How to Switch to a Better Business Bank Account

Switch accounts to lower fees, for different features or better customer support
Use the Current Account Switch Service and your new bank arranges everything
Your balance and payments automatically switch within seven working days

Changing business accounts is a task that often sits on a to-do list for quite some time. But with fees and features differing between accounts, there can be good reasons for making a move. Read on to learn more about how easy switching business bank accounts can be and why transferring can be worth considering.

What are the benefits of switching business bank accounts?

There are various reasons why you may want to switch to a different business account, including:

Introductory offers: Many accounts offer incentives for opening, such as no monthly or transaction fees for a year, or cashback on spending. While potentially beneficial, such perks should always be considered alongside wider account fees and features.

Lower fees: The charges on a business bank account can rise over time or when an introductory offer ends. Keep an eye on what you’re paying and check to see if other accounts might work out cheaper.

Better features: Some business accounts offer more than others. If you want access to invoicing, payment and accounting tools and features that aren’t offered by your current account, you may want to look elsewhere.

Outgrowing your account: As your business grows and evolves, you may find your account struggles to meet your needs, particularly if it was aimed at startups. For example, a different account may be needed if you regularly exceed transaction limits or are now trading abroad.

Customer support: It may be time to move accounts if your existing provider lets you down or doesn’t offer the type or level of support you prefer or need. This could include if you regularly bank cash and a local branch has shut down.

Business owner insight

“We are in the process of switching our business account, mainly because we wanted to find somewhere that offered us a lending facility or an overdraft – even if we don’t need it, we wanted to have that option.”

Matt Palfrey, Director, Comfa

How do you switch business bank accounts?

The easiest way for smaller businesses to switch bank accounts is by using the Current Account Switch Service. This is because using the service puts responsibility for transferring your balance and the payments coming in and out of your account onto your new provider.

To use the service, which is free, your business must have fewer than 50 employees and turnover less than £6.5 million per year. The providers of your old and new accounts must both be signed up to the service as well – though conveniently, around 99% of UK banks and building societies are.

1. Choose your new account

The first and most important thing you need to do when switching business accounts is to find a new account. Fees are an obvious consideration, but make sure to choose an account that suits your business’s circumstances and offers the features that you want and need. Think about your priorities and how your business works. Consider everything in the round and try to find an account that ticks as many boxes as possible.

» COMPARE: Our best business bank accounts

2. Get prepared

Readying paperwork and doing some quick checks will help ensure your switch goes smoothly.

Your new provider will confirm exactly what it wants to see, but generally you’ll need to provide proof of your identity, proof of your and business’s address, and various other details about your business and the current bank account you’re switching away from. Any partners or directors in the business will need to provide details about themselves too.

The documents it’s best to have ready include:

Your passport or driving licence (and those of business partners/directors)
Recent business bank account statements
Utility bills related to your business
Tax return or self assessment if you’re a sole trader
Certificate of incorporation if you have a limited company

Make sure you keep copies of bank statements for yourself. This is so you can check everything has switched over as it should, and just in case you need to refer back to past transactions once your old account is closed. Also take the chance to check the different Direct Debits and standing orders on your account, and cancel any you don’t need.

3. Apply for your new account

When you apply for your new business account is when you must ask your new provider to transfer your old account using the Current Account Switch Service. Your new provider will supply you with a Current Account Switch Agreement form which you must sign to get the process underway.

You choose the switch date, but must allow seven working days for the move to happen – also avoid weekends and Bank Holidays. In the meantime, your old account will still be live and can be used until the date you’ve chosen to switch.

Under the Current Account Switch Guarantee, your new bank will ensure that:

all regular inbound and outbound payments to your old account, including Direct Debits and standing orders, are transferred
your old account’s balance is moved to the new account
payments into the old account after your switch date will be rerouted to the new account
anyone attempting to send money to your old account will receive your new details
any interest or charges incurred as a result of something going wrong during the switch will be refunded by your new bank.

» MORE: How to open a business account

How long does it take to switch business accounts?

Switches made using the Current Account Switch Service should be completed within seven working days.

However, bear in mind that you also need to open a new business bank account before the switch can begin. This means the entire process depends heavily on how long it takes to open your new account. While some online business accounts can be opened in a matter of minutes, others could take days or even weeks to open.

Do I have to close my old business account?

Your old provider will automatically close your old account if you switch using the Current Account Switch Service. That way, any payments mistakenly paid into your previous account should be redirected over to your new account.

If you wish to switch and keep your old account open, you can’t use the Current Account Switch Service. Instead, you would need to request either a partial or a manual switch.

Business account switching insight

Almost three quarters (73%) of small and medium business owners in the UK would be open to switching if a more suitable business bank account was available, according to research by the Current Account Switch Service.

How does a partial account switch work?

Some providers offer a ‘partial switch’ option, where only some of your payments are transferred to your new account and your old account isn’t closed automatically. This may be useful if there’s a feature on your previous account that you want to carry on using.

However, unlike a full switch, you will need to arrange for any regular incoming payments to be redirected to your new account. Also, new payments to or from your old account won’t be automatically redirected. This is because partial switches can’t be carried out using the Current Account Switch Service, and won’t benefit from any of the service’s guarantees.

Can I manually switch my business bank account?

A manual account switch may be an option if an account provider isn’t part of the Current Account Switch Service.

As you might expect, manual switches are likely to take up more of your time as the account holder and be more complicated. You also won’t be covered by the Current Account Switch Service Guarantee, meaning there are no assurances over payments, transfers and switch times.

Find a business account to switch to

If you’re using the Current Account Switch Service, and there are any problems or delays, your new provider is responsible for sorting everything out. You will also be compensated for any charges or loss of interest resulting from the issues. However, if you’re making a partial or manual switch, and not using the service, you won’t be covered by these guarantees.

Some providers allow switches which include overdrafts but some may not. Check with your new account provider before you apply.

Yes, joint business accounts can be switched, but only if all parties named on the account give permission for the move and agree on the choice of new account.

Image source: Getty Images

Dive even deeper