A business bank account helps you to manage your business finances and if you have recently started a new business you may be wondering what are the best business bank accounts for startups? Alternatively, if you are an existing business owner you may be wondering if you are getting the best deal with your existing business account.
In this article, we take a look at some of the best business bank accounts in the UK, including the best app-only business bank accounts and the best business bank accounts with high street banks. If you would like to find out more about setting up a business bank account, read our article 'How to open a business bank account in the UK'.
What is a business bank account?
A business bank account is specifically designed for managing your business finances and having a separate business bank account can help to avoid confusion when you are trying to manage your personal and business finances. If you are a limited company and are registered with companies house in the UK then you are legally required to have a business bank account to keep your personal and business finances separate, but if you are a sole trader, there is no legal requirement to open a business bank account. That said, having a separate account helps to manage your finances more easily.
It is worth considering that some business bank accounts come with monthly account management fees and some also charge for transactions in and out of your business account. It is important to read any documents carefully when choosing a business account so that you know exactly what you will be charged for. If an account offers free business banking, it may limit how much you can spend when using the account, so look out for any limitations and charges if you exceed these limits.
Best app-only business bank accounts
The introduction of app-only banks has meant that business banking has become easily accessible and you can manage your money on the go from your smartphone. You can now apply and set up a Business bank account directly from your phone meaning you no longer need to make an appointment in a branch and fill in laborious forms. Below, we highlight some of the best app-only business bank accounts in the UK right now. App-only banks may be the best business bank account choice for startups and freelancers due to the low account management fees and free integration with accounting software such as Xero. If you are a freelancer looking for a business bank account, we have more information in our article, 'Best business bank accounts for freelancers'.
Starling Bank - Great for free business banking
Starling Bank* offers business accounts for sole traders, limited companies and businesses with multiple directors. You can bank with no monthly account fees and benefit from fee-free spending when travelling abroad for work. Starling's Business accounts also allow you to integrate your accounting software such as Quickbooks and Xero. For more information on Starling Bank's business account read our Starling Bank Business review.
Starling Bank Business pros
- No monthly fees
- Multi-currency accounts
- Fee-free spending abroad
Starling Bank Business cons
- No overdraft facility
- Unable to take out a business loan
- 0.3% Charge for cash deposits (rising to 0.7% from 1st March 2022)
Monzo - Great for 6 months free accounting software
Monzo has two business accounts, Monzo Lite and Monzo Pro. Monzo Lite offers customers free business banking with all of the account features of a Monzo personal account such as fee-free spending whilst abroad and categorised spending. Monzo Pro takes it one step further with additional features such as tax pots, integrated accounting software and invoicing but this does come at an additional cost of £5 per month. More information on Monzo's business account fees and features can be found in our Monzo Business review.
Monzo Business pros
- No monthly account fees with Monzo Lite
- Accountancy tools integration
- Fee-free spending abroad
Monzo Business cons
- No overdrafts or loans
- £200 cash withdrawal limit outside EEA
- Some features can only be unlocked with Monzo Pro
Revolut - Great for multi-currency accounts
Revolut* has a business account to suit a range of business types from freelancers to more established corporate companies. Revolut's freelancer accounts can be opened in the business owners name and the company accounts can be opened in the registered business name. Revolut's free business account offers limited features that come without cost but its paid for account offers additional benefits such as priority customer support and fee-free spending abroad (up to a set limit). For more information on Revolut's business account offerings, read our Revolut Business review.
Revolut Business pros
- Receive, hold and send money in up to 30 different currencies
- 24/7 customer support
- Range of accounts to suit every business (from no monthly fees to £100 per month for corporate accounts)
Revolut Business cons
- Unable to deposit cash or cheques
- No overdraft or loans
- A fee to transfer money within the UK (outside of free limits)
Tide - Great for fee-free spending abroad
Tide has three business accounts, Tide Basic, Tide Plus and Tide Cashback. Tide Basic offers free business banking for those that do not want to pay a monthly fee. Tide's Business accounts let you spend money abroad fee-free and you can also take advantage of other useful features within the app such as customisable invoicing and accounting software integration. More information on Tide Business can be found in our independent review, 'Tide Business banking review'.
