A business bank account is a current account designed for businesses, including sole traders, limited companies, partnerships and not-for-profit organisations. We’ve picked our top business bank accounts based on our own research, as well as what business owners say are the most important criteria.
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Barclays Business Account. Services and support for your business
Free digital banking and no monthly account fee for your first 12 months for new customers, thereafter £8.50 (incl. VAT) applies. T&Cs apply. Other charges apply. You’ll also have access to a UK-based team of business managers to help you manage and grow your business.
Our Best Business Bank Accounts
We have evaluated and reviewed business bank accounts that NerdWallet has an affiliation with. Others are available. Find out how we use ‘best’ and 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 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.
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 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.
The Co-operative Bank Business Bank Account
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.
Barclays Business Account
NerdWallet's 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.
Allica Bank Business Rewards Account
NerdWallet's Review Summary
Allica Bank customers pay no monthly fee and can make basic UK transactions for no charge. However, cash and cheque deposits are not possible with Allica.
Allica does not offer business overdrafts, though borrowing options such as loans are available. In addition, accounts can be integrated with Xero and Sage accounting software.
Eligibility criteria: Applicants should be businesses that have been incorporated for a minimum of 12 months, and keep a balance of more than £50,000 in their account. In addition, businesses that have a loan product with Allica Bank may be eligible.
For more details, read NerdWallet’s Allica Bank Business Account review.
Allica Bank key features:
- Instant access savings pot: You can earn 4.33% AER on business savings, as well as depositing or withdrawing from these at any time.
- Cashback on eligible purchases: Earn 1% cashback on eligible monthly debit card aggregate purchases up to £10,000, and 1.5% on monthly aggregate purchases above £10,000. Aggregate purchases are when all the smaller sums you’ve spent are added together.
- FSCS protection: Eligible deposits up to £85,000 are protected by the Financial Services Compensation Scheme (FSCS).
NerdWallet's Pros & Cons
Pros:
- Free basic UK transactions
- No monthly fees
- Local relationship managers in England and Scotland
- Access an instant access savings pot with 4.33% AER
- 1% cashback (and 1.5% once you spend £10,000 a month) on eligible purchases
Cons:
- No cash or cheque deposits
- No phone or branch banking
- Set-up time of between three and five days
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
Tide Business Account – Free
Free
Free
20p
- For registered business account: you must be registered with UK Companies House as a director of that company or partnership
- For sole trader account: you must be a UK based sole trader/freelancer
- For all accounts: you must be aged 18+, have a valid UK phone number and address, and hold 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
- More than half of new business accounts open within 10 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.
NatWest Start Up Business Account
- 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
- 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.
Zempler Bank Business Go Account
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 international payments
- 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.
SumUp Business Account
Free
Free
Free
n/a
- Free account available to businesses transacting less than £10K per month. Bespoke fees and premium support available if over £10k is transacted per month
- Must have a valid form of ID, such as a passport or driving license
- Must be able to provide a utility bill or bank statement as a means of verifying your address
NerdWallet's Review Summary
SumUp’s business account has no monthly fee and includes free basic UK transactions, such as transfers, direct debits and Faster Payments. Cash and cheque deposits are not possible with a SumUp account. In addition, no overdraft is available from SumUp.
However, you can link your account with accounting software providers including FreeAgent, Xero and QuickBooks.
Eligibility criteria: Freelancers, sole traders, limited companies, partnerships and charities can open a SumUp account. However, applicants must be at least 18 years old.
For more details, check out NerdWallet’s SumUp Business Account Review.
SumUp key features:
- Not protected: SumUp’s business account is an emoney account and does not include protection from the Financial Services Compensation Scheme (FSCS).
- Point of sale: SumUp provides point of sale (POS) technology, allowing you to take payments via a terminal and have the money in your account in just one day.
- Business tools: Invoice management and online store creation tools are available through the SumUp app.
NerdWallet's Pros & Cons
Pros:
- No maintenance fees
- No fees for direct debits and Faster Payments
- Open an account in minutes online
Cons:
- No cheque or cash deposits
- No overdraft available
- No branches
- Not FSCS protected
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
Lloyds Bank Small Businesses and Start-ups Account
- To qualify for this account you need to be a sole trader, partner or company director and be aged 18 or over
- You must have a turnover of less than £25m
- Must not already have a Lloyds Bank business account for this business
Review Summary
Lloyds Bank’s business account for start ups and small businesses costs £8.50 per month following a 12-month introductory period with no monthly fee. You can make 100 outbound electronic payments for free each month, though they cost 20p each if this allowance is exhausted.
Cash deposits cost 85p per £100 via Immediate Deposit Machines or £1.50 per £100 via the counter. For cheques, the cost is 85p by machine and £1 each over the counter.
