Sole Trader Bank Accounts
Compare our Best Sole Trader Business Accounts
Opening a dedicated business account as a sole trader can help keep your personal and business finances separate and make running your business easier. Finding the best sole trader bank account for you is the key.
Sole trader bank accounts are there to help save you valuable time and effort as a business owner. If you’re self-employed, working for yourself part-time or full-time, and haven’t registered your business as a limited company, you’re probably classed as a sole trader. And a sole trader current account could make your life easier. Compare sole trader business bank accounts below and apply today.
Our Top Sole Trader Bank Accounts
Our Best Sole Trader Account Providers
Each of these products may be one of a range offered by the provider. Always check terms & conditions for suitability before applying. Only affiliated products are shown. Other products are available. Read our guide to ratings.
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 straightforward and highly-rated business accounts are a great option for sole traders and anyone just starting out. In particular, there’s the Monzo Lite Business Account which has no monthly fee but still offers an array of useful business banking services, including various payment options, cash and cheque deposits, international payments and digital receipts. If you’re willing to pay a monthly fee, and upgrade to its Pro account, you can also integrate accounting software and make use of Monzo’s automatic Tax Pots savings feature.
For further details, read NerdWallet’s Monzo Business Account Review.
Monzo key features:
- Speedy account opening: Most accounts are up and running on the same day as an application is made.
- Free UK transfers: Make unlimited free electronic payments in the UK.
- 24/7 customer support: Monzo’s in-app customer support is available at all hours.
- FSCS protection: Deposits of up to £120,000 are protected by the Financial Services Compensation Scheme.
NerdWallet's Pros & Cons
Pros:
- Monzo’s Business Lite account has no monthly fees and free bank transfers in the UK.
- Manage your money online or via Monzo’s mobile app.
- Most get access to online banking on the same day as applying.
Cons:
- No phone banking or branches.
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
Virgin Money M Account for Business
- 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 M Account for Business is a good option for sole traders who want a great all-round business account but don’t want to pay a monthly fee. Account features include free UK bank transfers, instant payment notifications, and cashback on debit card purchases. Cheques can be deposited via its highly-rated mobile app. The main criteria you need to meet is a turnover of less than £1 million a year.
For further details, read NerdWallet’s Virgin Money Business Account Review.
Virgin Money key features:
- Free everyday banking: Basic electronic transactions are free with an M Account for Business.
- Account extras: Perks include cashback when using the business debit card and discounts with selected retailers and merchants.
- Management and support: Bank online, via app, over the phone or in branch.
- FSCS protection: Deposits of up to £120,000 are protected by the Financial Services Compensation Scheme.
NerdWallet's Pros & Cons
Pros:
- No monthly fee.
- Six months fee-free trial of Xero accounting software.
- Earn 0.25% cashback on debit card spending.
Cons:
- The free M Account is only available to businesses with less than £1 million annual turnover.
- 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.
The Co-operative Bank Business Bank Account
NerdWallet's Review Summary
The Co-operative Bank’s Business Bank Account will appeal to sole traders who like to bank ethically but don’t want to pay a monthly fee. There’s also free and unlimited basic transactions, taking in direct debits, ATM withdrawals and debit card spending, plus free access to Go Get Paid invoicing software. A £200 cash bonus is on offer when opening an account too.
For further details, read NerdWallet’s The Co-operative Bank Business Account Review.
The Co-operative Bank key features:
- Free basic transactions: No charge for standing orders, card purchases and ATM withdrawals.
- Payments: Discounted access to a range of payment collection options from Clover.
- Account management: Manage online, over the phone, at a branch and via the app (mobile banking subject to eligibility).
- FSCS protection: Eligible deposits up to £120,000 are protected by the Financial Services Compensation Scheme (FSCS).
NerdWallet's Pros & Cons
Pros:
- No monthly fees.
- No fees for standard transactions.
- Up to £200 welcome bonus (T&Cs apply)
Cons:
- Customer service is not 24/7.
- 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.
Barclays Business Bank Account
NerdWallet's Review Summary
A Barclays Business Bank Account could be a good option for sole traders who prefer to bank in-branch with a trusted high street name. Free accounting and invoicing software, payment solutions, and sector-specific customer support are all among the features on offer. While there is usually a monthly fee, this is waived for the first 12 months, and simple electronic payments through the account are free. There’s the chance of a £400 welcome bonus too.