Tide Business pros
- No monthly fee
- Fee-free spending abroad
- 0.5% cashback with the Tide Cashback business account
Tide Business cons
- 20p fee to transfer money in the UK
- £1 fee per cash withdrawal
- No loans or overdrafts
Monese - Great for rounding up spending
Monese offers customers a business account for £9.95 a month and if you don't already have a personal Monese account you can get one included with the Monese Business account. This allows you to switch easily between the accounts within the Monese app. Monese is currently not a fully-fledged UK bank account, it is an e-money institution, so your Monese cards are prepaid debit cards and your money is not protected by the Financial Services Compensation Scheme (FSCS). More information on Monese Business and how it works can be found on the Monese website.
Monese Business pros
- Free UK transfers
- Free ATM withdrawals (limits apply)
- Saving pots and the ability to round up spare change
Monese Business cons
- £9.95 monthly fee
- 0.5% fee to spend money abroad
- No overdraft or loan facility
Compare the best app-only business bank accounts
In the below comparison table, we compare the different app-only business bank accounts and features.
|Good for||Free business banking||6 months free accounting software||Multi-currency accounts||Fee-free spending abroad||Rounding up spare change|
|Free UK transfers|
|Free ATM withdrawals|
|Fee free spending abroad|
|Cash and cheque deposits||Cash only||Cash only|
|Accountancy tools integration||(Monzo Pro only)|
|24/7 customer support|
|Extras||Business Toolkit at £7 a month includes accounting and bookkeeping features||6 months free accounting software with Monzo Pro||Receive, hold and send money in up to 30 different currencies||Keep on top of any invoices with the invoices feature within the app||Save as you spend by rounding up the spare change on your business transactions by x1,x2,x3,x5 or x10|
For more information on each of the app-only business bank accounts and the fees and charges for each bank, read our independent reviews:
Best high street business bank accounts
We take a look at some of the best high street bank accounts in the UK including some of the best business bank accounts for small businesses. The majority of high street banks charge a monthly fee to use their business accounts as well as fees for transactions that occur on the account. Some business owners may prefer to use high street banks compared to the newer app-only banks that have no access to a branch as many high street banks offer overdrafts and business loans. All high street banks also offer the added security of protection from the FSCS which is not the case for all app-only banks on the market.
Virgin Money - great for free money management tools
Virgin Money offers different business accounts depending on whether your company's annual turnover is more or less than £6.5million. Here we look at Virgin Money's Business Current account for businesses with an annual turnover of less than £6.5million. If you have a relatively new business that was established up to 12 months ago, or you are new to Virgin Money you may be able to benefit from 25 months of free business banking. A cash limit of £250,000 does apply. If not, there is a monthly account fee of £6.50. Virgin Money business current account customers can also benefit from smart money management tools and up to 0.35% cashback on purchases made with a business debit card. More information on the Virgin Money Business Current account can be found on the Virgin Money website.
Virgin Money Business Current account pros
- 25 months free business banking if you're new to Virgin Money or a new business
- 0.35% cashback
- Free money management tools including invoicing and cashflow projection
Virgin Money Business Current account cons
- 2.75% fee for spending abroad
- £6.50 monthly fee for existing Virgin Money customers or businesses established for over 12 months
- Transactional charges for routine payments
HSBC - great for no account maintenance fee for 12 months
HSBC has a business account for each business type ranging from sole-trader and single director companies to larger corporate businesses. A HSBC Kinetic current account is aimed at smaller businesses and you can benefit from 12 months of no account maintenance fee before being charged £6.50 a month. The HSBC mobile banking app lets you apply in just a few minutes within the app and you can also benefit from spending and cashflow insights. HSBC Kinetic Business account holders can apply for an overdraft of up to £30,000 and receive the funds on the same day as approval of your overdraft request. For more information on the HSBC Kinetic Business account head to the HSBC website.
