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Best Business Bank Accounts UK July 2025

Finding the right business bank account for your business – whether it’s big or small – can help transform its finances. But where should you start?

A business bank account is a current account designed for businesses, including sole traders, limited companies, partnerships and not-for-profit organisations.

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Virgin M Account for Business

For businesses with a turnover of less than £1 million, the M Account for Business gives you free day-to-day online business banking for all your everyday needs.

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Our Best Business Bank Accounts

Each of these products may be one of a range offered by the provider. Always check terms & conditions for suitability before applying. Commission earned affects the table sort order. Only affiliated products are shown. Other products are available. Read our guide to ratings.

Virgin Money M Account for Business


Free

Free

From free

3 months free QuickBooks or Xero

  • Available for eligible businesses with up to £1m annual turnover
  • Must be based and operated in the UK (excluding Channel Islands, Isle of Man and Northern Ireland)
  • All owners, directors, senior managers and account signatories must be over 18 years old
NerdWallet's Review Summary

Virgin Money’s four business bank accounts include the free M Account for Business. This account includes free basic transactions, such as standing orders and direct debits. Cash deposits cost 90p per £100, but cheques can be paid in for free via the app.

Overdrafts of up to £25,000 are available, with Virgin Money charging an establishment fee of 2.5% (minimum £120) and representative EAR of 13.6%.

Virgin Money business accounts can be integrated with QuickBooks or Xero accounting software, and opening an account will give you a free three-month trial with either. All accounts feature FSCS protection on deposits of up to £85,000.

Eligibility criteria: Applicants must have a turnover of less than £1 million. Businesses should be based in the UK (excluding Northern Ireland, the Channel Islands and the Isle of Man) and have owners, directors, senior management and account signatories above 18 years old.

For further details, read NerdWallet’s Virgin Money Business Account Review.

Virgin Money key features:

  • Account perks: There are a number of account perks, such as cashback when using your business debit card and discounts with selected retailers and merchants. 
  • FSCS protection: Deposits of up to £85,000 are protected by the Financial Services Compensation Scheme.
  • Charities: The bank has dedicated current accounts for charities and does not charge fees for every day banking if the charity has less than £1 million turnover a year.
NerdWallet's Pros & Cons

Pros:

  • No monthly fee
  • Free basic transactions
  • More than a third of Virgin Money business accounts open the same day

Cons:

  • Free account only for businesses with annual turnover under £1 million
  • No branches in the South of England, Wales or Northern Ireland

This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

Wallester Business Free Account


Free

Free

Free

Get 300 free virtual cards

  • Must be a legally registered business entity (e.g., Ltd, LLP, sole proprietorship) in the UK, European Economic Area (EEA), USA, Canada, or other supported regions
  • All account holders and authorised users must be 18 years or older
  • Suitable for businesses of any size and industry, including individual entrepreneurs
NerdWallet's Review Summary

A simple, fee-free account for managing expenses and issuing virtual debit cards that offers an impressive alternative to traditional business banking. 

Designed for startups, SMEs, and digital-first teams, this account helps you control spending. A smart choice for businesses needing scalable card and expense management.

Wallester Key Features:

  • 300 free Virtual Cards included on the plan.
  • Unlimited physical cards available.
  • Global card use anywhere that accepts Visa.
  • International card payments in 10 currencies.
  • No monthly fees or setup costs.
  • Integrated accounting with QuickBooks and Xero.
  • Real-time expense tracking and budget control tools.

Who Can Apply?

UK, Swiss, or EEA-registered limited companies or limited partnerships.