For more details, read NerdWallet’s Barclay’s Business Account review.
Barclays key features:
- Opening incentives: No monthly fee for first year and potential £400 sign-up bonus (T&Cs apply).
- Free basic transactions: No fees on direct debits, standing orders and Faster Payments.
- Credit facilities: Barclays offers a wide range of borrowing options, including loans, mortgages and overdrafts.
- FSCS Protection: Eligible deposits up to £120,000 are protected by the Financial Services Compensation Scheme (FSCS).
NerdWallet's Pros & Cons
Pros:
- Potential £400 welcome bonus.
- No fees on standard transactions.
- Free access to Freshbooks accounting software.
Cons:
- £8.50 monthly fee after first year.
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
Tide Business Account – Free
- 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 offers a range of business bank accounts, including a free account that could help make the life of any sole trader much easier. Almost all accounts are open within minutes, plus there’s free UK card transactions, various payment options, and accounting software integration. Up to £100 cashback is available when opening through NerdWallet too.
For more information, see NerdWallet’s Tide business account review.
Tide key features:
- Quick set-up: Most Tide business accounts are ready to use in a matter of minutes.
- Account extras: Including free Making Tax Digital tools, virtual debit card, and expense management features.
- Point of sale: Various point of sale (POS) tools, including card reading machines, payment links and the ability to accept contactless payments via your iPhone.
- FSCS protection: Eligible deposits of up to £120,000 are protected by the Financial Services Compensation Scheme.
NerdWallet's Pros & Cons
Pros:
- The free account has no monthly fees.
- Wide range of POS options.
- Highly-rated mobile app.
Cons:
- With Free account, many transactions have a fee.
- No branches.
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
What is a sole trader bank account?
A sole trader bank account is a business account for people who own and run their business as a self-employed individual. Sole trader accounts work similar to a current account you’re likely to have for your own finances, but include features designed to help you save time, effort and sometimes money in the everyday running of your business.
Many providers allow sole traders to open standard business bank accounts, but some also offer accounts specifically designed for sole traders. These may have additional tools aimed at helping if you’re going it alone, including accounting software and automatic invoice creation.
Do I need a business account as a sole trader?
There is no legal requirement to have a separate business bank account if you’re a sole trader. This raises the possibility of using your own personal bank account for your business finances if you wish and your provider allows.
That said, having a standalone business account is always worth considering. This is mainly because the separation of your personal and business finances, and the other tools and features available through these accounts, have the potential to make your life as a sole trader much easier.
» MORE: Do I need a business bank account?
Business owner insight
“I opened a business bank account early on – it instantly made me feel more professional. It helped me take my business more seriously, manage income and expenses clearly, and separate business activity from personal life. I’d absolutely recommend it to other sole traders for that reason alone.”
Cheryl Laidlaw, founder of Reyl Design Group
How could a sole trader account benefit you?
The main benefits of having a business bank account if you’re a sole trader include:
- Keep your finances separate: Having a clear distinction between your personal finances and your business finances will make it easier to keep on top of both.
- Simpler to monitor your business: You can see at a glance the exact financial state of your business, as all the payments received and made, and other income, outgoings and cashflow are in the one account.
- Saves time filing taxes: Bookkeeping and filing your taxes should be more straightforward as everything related to your business is in one place, separate from your personal finances. Accounting software is often included, or can be integrated, into accounts too.
- Helpful banking tools: Accounts often include access to payment, invoicing and payroll tools to help you with the day-to-day running of your business.
- Adds credibility: Having the name of your business on invoices and next to payments enhances credibility and looks professional to customers and suppliers.
- Designed for sole traders: The account features and support functions will have been included and designed with the needs of sole traders in mind.
- Options to borrow: It can be easier to access business loans and other credit options from a provider if you already hold a bank account with them. Business bank accounts with overdrafts are available too.
- Build your business’ credit: Having a business account should help build your business’s credit score, giving you a better chance of securing credit in the future.
