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Since the arrival of challenger banks – online banks set up and run differently from traditional high street banks – it’s possible to apply for a business bank account online and be approved within minutes. No longer do you have to book in a face-to-face appointment and then wait several weeks for the post to arrive with your account details: it’s now possible to open a bank account almost instantly and start sending and receiving payments on the same day.
What is a same-day business bank account?
Same-day business bank accounts are accounts that can be opened almost immediately. Some business banking providers can approve your application and give you a sort code and account number within hours, or even minutes. This is especially useful for small businesses and sole traders who have perhaps recently taken on a contract or client and need to set up an account quickly so they can accept payments or buy supplies.
If you want to open an account quickly, some challenger banks offer business bank accounts in a matter of minutes. Traditional high street banks may take longer, though this depends on the provider and your personal circumstances.
» MORE: What is the difference between commercial and business banking?
Do online banks offer instant business bank accounts?
Challenger banks and other online providers can open your business bank account almost instantly, if you’re eligible and get approved. The online nature of same-day business bank accounts means that there’s no paperwork, photocopying of IDs or manual processing, no waiting for the post and no need for meeting bank staff in person. Instead, you may be able to apply online or on an app and get a decision the same day.
|Providers that may open a same day business bank account||Speed|
|ANNA Money||Can take three minutes to get a sort code and account number|
|Countingup||Can open an account in minutes|
|Mettle||Application can take around 10 minutes; account could be open within 72 hours|
|Starling||Can open an account same day for majority of customers|
|Tide||Can take under an hour to open an account|
Table correct as of 11 April 2023.
There is plenty to consider when opening an online business bank account, and as with choosing any type of financial product, it’s important to weigh up the pros and cons to see how it will suit you and your situation.
» MORE: A guide to online business bank accounts
Are same-day business bank accounts safe?
To some, speed might suggest a hurried or careless approach. However, online business banks offering same-day accounts are just as safe as traditional banks and have to meet all the same criteria and regulations.
All providers offering business accounts must be authorised and regulated by the Financial Conduct Authority (FCA). Banks are covered by the Financial Services Compensation Scheme (FSCS), which guarantees to protect up to £85,000 of your business’s money if your bank fails.
Other providers that offer e-money business accounts are not protected by FSCS, as they are not registered banks. However, they must also be registered with the FCA and have to follow strict safeguarding rules to protect customers’ money in case the firm fails.
What do I need to set up a business bank account online?
To open your new business bank account online, you’ll need the following:
- proof of ID (a passport or driving licence)
- proof of address
You might also need to include these in your application:
- business address (if you’re setting up a new business while setting up your bank account, then you can potentially use an accountant’s address, with their permission, or a virtual address)
- contact phone number and email address
- Companies House registration number, if applicable (for example, if you run a limited company)
- estimated annual turnover
- details for company directors and/or signatories to the account
Providers may also check your credit score as part of your application. If your business is new and doesn’t yet have a credit score of its own, or if you have poor credit, you may also want to look at business bank accounts without credit checks.
Image source: Getty Images
6 Benefits of a Business Bank Account
Is it worth having a separate business bank account? Limited companies and partnerships legally need to have a business account, but it’s optional for sole traders. However, there are many potential benefits to opening a business account, as listed below.
What You Need to Know About Business Bank Account Charges
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