NerdWallet's Pros & Cons

Pros:

  • No monthly subscription fee
  • Issue hundreds of business expense cards instantly
  • Great for international and remote teams
  • Smart budgeting and expense management tools

Cons:

  • Not a full-featured business bank account
  • No overdraft or business loan options
  • Mobile app has mixed reviews
  • Not covered by the FSCS protection scheme

This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

Best for tracking real time expenses

Revolut Basic Business Account


£10

Free

10 free per month

n/a

  • Available for limited companies, PLCs, LLPs, Partnerships & unlimited companies
  • Currently available for companies registered in and with a physical presence within the European Economic Area (EEA) and Switzerland, US and AU
Review Summary

Revolut’s Basic account, which is for limited companies and incorporated businesses, costs £10 per month. Local transfers cost 20p each outside a monthly allowance of ten fee-free transactions. Unfortunately, Revolut does not allow cash or cheque deposits.

In addition, there are no borrowing options available with Revolut. However, accounting software from providers, including Xero and FreeAgent, can be integrated with an account. 

For sole traders and freelancers, Revolut also has a range of different accounts which cost between £0 and £45 per month.

Eligibility criteria: Companies applying for a business account with Revolut should be active and fully incorporated. These accounts are not for sole traders, charities or companies active in the public sector, though Revolut’s Pro accounts can be used by sole traders. If applying for a business account, make sure your legal home address is in the UK, European Economic Area (EEA), Switzerland, Australia, Singapore or the United States. 

To find out more, read NerdWallet’s Revolut Business Account Review.

Revolut key features:

  • Cross borders: Revolut accounts have great features for international businesses, including support for more than 25 currencies and £1,000 per month to exchange at the interbank rate.
  • Great app: Revolut’s mobile app is one of the most popular on the market. 
  • No FSCS protection: Deposits not covered by the Financial Services Compensation Scheme.
NerdWallet's Pros & Cons

Pros:

  • Sole trader account with no monthly fee available
  • Great international payment features
  • Innovative banking app

Cons:

  • All accounts for limited companies have a monthly fee
  • You cannot deposit cash or cheques
  • Accounts not FSCS protected
  • Transaction charges apply outside of monthly allowance

This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

Best for International Banking

Barclays Business Account


Free for 12 months

Free

From free

Free invoicing and accounting software

  • Must have an annual turnover between £400k- £6.5m
  • Must have a straightforward and clearly defined ownership structure
  • Must be at least 18 years old and be based and operate in the UK – including business owners
Review Summary

Barclays offers accounts for start-ups and more established businesses and we have picked out the latter. It costs £8.50 per month following a year-long introductory period, though simple electronic payments are free. Cash and cheques can be deposited, with cash costing 60p per £100 and cheques at 60p each. 

Customers can get a business overdraft of as much as £50,000 from Barclays, with representative EAR standing as high as 17.42%. 

When it comes to accounting software, Barclays accounts can integrate with multiple providers and customers receive access to FreshBooks for free.

Eligibility criteria: Businesses must have been trading for more than 12 months for this account, though Barclays does have a startup account for younger companies. You must be 18 years old or above, have the right to live in the UK and be able to provide a three-year history of UK addresses. The account is for sole traders and limited companies. 

For more details, read NerdWallet’s Barclays Business Account Review.

Barclays key features: 

  • Account access: Barclays accounts can be accessed online, via the app, over the phone, or at a branch.
  • Credit facilities: Banking with Barclays can offer access to credit facilities, including loans, mortgages and overdrafts.
  • FSCS Protection: Eligible deposits up to £85,000 are protected by the Financial Services Compensation Scheme (FSCS).
NerdWallet's Pros & Cons

Pros

  • Tailored accounts for start ups, established businesses, charities and community groups
  • Free access to FreshBooks accounting software
  • Branches, and at Post Offices, throughout the UK

Cons

  • Monthly fee of £8.50
  • Start-up account only for businesses less than a year old

This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

Airwallex Business Account


Free

Free

Free

10% cashback on international transactions

  • Must be a registered business (e.g. Ltd, LLP, or partnership) with operations in a supported country
  • All directors and beneficial owners must be 18 years or older
  • Certain business types are restricted (e.g. gambling, arms dealing, charities) and may not be eligible
NerdWallet's Review Summary

A cost-effective bank account for sending money globally ideal for digital first teams.

If your business works across borders and you need to pay overseas suppliers, remote teams or accept international payments, Airwallex is a great choice as an alternative to a traditional bank account.

