(2023) Compare the best 15 business bank accounts for small businesses UK.

 

Whether you own a company or run an organization, you need a business bank account to carry out everyday transactions and keep track of other functions. From purchasing goods and merchandise from suppliers to paying for services, a business account lets you manage business expenses efficiently. A dedicated business account is mandatory to keep business affairs organized.

Choosing the right business account, however, can be a daunting minefield to navigate. You need to consider the best features and perks, fee options, and overdraft charges to get maximum benefits from a bank account. And that is why doing firsthand research is of paramount importance before picking a business bank account.

As competition in the business account sector is increasing, you need to choose a bank account that is more productive and offers you the services your company needs to excel. The article, in this regard, includes the essential features of fifteen best UK business bank accounts to help you compare and choose one that meets your business needs.

But before you put together this checklist to evaluate each bank account individually, let’s briefly overview some basic knowledge of business bank accounts.

What is a Business Bank Account?

A business bank account is primarily a separate account that is aimed at both established businesses and startups. It keeps your business transactions separate from personal expenses and allows your business to send or receive payments.

A business bank account shows that you are not doing business as a hobby. Also, it gives a professional perspective to your suppliers and customers.

While banks often charge their business customers an annual and monthly fee, some banks offer a free-period for at least two years for startups or new clients.

Criteria for Choosing the Best Business Bank Account

As mentioned above, a business account is one of the ways you can keep track or monitor the finances of your company. The business accounts differ mostly depending on the banking services your company needs. Business accounts from different banks have varying features.

This is when you need to see which features suit your company operations and meets its current and future requirements.

Take a look at the given features you must take into account when picking a business bank account for your company.

• An Overdraft: To let you borrow cash through a business account
• Post Office Banking Services: To help you pay cash conveniently into account in the nearest post office
• Interest: To earn a positive balance in the business account
• Debit Cards: To help you and your staff spend money online or in-person
• Cost of a Business Account: The monthly and yearly charges for the business account. Many banks could have a banking fee when you
  • Use overdraft
  • Receive payments through cards
  • Write cheque
  • Withdraw cash
• Pay Cash In: Send money through bank transfer

Benefits of Business Bank Account

While using your personal account for the basic business transaction is the cheapest option you may have, a business bank account is distinct and more comfortable to organize business expenses. Successful and established businesses use their bank accounts for not only tax purposes but also for working out their tax-deductible expenses.

Moreover, making cash-in cheque to business and building up credit history is much easier with a business bank account. It helps you apply for business loans and credit cards. Banks usually offer extra support to their business customers, such as online tools and local relationship managers, to help manage invoicing and accounting.

Thus, from providing a logical audit trail to accurate bookkeeping, a business bank account can offer you plenty of benefits.

Top Business Bank Accounts in the UK

1.    Lloyds Bank

Lloyds bank is associated with Lloyd Banking Group – the most extensive banking system in the UK. The banking system further includes Bank of Halifax, Scottish Widows, and Scotland.

Established in 1756, the Lloyd banking system builds its business accounts based on the annual turnover of a company. The bank offers tailored services for businesses of all sizes. In general, Lloyd bank does business grouping if a company has a turnover between £3 million and £25 million.

As business bank accounts are flexible and support business growth, they make a suitable option for startups. You can also choose it if you run an established business to make the most of its banking proposition.

Features and Benefits     

• Simple pricing methods
• No charges on cash machine withdraw
• No charges on electronic payments
• No charges on Debit Card payments
• Provides banking support from business management professionals
• Free day-to-day banking service for startups for 18 months
• Offers access to several digital and financial tools
• Smart mobile banking apps
• Online cost calculators
• Updated tools and guides to help you run business
• Scored 61 percent for service quality according to Competition and market authority’s report

2.    Barclays

Barclays is another popular banking system in the UK, offering two different pricing plans for customers. These plans include a simple payment plan and a mixed payments plan. The mixed payment plan typically benefits companies dealing with cheques, cash, and other methods for the transactions.

Simple payment plans, on the other hand, facilitate businesses that make electronic transactions, predominantly via debit cards and online banking. The bank has a comprehensive rewarding system for loyal customers. The customers get a proportion of their monthly fee back. The bank calculates this on the basis of yearly credit turn over and length of banking period with the customers.

