Compare Free Business Bank Accounts

  • Many business banking providers offer free banking deals to new customers
  • Free banking durations and details vary between products and providers
  • Compare free banking deals from various business banking providers

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What our Nerds say about free business bank accounts

If you run a business, you may consider opening a free business bank account, which can offer several benefits. However, it’s not as straightforward as simply opening a free business bank account and never paying any fees.

Some business accounts are only free for a limited period, before then charging a monthly or annual fee. Meanwhile, others may not charge a regular fee, but you may need to pay for certain functions. You should always check the terms of free business bank accounts, so you don’t get any surprises later on.

Rhiannon Philps Lead Writer at NerdWallet

What is a free business bank account?

A free business bank account is exactly what it sounds like – a bank account for your business that doesn’t cost you any money to open. These free accounts may be targeted at smaller businesses in particular.

Many standard business bank accounts will charge you in some way. For example, you might need to pay a monthly fee to use the account, or pay for certain functions, such as depositing cash or making payments.

However, some business accounts don’t carry any charges, and these may be called free or no-fee bank accounts.

Some of these free business accounts may be permanently free, but others may only be free for a limited introductory period. This could be 12 months or even longer, but once the promotional offer expires, you may have to pay to continue using the account.

You should always check the small print of any business bank account, so you know how long the fee-free period lasts and what charges, if any, you could expect to face after that time ends.

Bear in mind that even if a business bank account markets itself as ‘free’, you may still need to pay a small charge for some services. There may also be some limits, such as on the balance you can keep in your account and on the number of transfers you can make.

Features of free business bank accounts

Free business bank accounts will offer the basic services and functions you would expect. For example, you can:

  • make and receive payments
  • pay bills
  • set up direct debits and standing orders
  • withdraw and deposit cash
  • access your account through mobile and online banking
  • get at least one debit card for your business to use

Some free business bank accounts may allow you to make international transfers, access an overdraft, receive payment notifications, save digital receipts, and track your finances with online banking tools.

Even with a so-called free business account, you may need to pay a small fee for some of these activities.

Free business bank accounts are likely to offer more limited functions than paid accounts. For example, paid accounts may offer more integration with accounting software and help you to manage your business finances and taxes more effectively.

Pros and cons of a free business bank account

Even if your business doesn’t need a separate business bank account by law, having one can make it easier to track your business finances and also make you appear more professional.

It’s important to make sure you choose the best business bank account for your business, and consider the pros and cons of each option.

Advantages of free business accounts

Some of the benefits of a free business bank account are:

  • It’s free. Every business wants to save money wherever they can, so a free bank account can help save on some costs. Be aware that some accounts may still charge you for certain services.
  • It will keep your business finances separate from your personal finances.

Disadvantages of free business accounts

There are some potential disadvantages of a free business bank account, including:

  • It may only be free for a limited period. After this, you may need to pay a fee.
  • It may offer limited services compared to a paid account. Make sure your business account allows you to do everything you want to do.
  • There may still be some charges. Even though it is called a free account, you may need to pay for certain functions, and the cost of these can add up.

Do free business accounts charge any fees?

This depends. Some free business bank accounts will be completely free and won’t have any fees or charges, while others may have small fees for certain services.

Is it free to open a business account?

It is possible to open a business account for free.

However, once you’ve opened your account, you may need to pay certain fees. This may include a monthly fee or transaction charges.

Check the terms and conditions of an account to see what charges could apply.

Do free business accounts charge any transaction fees?

You may need to pay a fee for some, or all, of the following:

  • withdrawing or depositing cash
  • making a bank transfer
  • receiving money from abroad
  • using an overdraft

Will my no-fee business account always stay free?

This depends on the bank account you choose. Some business accounts are permanently free, while others will only offer free banking for a limited period. The provider should always make it clear if the free account is part of a promotional offer and, if it is, they should say when charges will start applying.

With some accounts, you may get a certain number of free transactions before needing to pay a fee, while others will be free as long as you have a certain balance in your account.

» MORE: Business bank account charges

Who can open a free business account?

Sole traders, partnerships and limited companies can all open free business bank accounts, although some accounts may not be open to all business types.

There may be turnover or balance restrictions on some accounts. These may stop you from opening certain accounts if your business does not meet the eligibility criteria.

