Whether you’re an experienced business owner or are just starting, opening a business bank account can be incredibly beneficial. Keeping your personal and business finances separate will make managing your tax liabilities much easier and will help you keep track of comings and goings.
However, starting a business can be a busy time, and the admin work, such as searching for a registered office address provider or hiring new staff, quickly piles up. Trying to wade through figures and fees to select the best bank for your business account can be overwhelming and is just another job to do.
If you’re feeling stuck, keep reading, as we’ve summarised the data from nine UK banks below so you can compare the numbers and decide what works best for your company and individual finances.
Best Business Banking Accounts
Whether you’re looking for the best business bank account for sole traders or one with a long free-banking period, we’ve done the leg work so you don’t have to. Here’s everything you need to know:
1. HSBC
Starting your business with HSBC will give you free banking for the first 12 months. So, you’ll pay no maintenance fees or payments if standard charges cover your account. You can choose a business current account that offers electronic banking or small business tariffs that suit your business banking practice.
| Who Is Eligible? | Companies with a turnover below £6.5m |
| What Is the “Free Banking” Period? | 12 months |
| What Is the Account Fee after the “Free Banking Period”? | £8 per month |
| What Is the Cash Transaction Limit? | Maximum daily cash deposit is up to £20,000 or £250 in coins. |
2. Santander
With Santander, you can choose between a Business Current Account and a 1|2|3 Business Current Account. However, you can currently only open a business account if you’re an existing customer.
The main advantage of the 1|2|3 account is the cashback feature, where the rate of your received cash back depends on the amount you deposit into your account each year. This rate varies between 1, 2 or 3%. Santander will pay this cashback on the first £10,000 deposited into your account during the year.
| Who Is Eligible? | Temporarily current Santander customers only |
| What Is the “Free Banking” Period? | 18 months |
| What Is the Account Fee after the “Free Banking Period”? | £7.50 per month |
| What Is the Cash Transaction Limit? | Up to £3,000 cash per month with £1.00 per £100 exceeding that limit. |
3. TSB
TSB provides 30 months of free business banking for sole traders and limited companies. TSB supplies a free Square reader with each business account, and there are no fees to pay on your first £1,000 of sales.
| Who Is Eligible? | Open to sole traders, partners, and directors |
| What Is the “Free Banking” Period? | 30 months |
| What Is the Account Fee after the “Free Banking Period”? | £5 for account balances under £10,000. This fee is waived for balances over £10,000 |
| What Is the Cash Transaction Limit? | N/A. |
4. Natwest/RBS
Natwest offers business owners a choice between its “Startup” and “Business” accounts.
The Startup account is open to companies that have been trading for less than 12 months and have a turnover of less than £1 million. This account offers free banking for 24 months before your business shifts to the Standard Published Tariff.
The Business account is for companies trading for over a year with a turnover of up to £2 million. Its benefits include services such as FreeAgent accounting and Business Boost and a dedicated Relationship Manager.
| Who Is Eligible? | Over 18s with a right to be self-employed in the UK. |
| What Is the “Free Banking” Period? | 24 months |
| What Is the Account Fee after the “Free Banking Period”? | No minimum monthly charge; the cost is per transaction on the Standard Tariff |
| What Is the Cash Transaction Limit? | N/A. |
5. Lloyds/Bank of Scotland
New businesses with an expected turnover of less than £3 million receive 12 months of free day-to-day banking with the Business Current Account from Lloyds and Bank of Scotland.
All business accounts have free electronic payments and a simple pricing structure. Beneficial products like business loans, insurance, overdrafts and charge cards offer additional support.
| Who Is Eligible? | New companies with an expected turnover of up to £3 million (for the Business Current Account) |
| What Is the “Free Banking” Period? | 12 months (6 months for switching from another business account) |
| What Is the Account Fee after the “Free Banking Period”? | £7.00 per month |
| What Is the Cash Transaction Limit? | Up to £1,500 per month at a cost of £1.00 per £100. Anything exceeding £1,500 per month is charged at 90p per £100. |
6. Barclays
Barclays offers both startup and standard business accounts. With its startup business account, you’ll receive free banking for 12 months. Your business will also benefit from the expert advice of Barclays’ Business Direct team to support and help you grow during the initial months. Barclay’s team will help you outline your business strategy and cash flow management and guide you through international lending and trading.
| Who Is Eligible? | Suitable for most companies with a turnover of up to £6.5 million (specific criteria for businesses in certain sectors, e.g. agriculture, social housing) |
| What Is the “Free Banking” Period? | 12 months |
| What Is the Account Fee after the “Free Banking Period”? | £8.50 per month |
| What Is the Cash Transaction Limit? | N/A. |
7. Virgin Money
Yorkshire Bank and Clydesdale Bank have been brought together under the Virgin brand.
They provide a healthy free banking period of 25 months, covering free day-to-day banking for startups and those switching accounts. Your business must have a turnover of less than £6.5 million with an annual cash transaction limit of £250,000.
| Who Is Eligible? | Any business or sole trader with an annual turnover of under £6.5 million |
| What Is the “Free Banking” Period? | 25 months |
| What Is the Account Fee after the “Free Banking Period”? | £6.50 per month (Business Banking Tariff) |
| What Is the Cash Transaction Limit? | £250,000 per year. |
8. Monzo
Unlike other business bank accounts, Monzo boasts no account fees on their lite tariff. For larger businesses or those wanting to access more features such as tax pots, integrated accounting, invoicing and multi-user access, it’s a small fee of £5 per month for Business Pro.
| Who Is Eligible? | Sole traders and registered limited companies by shares based in the UK |
| What Is the “Free Banking” Period? | N/A |
| What Is the Account Fee after the “Free Banking Period”? | Free for the Lite tariff or £5 per month for the Pro option |
| What Is the Cash Transaction Limit? | N/A. |
9. Metro Bank
Metro Bank has a specialist account for startups and SMEs who have a turnover under £2 million, as well as for larger, experienced businesses.
If you maintain a balance above £6,000 for the whole month, Metro Bank will waive your monthly account maintenance fee. Otherwise, it’s a monthly fee of £6. If you stay above £6,000, you’ll get 30 fee-free UK transactions a month, with 30p per transaction for amounts above that figure. Accounts that go under £6,000 will pay 30p per UK transaction.
| Who Is Eligible? | Companies with a turnover under £2 million. |
| What Is the “Free Banking” Period? | N/A |
| What Is the Account Fee after the “Free Banking Period”? | £0 on account balances over £6,000 and £6 a month for balances under £6,000 (see below) |
| What Is the Cash Transaction Limit? | N/A. |
Once you’ve selected the best business bank account for your company, you need certain key documents to apply. These documents include proof of identity and address. You’ll also need your Companies House registration number (if you have one), financial information, and full details of company directors and partners.
To find out more about the best business bank account in the UK and to receive expert advice and guidance, contact Mint Formations today.