Airwallex Key Features:

  • Free international transfers to 120+ countries.
  • £0 monthly fee if you hold or deposit £10,000/month.
  • Interbank exchange rates — no hidden FX fees.
  • 10 free company cards with no international charges.
  • Works with Xero, QuickBooks, and other tools.
  • Open to businesses in the UK and 50+ countries.

Who can apply?
Sole traders, limited companies, LLPs, and partnerships in the UK and many other countries.

NerdWallet's Pros & Cons

Pros:

  • Free plan available if you meet balance/deposit threshold
  • Save on international payments and FX fees
  • Great for remote or international teams
  • Handy integrations with accounting software

Cons:

  • No FSCS protection
  • Can’t deposit cash or cheques
  • No loans or overdraft facilities

This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

Best for global businesses

Tide Business Account – Free


Free

Free

20p

Get £100 cashback when you open a Tide business bank account

  • For registered business accounts: Must be a director of a UK company registered with Companies House.
  • For sole trader accounts: Must be a UK-based sole trader or freelancer with a valid UK home address and be registered with HMRC
  • For all accounts: you must be aged 18+, have a valid UK phone number and address, and hold a compatible device registered to a UK App or Google Play store
NerdWallet's Review Summary

Tide has four business current accounts, including a free account with no monthly fees. Basic transactions entering or leaving your account cost 20p each with this account, while cash deposits at the Post Office cost 0.99% of the amount deposited or a £2.50 minimum or 3% at PayPoint. 

Cheque deposits can be done via the Tide app. In addition, Tide does not offer a business overdraft facility.

Tide customers can integrate their accounts with accounting software providers, such as Sage, QuickBooks, Xero, FreeAgent, ClearBooks and more. 

Eligibility criteria: Applicants must be aged 18 plus and have a UK-based business.

For more details, read NerdWallet’s Tide Business Account Review.

Tide key features:

  • Protected: Eligible deposits of up to £85,000 in new Tide accounts are protected by the Financial Services Compensation Scheme (FSCS).
  • Free and paid accounts: Tide customers can enjoy free basic accounts, or more comprehensive paid packages.
  • Business lending: Tide offers business lending options, as well as a business credit builder feature.
NerdWallet's Pros & Cons

Pros:

  • Well-reviewed mobile app
  • No monthly fee
  • Most new business accounts open within minutes

Cons:

  • Basic UK transfers cost 20p each
  • No branches

This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

Monzo Lite Business Account


Free

Free

Free

n/a

  • Available to sole traders, or the director of a registered limited company by shares (Ltd)
  • Must be based in the UK
NerdWallet's Review Summary

Monzo’s free Lite account charges no monthly fees and includes free basic UK bank transfers. Cash and cheque deposits are possible, but cash deposits cost £1 and are limited to £3,000 per month for sole traders and £10,000 for limited companies.

Overdrafts of £2,000 are available for eligible sole traders, though interest rates as high as 39% EAR apply. Monzo accounts can be managed online, or via its well-received mobile app. Monzo shines with additional features, including an instant access savings pot, fee-free spending abroad and 24/7 customer service.

On the downside, accounting software cannot be integrated with Monzo’s Lite account. However, Xero, FreeAgent and QuickBooks are compatible with Monzo’s Pro account, which costs £9 per month, or its Team account, which costs £25 per month. The Pro account also includes a six-month free trial of Xero for new users, While the Team account offers an eight-month trial.

Eligibility criteria: Monzo applicants must be sole traders or limited companies by shares. They also need to be based and registered in the UK. 

For further details, read NerdWallet’s Monzo Business Account Review.

