage interest rate cost applied to any borrowing on your business overdraft.

Check eligibility

Business bank accounts may offer different accounts to different business types:

  • Sole trader
  • Partnership
  • Limited liability partnership
  • Limited company
  • Public limited company
  • Not for profit organisation.

Check the access rules for your business account

You can usually access your funds, make payments and transfers through internet banking, apps, by phone or in branch. Some of the accounts that are from online providers only will restrict you to accessing your account online only.

High street bank or online business bank account?

New online challengers have entered the business bank account market offering exclusively online banking services only for businesses, often through apps. They are responding to the needs of smaller businesses looking for easier and lower-cost ways to manage their business banking. The choice between a high street bank or an online business bank account will depend on the costs of their services, the importance of accessing a physical branch, the range of services you need, whether access to an overdraft is required and the importance of integrating with accountancy apps. How the two types of provider are regulated is also different, and this is also an important consideration when making your choice between the two.

Are online business banking apps and accounts safe to use?

There are two different types of providers offering business banking apps: those that offer a prepaid business card and those offering broader services more like a traditional business bank account. The former is useful for helping to manage the day-to-day expenses of your business and often integrate with accountancy apps for business, making your invoicing and bookkeeping easier.

It’s also important to know that these types of online providers are regulated in a different way to the high street banks. For example, money held with these providers is not covered by the Financial Services Compensation Scheme (FSCS). Traditional banks will have this cover for most non-financial businesses. We explain more in our guide FSCS for businesses and charities. Those providers offering payment services such as direct debits and standing orders are required by UK regulation to keep all the monies of their accounts in a safeguarded account separate to the provider’s accounts. This means the money should be safe if the firm goes bust. These organisations may also not be based in the UK, but usually they will then have some form of agreement to operate in the UK using the registered status in their home nation. You may also find that if you have a complaint about the provider, you can not escalate this to the Financial Services Ombudsman.

Moneyfacts tip

Moneyfacts tip Michelle Monck

If you are likely to hold significant funds in your business bank account, then you may want to consider a traditional bank account or a business savings account, both with FSCS protection.

What are the benefits of a business bank account?

  • It makes it easier to complete tax returns as your business transactions and income are not tied up with your personal affairs.
  • Some business accounts offer switching incentives and cashback.
  • New businesses can benefit from reduced monthly fees on some accounts.
  • If you employ staff, then you can use the account to process and make salary payments.
  • The option to make international payments in a range of currencies.

How to open a business bank account?

To open a business bank account, you will need to check the account is available to your type of business, prove your identity as a director or business owners and give some basic information about your business, such as Companies House registration details and turnover. In summary:

  1. Check the account is available for your type of business, for example some accounts will only accept limited companies, sole traders or charities.
  2. Get your personal ID ready for all company directors – for example, a passport or drivers’ licence.
  3. Find your Companies House registration or Registered Charity number; depending on your business structure, you may need to provide a partnership agreement, certificate of incorporation, trust deed or constitution (for clubs, charities, etc.).
  4. Have two to three years of audited accounts available; for new businesses, have your business plan and forecast cashflow available – you may also need to share your personal banking statements.
  5. Understand your company credit history.
  6. If you are switching your business bank account, bring your current bank statements.

How to open a business bank account online

Our comparison table above shows which accounts can be opened online. Most of the information can be completed online if the business bank account provider has its application forms integrated with Companies House and use credit reference agencies to check identities. However, you may also be asked for copies of ID and documents to prove the addresses of directors or business owners and copies of company contracts or website links if your business is a start-up.

How to switch business bank accounts

Even established businesses that have used the same bank account for years can benefit from switching their bank account and reducing their overall banking costs. Some banks also sweeten the deal with switching invectives.
Small businesses, charities and trusts can switch their business bank account in seven days; thanks to the Current Account Switch Guarantee service. Just make sure the bank you are opening an account with is a member of the scheme.
The length of time it can take to open an account will vary by provider and can range from same day to several weeks – many banks publish service quality data that can give an indication of timescales.
Businesses can keep the process as swift as possible by preparing all the required documentation for when they start the account opening process.