Finding the right sole trader bank account with NerdWallet
The best sole trader account for you will depend largely on your business and your needs as its owner. For instance, if your business takes a lot of payments in cash, you’ll probably need an account where there are minimal or no charges for banking your daily takings. Equally, you may find some accounts don’t accept cash deposits at all. While there are a few things you need to think about, making sure an account, and its features and fee structure, suits you and your business is key.
What you need to consider
- Fees: Business accounts sometimes have monthly fees, along with transaction fees and other charges for features, such as overdrafts. Estimate how much different accounts are likely to cost you and look for special offers where monthly fees are waived or there’s a set amount of free transactions before charges apply.
- Features: Always check the features that an account offers, and make sure they’re what your business needs. For example, not all accounts offer international banking, so finding one that does will be important if you regularly trade abroad.
- Tools: Look for accounts offering tools that your business is likely to find useful, such as digital receipts, automated invoicing tracking or the ability to integrate accounting software.
- Customer support: Some business accounts are entirely managed by app, while others offer phone and perhaps face-to-face support in a branch. Make sure you’re comfortable with the customer service options available.
- Eligibility: Check if there are any eligibility requirements your business must meet in order to open an account. These could include things such as a minimum trading history or turnover.
» MORE: How to choose the right business bank account
Tim Leonard, Lead Writer and Business Expert at NerdWallet
What our Nerds say…
“Completing a self-assessment tax return can be daunting, particularly if you’re new to running a business. Simply having a business bank account can make filing your return easier, as it will keep your business finances separate. Choose an account with integrated accounting software and the task becomes even easier. ”
How to open a sole trader bank account
Opening a sole trader account through NerdWallet is simple.
- Compare the sole trader accounts above and select the one that best suits you and your business.
- Click the ‘See Deal’ button and you’ll be taken to your chosen provider.
- Apply directly with the provider – you don’t need to fill in any forms for us.
» TAKE ME TO: NerdWallet’s best sole trader accounts
What you’ll need
In order to open a business account most providers will need you to provide:
- Proof of your identity: your passport or driving licence
- Proof of your address: perhaps a recent bank statement, utility bill or council tax reminder
- Proof of your business’s address: also typically a utility bill or similar, but proving the trading address of your business (this could be the same as your home address if you run your venture from home)
- Contact details: both your own and for your business
- Business details: including the date you started trading, actual or forecasted turnover, and tax information
- Registration documents: your business tax return or self-assessment registration
Our other business bank account roundups
Sole trader bank account FAQs
You’re likely to be a sole trader if you’re self-employed and both run and own your business. This means you could also be a sole trader if you’re a freelancer or a contractor. Any profits from the business will usually be yours, though equally, you’re also responsible for any debts. You won’t be a sole trader if you’ve registered your business as a limited company, which creates a legal distinction between owners and their businesses.
You may be able to use your personal bank account for business purposes as a sole trader but you’d need to check with your account provider first. There’s no legal requirement to have a separate business account if you’re a sole trader, but it’s still worth considering as it will often make running a business easier.
The best sole trader bank account depends on your wants and needs, though providers such as Monzo, Virgin Money, The Co-operative Bank and Barclays all offer accounts that include features and tools that we believe are of benefit to sole traders.
While it is not essential that sole traders have a business account for Making Tax Digital (MTD), it’s likely to make it easier to meet the new reporting requirements and avoid mistakes. With effect from April 2026, MTD will require self-employed workers, including sole traders, with a total gross income above £50,000, to keep digital records and submit quarterly updates to HMRC using accounting software. The income threshold will drop to £30,000 in April 2027.
Monzo business accounts can be a good option for sole traders, thanks to useful features such as free UK bank transfers, different payment collection options, digital receipts and Making Tax Digital software. However, you should still weigh up other accounts in case there’s another option better suited to you.
» MORE: Monzo Business Account review
Yes, you can get a sole trader account with no monthly fees from providers such as Monzo, Virgin Money, Tide and The Co-operative Bank. Our roundup of free business bank accounts explains more about accounts which have no regular charges.
Opening a sole trader bank account could take anywhere from a few minutes to several days or maybe even weeks. Online business accounts tend to be quicker to open than accounts from traditional high-street banks.
You can withdraw funds from your business account for personal use, because as a sole trader, your own finances aren’t legally distinct from those of your business. If you do draw money in this way, it’s best to keep detailed records so you know what to declare when filing tax returns.
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