Monzo key features:

  • Quick set-up: Most customers get an account on the same day, applying via the app.
  • FSCS protection: Deposits of up to £85,000 are protected by the Financial Services Compensation Scheme.
  • 24/7 customer support: You can contact Monzo’s in-app customer support around the clock with urgent concerns. 
NerdWallet's Pros & Cons

Pros:

  • No monthly fee
  • Open account on the day you apply for over 90% of customers
  • Free basic transactions

Cons:

  • No phone or branch banking
  • Business accounts not available to charities or partnerships
  • No accounting software integration with the Lite account

This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

Best Online

Zempler Bank Business Go Account


Free

Free

3 free per month

n/a

  • Available to UK registered companies with at least one UK resident director or UK-based sole traders and self-employed
  • Applicants must be aged 18+ and have a valid UK phone number and residential address
NerdWallet's Review Summary

Zempler Bank, which has rebranded from Cashplus, offers three accounts. Its Business Go account has no monthly fee, though basic payments cost 35p each after using up a monthly allowance of three free transactions.

Cash deposits at a Post Office are subject to a £4 minimum fee or 0.55% of the total amount paid in. Cheque deposits are not possible with a Zempler account.

Zempler does offer a business overdraft of up to £2,000, with customers paying an annual fee of £50 for access. The first £5 of the overdraft is interest free, with interest rates detailed upon application. 

Xero, QuickBooks and Sage accounting software can all be integrated with a Zempler business bank account.

Eligibility criteria: This account is open to sole traders, limited companies, partnerships and charities.

For more details, check out NerdWallet’s Zempler Bank Business Account review.

Zempler Bank key features:

  • Credit and overdraft facilities: You can get a business overdraft or business credit builder tools with Zempler Bank.
  • FSCS protection: Zempler Bank is a fully licensed bank, so your eligible deposits of up to £85,000 are protected by the Financial Services Compensation Scheme (FSCS).
NerdWallet's Pros & Cons

Pros:

  • No monthly fee
  • No credit check
  • Same-day account opening for 99.9% of customers
  • Overdraft available

Cons:

  • No cheque deposits
  • No branches
  • Transfers out of 35p each after monthly allowance used up
  • Overdraft limited to £2,000 and fees apply

This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

No Credit Checks

NatWest Start Up Business Account


Free

Free for 24 months

Free for 24 months

Free banking on everyday transactions for the first 2 years

  • Available to eligible customers over 18, who have the right to be self employed in the UK
  • This ‘Startup business account’ is available for businesses that have been trading for less than 1 year and have a projected or existing annual turnover of less than £1m
NerdWallet's Review Summary

NatWest’s accounts for start ups and more established businesses are both free of monthly fees. However, following a free 24-month period, all transactions carry a cost. For example, basic UK transactions, such as standing orders and direct debits, cost 35p every time they enter or leave an account.

Cash deposits cost 70p per £100 and cheques cost 70p each. 

Meanwhile, overdrafts of up to £50,000 are available, though arrangement fees of between £50 and 1.5% apply. On a £25,000 overdraft there is a representative EAR of 13.81%.

Accounting software integration is available with FreeAgent, which is included for free with a NatWest business account. 

Eligibility criteria: Accounts are limited to businesses that have been trading for less than 12 months, have turnover under £1 million and are registered in the UK. Applicants must be 18 or older. One person on the application must be a UK resident. Applicants in Scotland may be directed to apply for an account with RBS, while those in Northern Ireland may be redirected to Ulster Bank.

For more details, see NerdWallet’s NatWest business account review.

NatWest key features:

  • In-branch support: Customers across England and Wales can head into NatWest branches for customer service in person.
  • Introductory offer: Day-to-day transactions are free for two years and there are no monthly fees.
  • FSCS protection: Eligible deposits up to £85,000 are protected by the Financial Services Compensation Scheme (FSCS).
NerdWallet's Pros & Cons

Pros:

  • Manage accounts online,via the app, branch, Post Office or phone
  • Free accounting software from FreeAgent

Cons:

  • No branches in Scotland or Northern Ireland
  • NatWest’s start-up account only open to newer businesses
  • Fees for all transactions after a two-year free trial
  • New accounts take an average of 42 days to open

This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

Cynergy Bank Business Current Account


Free for 12 months

Free

Free

Earn interest on every penny

  • Available to UK-registered businesses, including sole traders, partnerships, limited liability partnerships (LLPs), and limited companies
  • All directors, partners, and significant shareholders must be 18 years or older
  • All individuals associated with the account must be UK residents
  • Not available to clubs, societies, charities, or trusts
  • NerdWallet's Review Summary

    A straightforward UK business account with unlimited transactions and interest-earning potential.