You may not be able to open a business bank account if you operate in a prohibited industry. These vary across providers but can include:

  • weaponry
  • gambling services
  • illegal drugs
  • currency exchange (which may include cryptocurrencies)

Check the terms and conditions of specific providers to find out whether a chosen provider allows or prohibits your business’s industry.

How to choose the best free business bank account for me

To choose the best free business bank account for your business, you’ll need to work out what features and services you would use the most.

As some business bank accounts charge for certain services, by working out what features you will use most often you can find an account that matches the needs of your business and offers the best value for you.

Cash deposits

Bear in mind that if you regularly need to make cash deposits, it might be more convenient to choose an account with a bank that has a physical branch nearby. You may also be able to deposit cash at a PayPoint or the Post Office.

You should also check whether a ‘free’ business account would charge you to make cash deposits. Some charge a percentage of each deposit you make, while others may charge a flat fee per deposit.

Cheque deposits

If you use cheques in your business transactions, it’s worth checking whether a free business bank account will allow you to deposit or write cheques.

Some free providers do not offer cheque facilities at all. Others let you deposit cheques, either by freepost or at a branch or Post Office, but may charge you for this service.

Transfers

If your business makes numerous bank transfers a day, choosing a free bank account that charges a small fee for every transfer may not be the best choice for you. A business bank account with a monthly fee but no charges for individual services could work out cheaper.

For example, let’s say you make 100 transfers in a typical month. You have a free business bank account that doesn’t charge a monthly fee, but instead charges 20p per transfer. You would pay £20 a month for your transfers. A different bank account that includes unlimited transfers for a lower monthly fee, say £15, could suit you better.

International payments

Not all ‘free’ business bank accounts let you send or receive international payments. If this is important to the running of your business, you should ensure that your chosen free banking provider can offer this service.

Some providers may only offer international payments through a third party service.

It’s also worth checking whether you have to pay a foreign transaction fee for international transfers. Providers may charge to send money to or receive money from other countries.

Overdrafts

Overdrafts are one way that your business can borrow money. Some providers offer overdrafts on free business bank accounts, but not all.

Business banks may offer overdraft facilities.

If a provider is an e-money provider, they cannot provide an overdraft facility. You will not be able to get an overdraft or borrow money as a loan from these providers.

You can use our comparison table below to see some free business banking options and their key features. Each account states how long the account is free for and what charges could apply, so you can easily see what accounts might be best for your business.

How to open a free business bank account

You can open a free business account online or, with some providers, over the phone or in person. This depends on whether you choose an online-only bank or a bank with physical branches.

When you apply for a business bank account, you will need to provide information such as:

  • your Companies House registration number (if applicable)
  • details of company owners and directors, including their names, addresses, and national insurance numbers
  • information about your business, including evidence of what your business does, its turnover, and its trading history

» MORE: How to open a business bank account

How long will it take to set up a free business bank account?

This depends on the provider and your business. Online-only banks may be faster than traditional high street providers.

After you apply, banking providers will carry out checks on you and your business. They may look at your personal credit score as well as the credit score for your business. If your application is approved, you can then open and start using your account.

Some banks may take several days to open your account, while others may be quicker. Some providers may even allow you to open a business bank account on the same day that you submit your application.

Can you switch business accounts?

You can switch business accounts if you think a different account is a better option for your business. First, you should check with your current bank that you can leave. Once you have found an account you like, contact the new provider to see if you can switch and it should help you move over.

You can also check whether your new provider has signed up to the Current Account Switch Service, which aims to switch your account within seven working days and offers guarantees if something goes wrong with the switch. To use this service, both your old and new provider must be signed up.

Providers may have certain restrictions, so make sure you qualify for a business account before starting the switching process.

Alternatives to a free business bank account

If you’re a sole trader, you could use your personal current account for your business finances. You don’t legally need a separate business account, although it may still be useful to have.

New businesses may find some banks offer start up business bank accounts, which could offer some benefits and helpful features.

Instead of a free business bank account, you can also choose a standard business bank account with a monthly or annual fee. These may work out to be better value for some businesses than so-called free business accounts, and they often come with more comprehensive features and services.

Free Business Bank Account FAQs

Do I need a business bank account?