What are introductory offers or switching incentives?

A lot of banks will offer new business bank account customers free banking for a set period. This could significantly reduce your costs if you are a new start-up. However, while these offers may undoubtedly be cheaper in the near-term, take care when the introductory period ends. Although these introductory offers are ‘nice to have’, when selecting your account, you should be thinking of more mundane things, such as the costs and charges after the introductory period ends, as well as the level of customer service

Can you open a business bank account with bad credit?

While a limited company or partnership is a legal entity in its own right, if their directors have a poor credit history, then the ability to open a business bank account with a high street bank could be limited. A guaranteed business bank account means you will be accepted no matter what your previous credit history. You will still need to meet their identity requirements and won’t be able to obtain a line of credit from the provider.
Read more in our guide to opening a business account with bad credit.

How to manage your business bank account

Business bank accounts can be managed in branch, by phone, online or by app. You can compare these choices on our best buy chart above or by searching our full table.

How much can I pay into my business current account?

Many business bank accounts have a maximum balance in your account and, if this is exceeded, then you may be charged a fee.

Can you make international payments from your business bank account?

Some business accounts allow international payments, but you will need to check the product features for this. You may find that using this increases your monthly account fee or there are additional transactional charges. You may find a specialist international money exchange company can offer better rates if you need to make payments abroad frequently.

Your account will need an International Bank Account Number (IBAN) to make international payments.

Need to make international payments?

XE offers a quick and cheaper way to make international payments than a high street bank.

What is the best bank for a business account?

Every year, the impartial experts at Moneyfacts assess the flexibility, features and benefits of business bank accounts available from high street banks to identify the very best available in the market.

Find out who got the top business bank account ratings.

Can I use my personal bank account for my small business?

Most banks will include a condition in their personal account terms and conditions that the account is only for personal use and not for businesses. If you want to be 100% certain that you will not breach these conditions, then you should open a business bank account.
It is not a requirement of HMRC that businesses should have a separate business bank account, but they do require business owners to separate business and personal transactions.

The advantages of a separate business bank account

Read our guide to find out why you should keep your business and personal bank accounts separate.

Business bank account FAQs

How does a business bank account overdraft work?

A business bank account overdraft will need to be agreed with your bank first and will be for a set time period. You can compare the cost of overdrafts by looking at their interest rates, these are shown as Equivalent Annual Rate. There are usually differing rates for arranged and unarranged overdrafts.

Can you earn interest on your business bank account?

Credit interest rates do apply on some business bank accounts, but rates are usually not as good as a business savings account.

How to avoid unnecessary charges on your business account

Don’t exceed your overdraft limit or use an overdraft without this being arranged. If you do, you will find you are charged higher fees as a result. You can also look to minimise unnecessary transactions and to reduce your number of transactions.

Can you get a free business bank account?

Some banks will give businesses and start-ups free business banking.

Can you have more than one business bank account?

Yes there are no rules against having multiple business bank accounts.

Pros and cons of a business bank account

  • They come with features that personal bank accounts do not have, such as the option for employees to have a company debit card, special overdrafts and the ability to receive customers’ payments via debit or credit card.
  • It keeps your business transactions separate from your personal account, making it easier for tax return purposes.
  • Business bank account providers should be able to manage the larger volume of money flowing in and out of the account. Some offer specialist services such as night safes, which allow deposits to be made securely outside of normal business hours.
  • Providers should be knowledgeable about how businesses work and therefore able to help with much more than the basics. You may have access to a relationship manager.
  • While some free business bank accounts are available, most will come with a monthly or quarterly fee.
  • Beware that some business accounts charge high fees for overdrafts and other usages.
  • Not many offer a decent rate of interest on the money you keep in the account.

Moneyfacts tip

Moneyfacts tip Michelle Monck

Some business banks offer free banking for a period of time from when you open the account. Once this introductory period has finished, you should review the new fees that apply and see if it is worth switching again. 

Looking for a business savings account instead?

We can help you compare the best savings accounts and the best fixed rate bonds for businesses, as well as charity and club savings accounts and client accounts.

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