Features and Benefits

• Automated business banking feeds
• Two years of free business banking service
• One of the top-rated mobile services and online banking for SMEs
• No charges on making electronic payments
• Has two comprehensive pricing plans
• Offers loyalty rewards to the customer by returning a proportion of account fee
• Provides particular banking criteria for social housing and agriculture sectors
• a suitable business account for the companies with a yearly turnover of £6.5 million
• has a price plan guarantee service to review if you are using the best plan
• Offers plenty of supporting services to businesses such as cash flow finances and loans
• Has a separate service to handle the complaint

3.    HSBC

HSBC is one of the biggest financial companies in the UK. It is one of the key players in the banking sector around the globe. With a strong heritage and reach, the banking company offers a wide range of general and current business financing services for its customers.

Features and Benefits

• Offers free introductory banking for 12 months (new customers can extend it to 18 months)
• Two business current bank accounts – Electronic banking tariff and electronic banking tariff
• Best Tariff for the companies with an annual turnover of £2 million
• Easy borrowing and finance options
• Services at post offices are available along with a massive network of banks
• Business specialists in all the branches in the UK
• Customers can do banking through telephone, mobile, post offices, and internet
• Offers foreign trading expertise to businesses looking for oversea expansion

4.    Santander

One of the largest commercial banks and UK retail, Santander is owned subsidiary of a global bank called Banco Santander. What distinguishes Santander’s business bank account from the rest is its simple banking structure. It allows customers to pay monthly fees from £7.50 to £40 with a deposit limit of £10,000.

Although some limits can be applied, most of the transactions, including withdrawal payments, cheques, and BACs, have no charges. The bank does not apply any non-standard transactions like foreign currency transactions and CHAPS payments at additional banking charges.

Features and Benefits 

• Simple and easy fee structure with fixed monthly charges and usage limits
• Allows banking at Post offices
• 10% monthly charges on credit balance
• Contactless payments
• Seamless mobile and online banking
• Offers access to arranged overdrafts
• Online account calculator for the companies to assess account costs

5.    NatWest

NatWest is a part of a business group -RBS and was established in 1970. The large group of networks serves customers across the country and excels in business sectors like technology and manufacturing. If your business has been trading in the mainstream for at least 12 months and has a yearly turnover of £2 million, NatWest’s business bank account can offer many benefits. The banking system has a separate business bank account for newly established companies.

Features and Benefits

• Access to several services and advantages such as business boost and FreeAgent
• 24/7 phone and online banking
• Has several business development enablers
• A central service hub to manage loans, accounts, and credit cards
• Relationship managers for business customers
• The transaction fee applies only on £5 per month

6.     Tide

Speedy setup and easy-to-access banking applications are two defining features of Tide. The business bank accounts of Tide have straightforward pricing and charge no fees for card usage and maintenance. However, the bank does charge customers when they transfer from a non-Tide account to a Tide business account, cash deposits, and withdrawals.

Features and Benefits

• No annual and monthly fees
• No transferring charges on Tide customers
• Instant Credits
• Fast business bank account setups
• Caters to growing business needs
• Offers interactive banking with impeccable accounting software
• Free credit card usage for regular and international clients
• Customers can pay their invoices through a banking app

7.     Revolut

If your business deals in multiple currencies, the Revolut business bank account is an ideal option for you. With its primary focus on international payments, the business bank account does not charge any exchange fee. Customers have an opportunity to receive, hold, and exchange 24 currencies without having to pay additional charges. Plus, customers can spend in 150 currencies by paying the rates of interbank exchange.

However, the bank does not accept cheque deposits or cash and makes the right option for online businesses.

Features and Benefits

• Offers prepaid business cards
• Enables customers to receive, hold, and exchange 24 different currencies without any bank charges
• Offers 14 days of free business banking
• Multicurrency banking cards
• Instant cash transfers
• Virtual cards to manage payments for platforms like Google, Amazon, and Face book ads
• Free for the first 14 days
• Offers immediate priority support with a dedicated team

8.    Cashplus

A Paybefore winner, Cashplus is one of the best banking accounts that offer swift payments, has expense cards, and integrated account software without any monthly maintenance charges. The business bank account makes a flexible and viable alternative to high street bank accounts and caters to startups and small business setups.

Features and Benefits

• Has no monthly charges (yearly fee of £69)
• Includes business MasterCard
• Does not have a credit check to apply
• Accepts pay-ins at any Post Office in the UK
• Accept payments directly after approval
• integrated with an accountancy package

9.    Yorkshire Bank

Yorkshire Banking System was founded in 1859 in West Yorkshire. The Clydesdale bank uses it as a trading name and offers a strong banking experience with its extensive network of branches in the UK.

The business bank account of Yorkshire bank is for everyday business and essential management, offering mandatory services business requirements. The business bank account also offers an agreed overdraft (optional). Precisely, there are two types of business bank accounts with different offerings.

A business current account is for new customers and startups with free day-to-day banking for two years. The business choice account, however, is comparatively more flexible and features low credit interest as per Bank of England base rates.