Lloyds Bank can offer business overdrafts in excess of £25,000 to some customers, with a representative EAR of 16.19% applying to arranged overdrafts up to £25,000. In addition, a £12 monthly usage fee applies to overdrafts between £500 and £5,000, while a 1.99% fee (£150 minimum) applies to those between £5,001 and £25,000.
Finally, accounting software from providers, including Sage, can be integrated with your account. The bank also offers its own free accounting software.
Eligibility criteria: You must be at least 18 to apply. This account is for sole traders, limited companies and partnerships with annual turnover of less than £25 million. New applicants should not already hold another Lloyds business account.
For more information, check out NerdWallet’s Lloyds Bank Business Account Review.
Lloyds Bank key features:
- Free accounting software: Lloyds offers Business Finance Assistant, the bank’s own free accounting software for account holders.
- FSCS protection: Eligible deposits of up to £85,000 are protected by the Financial Services Compensation Scheme.
- One-stop shop: As well as business banking, Lloyds Bank offers lending, insurance, international services and even point-of-sale (POS) technology.
- Partner discounts: Lloyds Bank offers discounted access to antivirus software from Norton.
NerdWallet's Pros & Cons
Pros:
- With more than 500 branches, Lloyds probably has a location near you
- Free accounting software
- An expansive offering that encompasses lending, insurance and POS
Cons:
- Monthly fee of £8.50
- Basic transactions cost 20p after monthly limit
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
Bank of Scotland Small Business Bank Account
- Must be a sole trader or director of the business, and be aged 18 or over
- Must have an annual turnover of less than £25m
- Must not already have a Bank of Scotland business account for this business
- If you have a limited company it must have been registered with Companies House for at least four days
Review Summary
Bank of Scotland’s business account costs £8.50 per month following a fee-free introductory period of 12 months. The first 100 electronic transactions each month are free, with a charge of 20p applied to each subsequent transaction.
Cash deposits cost 85p per £100 via deposit machine or £1.50 per £100 over the counter, while cheque deposits are 85p each via machine or £1 a pop via the counter.
Bank of Scotland’s business overdraft can stretch from £500 to north of £25,000. Representative EAR stands at 16.19% for overdrafts of up to £25,000. Overdrafts of £5,000 or below cost £12 per month, while those between £5,001 and £25,000 are subject to a £1.99% annual fee (£150 minimum).
Like Lloyds, Bank of Scotland offers its own free accounting software for customers.
Eligibility criteria: Applicants must be 18 years old. Accounts are for sole traders, partnerships and limited companies with annual turnover below £25 million. Applicants should not already have a Bank of Scotland business account.
For more information, read NerdWallet’s Bank of Scotland Business Account Review.
Bank of Scotland key features:
- Accounting software: Bank of Scotland offers free accounting software to all business banking customers.
- FSCS protected: Deposits of up to £85,000 with Bank of Scotland are protected by the Financial Services Compensation Scheme.
- Financial products: Bank of Scotland also offers business loans, business insurance and access to POS technology.
NerdWallet's Pros & Cons
Pros:
- Free accounting software
- Business loans, insurance, credit cards and more all available in one place
Cons:
- Monthly fee of £8.50
- Charges for electronic transactions outside monthly limit
- Branches are primarily in Scotland
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
ANNA Money – Pay As You Go
Review Summary
A Pay As You Go account from ANNA Money does not carry a monthly fee, but you will need to pay 0.95% commission on all incoming payments. Outgoing transactions are free and unlimited. You can deposit cash into your account for a 1% fee and you cannot deposit more than £1,000 per day or £10,000 per month. Cheque deposits are not possible with ANNA Money accounts.
There is no conventional overdraft on offer from ANNA, but its ANNA Credit product serves a similar purpose. Customers can access a pot of up to £10,000 and pay 3% per month interest on any funds they draw down from this pot.
Accounting software from Xero and QuickBooks can be integrated with ANNA Money business accounts.
Eligibility criteria: Those applying for an ANNA Money account should be sole traders, freelancers, limited companies and limited liability partnerships.
To learn more, read NerdWallet’s ANNA Business Account Review.
ANNA Money key features:
- Quick account opening: According to ANNA Money, you can open a new account in just minutes.
- Cashback capabilities: With ANNA Money, you can earn cashback of up to 40% on eligible business purchases.
- Tackle taxes: Get a one-month trial of ANNA Money’s ANNA +Taxes product, which helps to simplify issues such as payroll and VAT.
- Not FSCS Protected: As ANNA Money is an e-money institution, your money will not be protected by the FSCS scheme.
