Compare Free Business Bank Accounts

A business bank account is similar to a personal current account but is specifically designed for business use. You can open a business bank account to help keep your business transactions separate from your personal finances. This will enable you to keep track of your business income and outgoings, as well as helping you when it comes to doing your accounts and working out the tax you owe at the end of the year.

Most business bank accounts will charge you in some shape or form. However, some do not carry an annual or monthly fee. Business bank accounts that don’t charge monthly or annual fees regardless of how you use the account, are often marketed as free, but you will usually still be required to pay some fees for transactions, such as making deposits or using your card.

Some ‘free’ business bank accounts will waive annual or monthly fees for an initial period, while others may not charge these fees on a permanent basis.

If you are a sole trader, you can continue to use your personal account for your business transactions. This is because your business finances and your personal finances are one and the same, in the eyes of HMRC. However, if you have registered your business at Companies House and it is, therefore, a separate legal entity, you must set up a business bank account by law.

Most free business bank accounts will allow you to carry out your daily banking needs and will also offer additional tools to help you track your business’s finances, such as a mobile app. The precise features offered by business bank accounts will vary, however, and you’ll need to do some research to find the right bank account for your business needs.

Here are some of the features often offered by business bank accounts:

Consider the ways in which you are most likely to use your business bank account. If you are not likely to perform many transactions, you may find a free business bank account is the best option for you. However, if you are likely to use your business bank account regularly, performing numerous transactions that carry fees, opting for a business bank account that charges an annual or monthly fee, but carries smaller transaction charges, might be more sensible.

Yes, most do pay interest on balances, but at different levels, so it pays to do your homework if this is something that is of interest to you. If you have large balances held in your business bank account, however, it might be sensible to open a business savings account. Business savings accounts are likely to pay more in terms of interest on balances than free business bank accounts, which operate like current accounts for your business.