If you are a limited company or limited liability partnership, you are legally required to keep your business finances completely distinct from your personal ones. Having a separate business bank account is the best way to do this as most, if not all, personal accounts won’t allow you to use them for business purposes.

If you are a sole trader, freelancer, or in a general partnership, you don’t legally need to keep your business and personal finances separate, but it can still be useful to have one to make it easier to manage your accounts.

Learn more about when you need a business bank account.

What banks offer free business banking?

A range of banks offer free business bank accounts, including online-only banking providers and high street banks. They may offer free business banking on a permanent basis or for a limited number of months. You can compare providers that offer free business accounts here.

Can I open a business account with bad credit?

Yes, if you or your business have bad credit, you can still open a business account. Some banks offer business accounts with no credit checks, which could be helpful if your business credit rating isn’t perfect. However, check with individual providers as some banks may not be able to help.

» MORE: How to improve your business credit rating

Do free business bank accounts pay interest on balances?

If you are looking to earn interest on surplus cash, it may be worth considering a business savings account. Interest rates will vary between accounts and these are subject to change.

Are free business account funds FSCS protected?

Not always. If your business account is with a licensed bank, then your funds will be protected by the Financial Services Compensation Scheme (FSCS) should the bank go bust. What’s more, if your business is a separate legal entity, such as a limited company, then you could be eligible to receive up to £85,000 from your business account.

However, if you are a sole trader there is no legal separation between your business and personal finances. This means, if you have a business and personal account with the same provider, you can only reclaim up to £85,000 through the FSCS in total for both accounts.

Some business account providers offer e-money accounts, which are similar to a bank account except they are not protected by the FSCS. However, providers should safeguard your money by keeping your funds separate from their own business funds. Check the terms and conditions of the provider to see what protection an account comes with.

Can I use a personal account for my small business?

If you are a sole trader or a freelancer, you can use a personal account for your business finances, as long as it doesn’t break any terms and conditions. However, if your business is a separate legal entity – for example, a limited company or a limited partnership – you cannot use a personal account. You will need to open a separate business account instead.

About the author

Rhiannon Philps
Rhiannon is a financial writer for NerdWallet, with a particular interest in personal finance and insurance guides for consumers. Read more
Kristina Fox
Kristina is a writer at NerdWallet. A recent graduate trading French for finance, she has experience creating content for student newspaper Cherwell and an edtech company. Read more

Compare business bank accounts

Choose your business current account options

16 products found
    • Offer
      Free insights dashboard M-Track Manage all your business data in one place, including data from Sage, Xero, Google, Shopify and more.
      Virgin Money logo

      Virgin Money M Account for Business

      • Monthly Fee
        Free
      • Card Purchases
        Free
      • Bank Transfers
        Free
      • Overdraft
      • Access
        App/Online
      Offer
      25 months' fee free day-to-day banking for eligible customers when you open or switch to this account. Fees and charges apply thereafter.
      Virgin Money logo

      Virgin Money Business Current Account

      • Monthly Fee
        £6.50
      • Card Purchases
        Free
      • Bank Transfers
        Free
      • Overdraft
      • Access
        Branch, app & online
      1 more from Virgin Money
  • Offer
    No monthly account fees for the first 12 months
    HSBC logo

    HSBC Kinetic

    • Monthly Fee
      £6.50*
    • Card Purchases
      Free
    • Bank Transfers
      Free
    • Overdraft
    • Access
      App & Online
    Offer
    FreeAgent for Free *
    Mettle logo

    Mettle by NatWest

    • Monthly Fee
      Free
    • Card Purchases
      Free
    • Bank Transfers
      Free
    • Overdraft
    • Access
      App & Online
    *To get FreeAgent for free you'll need to make at least one transaction a month from your Mettle account. A saving of £114 a year (based on FreeAgent's lowest tariff).
    Offer
    FREE Tide Accounting + VAT Manager until end of March Tide Accounting is available to non-vat registered Sole Traders. VAT manager is available to VAT registered sole traders and limited companies (LTDs).
    Tide logo

    Tide Business Bank Account

    • Monthly Fee
      Free
    • Card Purchases
      Free
    • Bank Transfers
      20p
    • Overdraft
    • Access
      App & Online
    Monzo logo

