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

Business Bank Accounts

  - Looking for a bank account to help grow your business? Compare the 12 best business bank accounts (also known as cheque accounts) based on the longest introductory free banking periods and most free transaction charges.
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Compare the Best Business Bank Accounts

CompanyStart Up IncentiveSwitching IncentiveOpening IncentiveAdditional InformationApply Today

Business Current Account - Business Tariff
YesYesNo
  • 25 months free banking for start ups/switchers with a turnover below £2m
  • No credit interest
  • Dedicated business banking contact
Account Fee: £5.00 pm

Business Current Account - Business Tariff
YesYesNo
  • 25 months free banking for start ups/switchers with a turnover below £2m
  • No credit interest
  • Dedicated business banking contact
Account Fee: £5.00 pm

Business Directplus - Credit balance £1K or more
NoNoYes
  • 18 months free business banking including no service charge
  • No credit interest
  • Switch Service Guarantee member
Account Fee: £5.00 pm

Business Account - Electronic Business Tariff
YesYesNo
  • 18 months fee-free banking for start-ups and switchers
  • Turnover max £2m
  • Account sweeping available at an additional charge
Account Fee: £5.00 pm

Business Current Account - Small Business Tariff
YesYesNo
  • 18 months fee-free banking for start-ups and 12 months for switchers
  • Turnover max £2m
  • Text alerts available
Account Fee: £5.50 pm

Business Current Account
YesYesNo
  • 18 months fee-free banking for start-ups and 6 months for switchers
  • No credit interest
  • Free text alerts available
Account Fee: £6.50 pm

Business Current Account
YesYesNo
  • 18 months fee-free banking for start-ups and 6 months for switchers
  • No credit interest
  • Free text alerts available
Account Fee: £6.50 pm

123 Business Current Account
YesYesNo
  • Up to £300 cashback on annual credit turnover
  • Cash transactions in excess of limits will incur charges
  • 12 months reduced monthly fee of £5 for start-ups and switchers
Account Fee: £5.00 pm for 12 Months (For start-ups and switchers) then £12.50 pm

Business Current Account - Standard Tariff
YesNoNo
  • 2 years fee-free banking - trading less than 1 year with turnover under £1m
  • No credit interest
  • Monthly account fee waived if transaction charges over £5
Account Fee: £5.00 pm

Business Current Account
YesNoNo
  • 18 months fee-free banking for businesses under 1 year with turnover under £1m
  • No text alerts available
  • Nothern Ireland only
Account Fee: £8.00 pq

Business Current Account - Standard Tariff
YesNoNo
  • 18 months fee-free banking for businesses under 1 year with turnover under £1m
  • No credit interest
  • Monthly account fee waived if transaction charges over £5
Account Fee: £5.00 pm

Business Current Account - Mixed Payments Plan
YesNoNo
  • 12 months fee-free banking for start ups and loyalty bonus
  • Open via branch only
  • Account sweeping available
Account Fee: £6.00 pm

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How to choose a business current account

Every business can benefit from having a suitable business bank account, but it can be difficult to know which one is best for your situation. While we have an in-depth guide on how to choose the best business bank account, here we’ll discuss some key considerations to help you decipher the table above.

Note that while certain businesses such as sole traders would be able to use their personal current account for business transactions (unless you have large volumes of money flowing in and out, which your provider might not appreciate), this could make filing your business taxes much more complicated. Indeed, anyone who runs a business can benefit from working with a provider who understands what is required, with many offering services to help business customers make the most of their finances.

The main consideration when choosing an account, as with all financial products, will be cost. If you’ve already done a little research, you will have noticed that business banking providers tend to charge monthly fees. One of the most popular incentives offered by providers is an initial fee-free period, which can be especially enticing for start-ups. The deals featured above are organised by longest introductory free banking period first, and then by the best no-fee transaction charges, while also displaying the account fee you would be expected to pay after any introductory period ends and showing you which deals come with certain incentives. If fees are your main criterion, then it could be a simple matter of seeing who sits at the top of the charts.

Remember, however, that costs go beyond account fees. There are the costs of overdrafts and transfers to consider, as well as the amount of interest you can get (if any) by banking with a certain provider. And, if you are in a business that frequently deals with cash or cheques, you’ll want a provider with physical branches nearby so you don’t lose too much in time and fuel costs. If you’re a digital-oriented business, on the other hand, you’ll want to know the provider offers a comprehensive online banking service.

Advantages and disadvantages

As with everything, there will be downsides as well as upsides to getting a business current account.

Pros: Cons:
  • 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 is much easier than using your personal account for tax return purposes (if that is even an option)
  • You should be able to pay in much more compared to a personal account, though keep an eye on the maximum allowed turnover, and the provider should be able to manage a much larger volume of money flowing in and out of the account
  • Providers should be knowledgeable about how businesses work and therefore able to help with much more than the basics
  • While some free business bank accounts are available, most will come with an annual or monthly fee
  • Beware that some business accounts charge high fees for overdrafts and other usage
  • Not many offer a decent rate of interest on the money you keep in the account
  • Once the introductory fee-free banking period has ended, you might want to consider switching to a different deal, depending on the provider’s charges

Eligibility

Before you get too excited about selecting your business bank, you’ll want to make sure you are eligible. While different providers will have different criteria, eligibility will generally depend on what kind of company you are (charities will often require a different type of account), your maximum annual turnover and the owners’ UK residency status, among other things.

Given these varying eligibility criteria, it’s important to compare business bank accounts to find the one that is both suitable and open to your business. For instance, some accounts are specifically for start-ups, while if you’re a smaller business, you may want to look for a small business bank account provider who understands your particular needs.

What do I need to open a business bank account?

Depending on what provider you choose, there will likely be different opening requirements, but generally, when you open a business current account, consider the following documentation:

  • You’ll need to provide personal ID, usually one form of address ID such as a utility bill, and one piece of identification that proves you are who you say you are such as a passport or driving licence.
  • Depending on your business structure you may need to provide a partnership agreement, certificate of incorporation, trust deed or constitution (for clubs, charities, etc.).
  • If you’re a new start-up you’ll have to show your business plans and cashflow forecasts, and you may also have to show your personal bank statements for a set period. Businesses already running will have to provide two or three years’ audited accounts.
  • If you’re an existing business switching over, you’ll likely need to show bank statements from your existing business current account.

Assuming you’ve brought all the required documentation, opening a business account shouldn’t take much longer than a personal current account. Likewise, switching to a better business bank account should be pretty straightforward. Small businesses, charities and trusts can use the Current Account Switching Service which guarantees accounts can be switched in 7 days. Once the new provider approves your application, they should take care of the rest, and if they are part of the Current Account Switch Guarantee your new account should be ready to go in seven working days.

What next?

If you’re still not sure what account to choose, why not have a look at our business banking guide.

Looking for a business savings account instead? We offer tables with the best savings accounts and the best fixed rate bonds for businesses, as well as separate charts especially for charity and club savings accounts and client accounts.

 
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