How Does a Same-Day Business Bank Account Work?

Online business banks offer same-day accounts that allow you to start sending and receiving payments immediately. To set one up, you’ll need proof of ID, proof of address, and some business details.

Vivienne Egan Last updated on 07 April 2021.
How Does a Same-Day Business Bank Account Work?

With the arrival of new “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 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 will provide you with a sort code and account number within hours, or even minutes, of your application. This is especially useful for small businesses and sole traders who wish to separate their business income and expenses from their personal accounts, 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.

» MORE: What is the difference between commercial and business banking?

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 in your application:

  • Business address (bear in mind, if you’re setting up a new business while setting up your bank account, that you can use an accountant’s address or a virtual address).
  • Contact phone number and email address.
  • Companies House registration number (for limited companies and partnerships).
  • Estimated annual turnover.
  • Your credit score (you can also search for online banks that don’t require a credit score on NerdWallet’s business bank account comparison page).
  • Details for company directors and/or signatories to the account.

» MORE: All you need to know about business credit scores

How can online business banks process applications on the same day?

This speed is made possible by technology that can rapidly verify your identity and paperwork using artificial intelligence. The online nature of same-day business bank accounts means that there’s no cumbersome paperwork, photocopying of IDs or manual processing, no waiting for the post and no need for in-person meetings.

Challenger banks are instead responding to the fact that more and more people are setting up small businesses and, as with many aspects of modern life, want convenience, speed and flexibility – things that don’t always come guaranteed in traditional banking environments.

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. They are just set up to prioritise customer service and efficiency, investing in technology instead of physical locations in order to improve the customer experience.

Before you choose your same-day business bank account, compare the different features and fee structures each offers on the NerdWallet business bank account comparison page.

» MORE: Are challenger banks as safe as high street banks for businesses?

Image source: Getty Images

About the author:

Vivienne is a freelance business and finance writer, and the founder of Artists Make Money, a podcast and personal finance resource hub for people who work in the arts industry. Read more

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