Features and Benefits

• Offers agreed to overdrafts
• Has two business accounts
• Free day-to-day banking for startups for two years
• Provides business banking support
• Impeccable online banking service
• Switching services via the Current Account Switch Service

10.  Starling Bank

Unlike other app-based banks, Starling Bank is a leading alternative in the UK that offers clients FSCS deposit protection. That means if the bank becomes insolvent, the UK government will compensate the lost funds by paying £85,000. Since it is a new banking system, it ensures to provide the best services to the clients by linking a business bank account with an efficient bookkeeping -style spp.

Besides this, there is no monthly fee for the Starling app and no electronic transaction fee for direct debits, faster payments, and other standing orders.

Features and Benefits

• No monthly charges for startups and small businesses
• Manage business cash-flow and payments in real-time
• Deposit cash over 11,500 Post offices nationwide
• Offers FSCS protection to all deposits ( up to £80,000)
• Categorized transactions
• 24/7 customer service
• Allows you to share transactions with accounting software
• 100 percent mobile signup within 10 minute

11.  TSB

TSB is a part of the Lloyds Banking Group and has a long working history in the UK’s banking sector. The business bank account of TSB has a fixed banking period and offers customers to choose the banking tariff they want to switch to.

This fixed fee account has several tiered levels that have fixed allowance for transactions. Each type of transaction has a different predetermined monthly fee. A business account with an extra Tariff does not charge any monthly payment, but you need to pay for your transactions. Automated banking transactions have per transaction charges but do not have a monthly fee.

Features and Benefits

• Has a switching team to help clients switch to TSB business account
• Free everyday banking for two years for new customers
• Gives a tariff choice to customers after a free period
• 500 high street bank branches
• Access to swift payments
• Offer plenty of complimentary services in branch or by phone
• Online account management

12.  Clydesdale Bank

Clydesdale bank dates back to the 18th century and has been supporting Scottish communities. The banking system offers the longest day-to-day free banking period in the market for startups with two-year availability. The bank moves its clients to banking tariffs after the free banking period. The bank accounts help businesses with their everyday bank activities and basic management.

Moreover, the current business account offers an agreed overdraft option to the businesses. This is what makes such a business account suitable for client money management and professional firms. Plus, Clydesdale bank offers business accounts to tailor to different business supporting tools such as business guides, online training, and health care.

Features and Benefits

• Day to day banking for two years for new businesses
• Offers plenty of financial management options
• Access to banking tools and facilities
• Many payment options
• Easy switching services
• International services
• Special tools and guidance
• Optional overdraft

13.  ANNA

Absolutely No-Nonsense Admin- ANNA is a mobile business account you can access primarily through an app. However, it is worth mentioning that ANNA is not a bank but an admin assistant and business account. If you do not want in-branch services, ANNA makes an excellent alternative to various high-street banks.

Features and Benefits

• Offers monthly plans starting from £11
• Personalized reports
• Outstanding payments and smart invoicing
• Secure transactions that provide real-time updates
• 24/7 customer support
• Offers three months free subscription
• No transaction charges on ATM withdrawals
• Allows you to use ANNA MasterCard in application
• Same-day set up of apps

14.  Metro Bank

Although Metro bank is not one of the well-established banks of the UK, it offers a wide range of different services to cater to modern-day business. The business accounts of Metro bank have no monthly fee and also provide more than 40 free transactions if your account has a minimum amount of £5,000. Moreover, to become a Metro bank account holder, you must have a yearly turnover of £2 million. Plus, you must have UK-based shareholders and business directors. The flexible banking and online services help you handle business banking.

Features and Benefits

• 24/7 customer service
• 50 free monthly transactions on £5,000 account balance
• Clear charges
• Mobile apps and online banking
• Business managers to provide support
• Bank waives the monthly account fee if your balance stays £5,000 for the whole month

15.  Co-operative Bank

This ethical bank has some customer-led policies that govern how the bank helps clients run the business, along with who can become the clients. If you have any bankruptcy charges, CCJs, or missing payment records in the last six years, you cannot become an account holder.

Cooperative business bank accounts cater to startups and small businesses, cash tariff account, community accounts, and customer offers.

Features and Benefits

• Has 30 months free of charge banking period for new account holders
• The current account tariff does not have transaction limits
• Allows access via postal banking, telephone, and internet
• Banking services via Post services
• Ethical banking
• Different bank accounts catering to different banking needs
• Easy switch with account guarantee
• Has lowest deposit charges for account cash tariff

Comparison Table

 

Conclusion

Overall, the given features and benefits will help you understand the business bank account structure in the UK banks.