HSBC Kinetic Business account pros
- No monthly account maintenance fee for 12 months
- Can apply for an overdraft of up to £30,000
- Spending categorisation
HSBC Kinetic Business account cons
- £6.50 monthly account charge once 12-month free period ends
- Must have an iPhone (series 6 or later) or Android device
- 2.75% fee for spending whilst abroad
NatWest - Great for free accounting software
NatWest's startup account is good for those businesses that have been trading for less than 12 months and whose turnover is less than £1m. With NatWest's startup account there are no monthly account fees and transaction charges are free for the first 18 months. You can also benefit from the free digital accounting tool FreeAgent which helps you to manage tax returns, invoices and cash flow. More information on the NatWest business bank accounts can be found here.
NatWest startup business account pros
- No monthly account management fee
- Free accounting tool
- Optional overdraft
NatWest startup business account cons
- Transaction fees after 18 months
- 2.75% non-sterling transaction fee
- ATM withdrawal fee after 18 month free transaction fee period
Lloyds Bank - Great for free electronic payments
Lloyds Bank has a business account for small businesses with an annual turnover below £3m. The small business account offers no monthly fees for the first 12 months with a £7 monthly charge thereafter. However, you can always benefit from free electronic payments and ATM withdrawals with a Lloyds Bank small business account. Despite Lloyds Bank currently pausing new account applications for those wishing to switch business accounts, new business accounts that aren't wishing to switch can still be opened. More information on Lloyds Bank Business accounts can be found on the Lloyds Bank website.
Lloyds Bank Start-up Business account pros
- 12 months free banking
- Free electronic payments & ATM withdrawals
- Free accountancy software for 3 months
Lloyds Bank Start-up Business account cons
- Not currently accepting applications from those wishing to switch business accounts (still accepting new applications)
- £7 monthly account fee after initial 12 months free banking
- Charge for cash and cheque payments in and out of the account
Santander - Great for cashback
Santander's 123 Business account is suitable for small businesses and startups looking to open a new business account. Currently, Santander is only processing business account applications for existing Santander account holders but it says the website will be updated once applications open to all customers. If you are an existing Santander customer wishing to open an account, you may benefit from up to £300 cashback each year depending on the credit turnover amount in your account. Those opening a new Santander 123 Business account can benefit from a discounted monthly account maintenance rate of £5 for the first 18 months and those switching from an existing business account can benefit from this for 12 months. More information on the Santander 123 Business account can be found on the Santander website.
Santander 123 Business account pros
- Earn up to £300 cashback in a year
- Discounted monthly fee
- No charge for cash deposits up to £1,000
Santander 123 Business account cons
- £12.50 monthly fee after initial new account offers
- Currently only supporting existing Santander account holders looking to open new business accounts
- 2.95% foreign transaction fee
Compare the best high street business bank accounts
In the below comparison table, we compare some of the best high street business bank accounts.
|Virgin Money||HSBC||NatWest||Lloyds Bank*||Santander*|
|Monthly cost||£6.50 (25 months free if you're new to Virgin Money or a new business)||£6.50 (No monthly account maintenance fee for 12 months)||Free||£7 (No monthly account maintenance fee for 12 months)||£12.50 (discounted to £5 for first 18 months for new accounts and 12 months for switchers)|
|Good for||Free money management tools||No monthly banking fee for 12 months||Free accounting software||Free electronic payments||Cashback|
|Free ATM withdrawals|
|Fee free spending abroad|
|Cash and cheque deposits|
|Accountancy tools integration|
|24/7 customer support|
|Extras||0.35% cashback and free money management tools including invoicing and cashflow projection||Can apply for an overdraft up to the value of £30,000 in-app||Access to the free digital accounting tool FreeAgent||Free accountancy software for 3 months||Earn up to £300 cashback in a year|
* Santander and Lloyds have temporary restrictions on new business accounts