    Ideal for UK-based sole traders or small business owners looking for a solid, no-frills business account.

    Cynergy Bank Key Features:

    • A full year to try without any cost, then £5/month.
    • Unlimited free standard transactions.
    • Cash deposits at HSBC branches for 65p per £100 and free cheque deposits.
    • Earn interest on your current account balance.
    • Access to overdrafts and business loans.
    • FSCS protection up to £85,000.
    • Same-day account opening available.

    Who can apply?

    UK-based sole traders, limited companies, and LLPs.

    NerdWallet's Pros & Cons

    Pros:

    • Free for the first year
    • Unlimited free transactions
    • Interest-earning current account
    • Same-day setup possible

    Cons:

    • £5/month after the first year
    • No integration with accounting software
    • Mobile app has mixed reviews

    This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

    Best account for savers

    The Co-operative Bank Business Bank Account


    Free

    Free

    Free

    Free everyday digital business banking + access to selected Clover payment terminals for £1 a month*

    • Must be aged 18 or over
    • Must be a UK resident with a business address in the UK
    • Available to sole traders, partnerships, LLPs, and UK-registered limited companies
    NerdWallet's Review Summary

    The Co-Operative Bank offers six different business bank accounts, including free options like the Business Current Account and the Community DirectPlus account for charities and community groups. Basic UK transactions are free with the Business Current Account account, though cheque deposits cost £1.50 and cash deposits are charged at £1.50 per £100.

    Overdrafts are available up to £250,000, though an arrangement fee of 1.5% or £50 (whichever is higher) applies. The Co-Operative Bank advertises representative EAR of 10.75% on overdrafts up to £25,000.

    Accounting software, including Xero and QuickBooks, can be integrated with a Co-Operative Bank business account.

    Eligibility criteria: This account is for sole traders and limited companies with one director and a business address in the UK. Applicants and key people must be 18 or over and a UK resident.

    For further details, read NerdWallet’s The Co-operative Bank Business Account Review.

    The Co-operative Bank key features:

    • Range of accounts: The Co-op Bank offers six business accounts, so there are options suitable for almost every business type, including charities.
    • FSCS protection: Your eligible deposits, up to £85,000 across all your accounts, are protected by the Financial Services Compensation Scheme (FSCS).
    • Access to overdraft and credit facilities: With a Co-op business account, you can apply for an arranged overdraft, a charge card for expenses, a credit card, and a variable rate business loan.
    • Customer support options: The account can be managed online, over the phone, via the app and at a branch.
    NerdWallet's Pros & Cons

    Pros:

    • No monthly service fee
    • Free basic transactions
    • Account management online, by phone, via app or branch
    • Arranged business overdraft of up to £250,000

    Cons:

    • Takes, on average, 10 days to open an account
    • No branches in Northern Ireland

    This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

    Best for Charities

    Countingup Starter Business Account


    Free for 3 months, from £3 thereafter*

    Free

    30p

    Get your first 3 months free

    • Must be a UK resident, at least 18 years old and running a small business (Sole Trader/Director of a limited company)
    • If your maximum monthly deposit is exceeded, then your account will automatically upgrade to the appropriate subscription plan. You will not be able to downgrade from this plan.
    Review Summary

    Designed for sole traders and small businesses who want to keep things simple, Countingup combines a business current account with built-in accounting tools. 

    You only pay for what you use as pricing is based on how much you deposit each month.

    Here’s how it works:

    • Deposit under £750/month? You’ll pay £3/month.
    • Deposit between £750–£7,500? It’s £9/month.
    • Over £7,500/month? That’s £18/month.