    Monzo Business Lite Account

    • Monthly Fee
      Free
    • Card Purchases
      Free
    • Bank Transfers
      Free
    • Overdraft
    • Access
      App & Online
    Cashplus logo

    Cashplus Business Bank Account

    • Monthly Fee
      Free
    • Card Purchases
      Free
    • Bank Transfers
      30p
    • Overdraft
    • Access
      App & Online
    Offer
    Free VAT and invoicing tools + No account fee for the first month
    ANNA Money logo

    ANNA Money - Pay as you go

    • Monthly Fee
      Free
    • Card Purchases
      Free
    • Bank Transfers
      20p
    • Overdraft
    • Access
      App only
    • Offer
      Free everyday business banking for first 30 months + free access to the Go Get Paid app *
      The Co-operative Bank logo

      The Co-operative Bank Directplus Business Account

      • Monthly Fee
        £7
      • Card Purchases
        35p
      • Bank Transfers
        35p
      • Overdraft
      • Access
        Branch, App & Online
      *For new customers, if you maintain a credit balance of £1,000+ there is no monthly service charge for 30 months, and all automated debits including standing orders, Direct Debits, Faster Payments, debit card payments and writing up to 30 cheques per charging period are free. Charges apply for exceeding these monthly limits.
      Offer
      Free everyday business banking for first 30 months + free access to the Go Get Paid app *
      The Co-operative Bank logo

      The Co-operative Bank Business Current Account

      • Monthly Fee
        £10*
      • Card Purchases
        Free
      • Bank Transfers
        Free
      • Overdraft
      • Access
        Branch, App & Online
      *For new customers, if you maintain a credit balance of £1,000+ there is no monthly service charge for 30 months, and all automated debits including standing orders, Direct Debits, Faster Payments, debit card payments and writing up to 30 cheques per charging period are free. Charges apply for exceeding these monthly limits.
      1 more from The Co-operative Bank
    • Revolut logo

      Companies: Revolut Free

      • Monthly Fee
        Free
      • Card Purchases
        Free
      • Bank Transfers
        Free
      • Overdraft
      • Access
        App & Online
      Revolut logo

      Freelancer: Revolut Free

      • Monthly Fee
        Free
      • Card Purchases
        Free
      • Bank Transfers
        Free
      • Overdraft
      • Access
        App & Online
      Revolut logo

      Freelancer: Revolut Professional

      • Monthly Fee
        £7
      • Card Purchases
        Free
      • Bank Transfers
        Free
      • Overdraft
      • Access
        App & Online
      2 more from Revolut
    • Offer
      12 months’ free day-to-day business banking for new businesses *
      Bank of Scotland logo

      Bank of Scotland Start Up Account

      • Monthly Fee
        £7*
      • Card Purchases
        Free
      • Bank Transfers
        Free
      • Overdraft
      • Access
        Branch, App or Online
      *Free day-to-day Business Banking includes electronic payments, cheques, cash, deposits and withdrawals. You must operate your account in credit or within agreed limits. All lending is subject to status. Security may be required.
      Offer
      12 months’ free day-to-day business banking for new businesses *
      Bank of Scotland logo

      Bank of Scotland Switcher Account

      • Monthly Fee
        £7*
      • Card Purchases
        Free
      • Bank Transfers
        Free
      • Overdraft
      • Access
        Branch, App or Online
      *Free day-to-day Business Banking includes electronic payments, cheques, cash, deposits and withdrawals. You must operate your account in credit or within agreed limits. All lending is subject to status. Security may be required.
      1 more from Bank of Scotland
  • Offer
    12 months’ free day-to-day business banking for new businesses *
    Lloyds Bank logo

    Lloyds Bank Business Banking Start Up Account

    • Monthly Fee
      £7*
    • Card Purchases
      Free
    • Bank Transfers
      Free
    • Overdraft
    • Access
      Branch, App or Online
    *Free day-to-day Business Banking includes electronic payments, cheques, cash, deposits and withdrawals. You must operate your account in credit or within agreed limits. All lending is subject to status. Security may be required.

Our comparison service features a selection of providers from whom we receive commission. This table is initially ordered according to our commercial arrangements. Use the sorting options at the top of the comparison table to order by other criteria.

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