NerdWallet's Pros & Cons
Pros:
- No monthly fee
- New accounts take just minutes to open
- Account holders can earn up to 40% cashback on eligible purchases
Cons:
- No cheque deposits
- ANNA Money has no branches
- Commission on inbound transactions
- Deposits not FSCS-protected
This product may be one of a range offered by this provider. Always check terms & conditions for suitability before applying.
Revolut Basic Business Account
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.
The pros and cons featured here are chosen by us based on a combination of our expert, research-based opinions and an exclusive survey of UK business owners and decision makers. The survey was conducted on behalf of NerdWallet UK in December 2022 to identify the business bank account features that people feel are most important. This was subsequently reinforced by an additional survey in 2024. They are unlikely to be the only product features and restrictions that you should consider. Pros and cons are subjective and you should align them to your own personal and business circumstances. Information was correct at the time of publication but may have changed since.
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:
- free business bank accounts
- online-only business bank accounts
- joint business bank accounts
- sole trader bank accounts
- start-up business bank accounts
Choosing a business bank account
Different factors are important to different customers. NerdWallet’s 2024 business banking survey found that business owners most commonly looked for an account with no monthly fee (chosen by 43% of respondents) and free basic UK transactions (selected by 34%). However, you may look for other factors when making your decision.
Then compare your business bank account options, taking the following factors into account.
- Fees: Business accounts charge a variety of different fees, which you should consider carefully as different pricing structures fit different businesses.
- FSCS protection: The Financial Services Compensation Scheme (FSCS) protects eligible deposits in bank accounts up to £85,000 if your provider goes bust.
- Set-up time: Some providers can set up business accounts on the same day you apply, while others can take several days.
- Minimum balance requirements: Some providers may require you to keep your balance above a certain threshold to waive the account’s monthly fee.
- Cash and cheque deposits: Not all providers allow you to deposit cash or cheques, while others may charge a fee.
- International payments: Not all providers support cross-border payments, while others use a partner. Many that do allow payments abroad charge fees.
- Ways to bank: Check for branch banking, telephone banking, online banking or a mobile app, depending on how you want to access your account.
- Accounting software: Many business accounts offer integration or free trials with accounting software providers.
- Borrowing options: If you are also looking for a loan for your business, you might want to use the same provider for your business bank 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
- Bonus features: Many business bank accounts include extra features such as accounting software, invoicing tools and tax pots.
- Tailor-made: Business accounts are specifically designed for professional use, which means customer support and features are more likely to be helpful for a business owner.
- Professional: A business account will make your venture look more professional.
- Build credit: Building your business credit score could help you to secure financing and investment.
- Easier tax: Working out your taxes is easier with a business bank account, thanks to special features and separation from your personal account.
Disadvantages of a business bank account
- Fees: Though free accounts are available, business bank accounts are more likely to charge fees than personal accounts.
- More admin: Juggling a business and personal account could increase the admin you need to do.
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
Business Bank Account Methodology
NerdWallet evaluated and reviewed 23 business bank accounts from high street and digital-only banks. Collectively, these accounts represent the largest banks by assets and internet search traffic, along with notable or emerging players in the industry.
We considered more than 10 data points for each account, based on the criteria that matter most to users, scoring them on fees, accessibility and customer service, among other factors. This information was gathered from each financial institution’s website and company representatives. In addition, data is collected regularly and reviewed by our editorial team for consistency and accuracy.
Using the same data across all products and features we were able to create star ratings presented on a scale of one to five stars, where a one-star score represents ‘poor’ and a five-star score represents ‘excellent’.
Best business bank account FAQs
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.
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.
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.
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.
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.
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.
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.
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.
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.
Review methodology
At NerdWallet UK, we base our reviews and our ‘Best’ pages on the results of surveys we undertook about what was important to people who use these products. This allows us to look at products impartially of any commercial arrangements we have and fairly rate the products on the same set of criteria.
Best means our ‘Best’ and is based only on what products we have aligned to our surveys, which form the basis of our reviews and ratings. This means that there will be other products on the market that we have not included in our ‘Best’ pages. Best does not mean it’s best for you, nor does it mean the ‘cheapest’.
Our reviews may display lenders’ rates. This additional information has not been included in our evaluations but is still very important when choosing a product. Rates offered can depend on circumstances, amount and term. Always check details before proceeding with any financial product.
Product details reflect the information that was available at that time but may have changed since. We strive to give you a review on as many products as possible, but there will be products not included on the market. The review is our opinion, but it does not constitute advice, recommendation or suitability for your financial circumstances.
While we try to provide you with accurate information, the providers can change the terms of their products at any time, therefore it is advisable to check the terms before you proceed.
You can view our full review methodology here.
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