    Countingup Key Features:

    • All-in-one account with built-in accounting.
    • Auto-categorises transactions & estimates tax.
    • Real-time profit/loss dashboard.
    • Fast account opening – often within 2 hours.
    • App rated highly for ease of use.

    Who Can Apply?

    UK residents aged 18+ who are either sole traders or directors of limited companies.

    NerdWallet's Pros & Cons

    Pros:

    • Built-in accounting tools – no need for separate software
    • Quick, fully digital application
    • Great for solo business owners
    • Transparent pricing tied to deposit volume
    • Cash deposits supported at Post Office branches – (0.5%, £2 minimum)

    Cons:

    • No free plan available
    • Every transaction costs 30p
    • Doesn’t support cheque deposits
    • No FSCS protection

    This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.

    Best for small business
    Back to Top

    What is a business bank account?

    Business bank accounts give businesses a place to keep, send and receive money. They are similar to personal bank accounts, but are specifically for business transactions and needs.

    They will also bear the name of your business and allow you to access features and customer support that is specifically tailored to business customer requirements. They can also help businesses to build a credit rating, organise their finances and keep up with tax obligations. 

    » MORE: What is a business bank account?

    How business bank accounts work

    Business bank accounts, sometimes also known as business current accounts, operate similarly to personal current accounts. Generally speaking, you can withdraw or deposit cash and make payments using a debit card, whether you’re shopping online or in a store. You can also accept incoming payments, transfer money to others, and set up standing orders or direct debits. 

    There are different types of business bank accounts available. These include:

    Choosing a business bank account

    Different factors are important to different customers. NerdWallet’s 2025 business banking survey found 70% of business owners are happy to consider a provider with no physical branches, with 43% saying they find digital banking easier. But every business owner is different, and different factors might matter more to you.

    Then compare your business bank account options, taking the following factors into account.

    » MORE: Best Business Loans

    How to choose the best small business bank account

    For small business owners, picking the right bank account will impact on day-to-day operations. Some providers offer products branded as ‘Small Business Account” or similar which are specifically designed for new or small businesses. 

    These include features like spending insight tools and access to business mentoring, discounts or free access to other key products, such as accounting software and insurance.

    The key thing to remember is to find the account that best matches the requirements of your small business. 

    For example, an account with no monthly fees might sound great on the surface. However, if everyday transactions carry costs and your small business requires a lot of buying and selling, you could pay a steep price. 

    Do business bank accounts charge fees?

    Most business bank accounts charge some sort of fee. Generally, these can be separated into a regular monthly fee (also sometimes called a maintenance fee) and transaction or service fees. 

    Transaction or service fees include:

    Basic transactions: This term (often interchangeable with ‘transfers’, ‘automated transaction’, ‘electronic payment’ or similar) is usually a catch-all term for day-to-day transactions such as standing orders, direct debits and BACs payments. They are sometimes free or free in the case of account credits.

    Cash deposits: Most accounts will charge a fee for adding cash to an account. This fee is generally a percentage of the total deposit, though a minimum flat fee may apply.

    Cheque deposits: Cheque deposits normally carry a cost, which is often a flat fee for each cheque you are paying in. 

    ATM withdrawals: These are free with some providers, though some will charge a flat fee for getting cash out of your account.

    International transactions: These fees vary considerably across different providers. If your business will heavily rely on international payments, finding a bank account that caters to this is key.

    Overdraft arrangement fee: This is charged when setting up a business overdraft. It may be a flat fee or a percentage of your new overdraft limit. These charges may recur annually. 

    Costs vary from account to account, but providers usually provide a price list which details the cost of all available transactions and services.

    » MORE: Business bank account charges explained

    Business bank account pros and cons  

    Advantages of a business bank account

    Disadvantages of a business bank account

    Can you switch business bank accounts? 

    Switching business accounts is very similar to switching personal bank accounts. 

    Businesses with fewer than 50 employees and annual turnover of less than £6.5 million can take advantage of the current account switching service. This service simplifies the process and ensures that balances and regular payments are automatically moved across to the new account, while any attempted payments into the old account will be transferred over too. 

    The providers of both your old and new business bank accounts need to be signed up to the Current Account Switch Service to change accounts in this streamlined way.

    » MORE: How to switch business bank account

    Best business bank account FAQs

    How do I open a business bank account?

    What you need to do to open a business bank account in the UK will vary depending on the account provider.

    You can usually apply in one of the following ways:

    • In a branch: Talk in person with a member of staff before applying.
    • Online via the provider’s website: Apply from anywhere, and you could open an account on the same day.

    Through a provider’s mobile app: Set up mobile banking and manage your account on your phone as soon as it’s open without having to wait for your card and account details in the post.

    Who can open a business bank account?

    Sole traders can open a business bank account. Providers may offer you a specific sole trader account or a standard business account.

    If you run a limited company or a limited liability partnership, no matter its size, you are likely to be able to open a business bank account.

    Charities, clubs and societies may be able to open a business account. Eligibility is likely to vary between providers, so it’s worth shopping around if you’re looking to open a bank account for a not-for-profit organisation.

    Some business bank accounts have strict eligibility criteria, such as minimum or maximum turnover or trading history. Providers may also have restrictions on which business structures and industries can open an account, so it’s a good idea to look through the terms of an account to make sure you’re eligible before applying.

    Do I legally need a UK business bank account?

    Whether you legally need a business bank account depends on the structure of your business.

    Limited companies and limited liability partnerships (LLPs) should open a business current account to manage their money and keep business and personal funds separate.

    This is because your business is a separate legal entity to you, so you must have a duty to keep its finances away from your own. One of the ways to do this is by using a business bank account.

    Not-for-profit organisations such as charities may find it useful to have a separate business account to manage their finances and keep accurate records of income and expenditure.

    Sole traders can also open business bank accounts, though it’s not a requirement; sole traders can also use a personal account for their business.

    What is required to open a business bank account?

    Along with personal ID, proof of your residential address, and proof of your business address, you may also be asked to show evidence of your annual turnover or estimated income, such as your previous tax return or your business plan.

    How long does it take to open a business bank account?

    It can take anything from just a few minutes to a few weeks to open a business current account. It depends on the provider, and how long it takes to complete its checks.

    What are small business accounts?

    Some providers offer accounts that are tailored for small or new businesses. These products often include additional extras that might appeal to small business owners, such as discounts on third party accounting software or access to business mentoring programmes.

    However, small businesses will often be eligible for normal business accounts too, though there might be requirements based on turnover or how long you have been trading.

    Which bank account is best for a small business?

    Every small business is different, and there is no one-size-fits-all answer. However, small business owners may want to focus on accounts with low charges and features that are relevant to their business. This way, small business owners can ensure they get value for money and do not find themselves paying for features they are unlikely to use.

    What is Representative EAR?

    When examining overdrafts, you might often see reference to the equivalent annual rate (EAR). This term represents the interest and compound interest a borrower would pay over 12 months if they used the product. However, EAR does not include additional fees that may be charged by a lender.

    It’s easy to confuse EAR with the annual equivalent rate (AER). While they look similar, AER is almost a mirror of EAR. That’s because it refers to the interest that a saver will earn with a product like a savings account, while EAR refers to the interest a borrower will pay.

    A final variant worth looking at here is annual percentage rate (APR). This is similar to EAR, but it crucially includes additional fees that a borrower may have to pay.

    When it comes to the term ‘representative’, you should be aware that this means a rate is offered to more than half of customers. However, that does not mean that you will be offered the representative rate, as your financial circumstances may not qualify.

    Can you open a business bank account with a bad credit history?

    Even if you have bad credit, there are still some business bank accounts that you can open. This is because some providers do not require a credit check as part of their application process. 

    For example, CardOne Money allows business owners to open an account with no credit check. Meanwhile, Zempler Bank even has a tool to help businesses with a poor credit score to improve their rating.

    » MORE: Business bank accounts with no credit checks

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