While there are many financial institutions out there offering business bank accounts, not all of them are the same. Each business account comes with its unique features, pros, and cons, so you need to research them before you finally sign up for your business account.
This article is a guide for business account for people looking to operate a business whose legal entity is separate from that of the owner or group of owners.
This guide compares some of the best UK business account providers, including;
Anna, Halifax, Barclays, CashPlus, Santander, Bank of Scotland, Revolut, Tide, Card One Banking, Nationwide, and HSBC.
How Do I Open A Business Bank Account?
The process varies from one bank to another but essentially they will fall into one of two categories. Old-school high-Street banks will generally require more information about you and your business upfront. However, some of these requirements can be reduced if you already have a personal account with them.
What Documents Do I Need to Open a Business Account?
While the requirements will vary from one bank to another, you’ll need proof of identities such as a passport, Driver’s License, a verifiable contact address from a utility bill, bank statement, and your business information as shown by your VAT number.
How Can I Open a Business Account?
You can open a business bank account with a high street bank, a building society or a digital bank. You can do so by visiting a physical branch or via an online platform depending on the type of bank and their level of technology.
Here is a detailed comparison based on a number of key features such as fees charged on withdrawal, ATM charges, safety, customer service, and international transfers among others.
Popular Business Banking Providers
Card One Banking
- Takes 3 hours to open an account
- No credit check so you can open an account even if you have bad credit
- Access to online, mobile and SMS platforms
- It supports direct credits with guaranteed security
- Ability to expert statements to a cloud accounting network
- Free text alerts every time you make a payment
- Admin access to allow for control of expenditure by employees
- You can receive up to 4 prepaid Corporate Mastercards
- Supports payments at Barclays Bank
As one of the oldest alternative accounts to high street banks, Card One offers one of the best business accounts in the UK market. The account.
As such, you may want to check out other banks if you have the only downside is that since Card One Banking is not a mainstream bank but instead an Authorized Payment Institution, your money is not protected under the FSCS regulations.
Nevertheless, it is a good option for people who are having trouble opening an account because of their bad credit. Additionally, only businesses with a turnover of not more than £2 million per annum can open and operate the plans to grow and become bigger.
As an Award-winning alternative to high street banks, Cashplus has some of the most attractive business account features. Here are some of the features and benefits of Cashplus’ business bank account that you may want to know:
- Instant online application and approval
- No credit checks are done when applying for the account
- Instant decision on whether you qualify to accept payments upon approval of the account
- No monthly charges except that customers pay an annual fee of £69eas
- Easy Mobile App and online 24/7 account and business finance management
- Ability to pay and withdraw cash at any UK Post OfficeFree business banking and Business Mastercard
- The account is synched with some of the leading acco
- ntancy software
Because of its quick payment system, free account maintenance combined with its integrated accounting software, Cashplus won Paybefore’s “top challenger bank 2017.”
There is no free cash transaction limit but customers can enjoy a £6 a month (Mixed Payments Plan) and £6.50 per month on all e-payments.
Customers can also access 12 months of free banking, meaning you do not have to pay for any charges within this period.
If you are a business with a turnover of up to £6.5 million, this account will be suited for you. Additionally, there are special conditions applying to businesses in given industries such as Agriculture.
Barclays Business Account
With a startup business, you expect to enjoy free banking for the first 12 months. What’s more, customers can access free expert advice from Barclays Business Direct team during the first few months as a support strategy aimed at helping customers grow their businesses.
Besides, you will also learn how to borrow and trade abroad. In most cases, you will be able to get your charges back depending on your yearly turnover and the period you have operated the account.
The fact that the account comes with a mixed payment plan that allows you to make and receive payments using both cheques, cash, and e-payments through debit cards and online banking platform mean clients enjoy convenient banking.
Like most banking institutions such as Barclays, HSBC allows you free banking, meaning you do not pay any fee or maintenance fees to run your account for the first 18 months of opening the account.
It is also free to switch from a different account to a business account thereafter you will be required to pay £6.50 a month for 12 months. However, your provider will review your account periodically to ascertain that you are running on the tariff regime that suits your specific needs.
Customers can deposit up to £3,000 a month for free thereafter you will need to pay 0.50 percent per £100 cash deposited above this limit. This account is suitable and available for people whose turnover is up to £2 million.
This account allows you to choose between the electronic banking tariff or the small business tariff depending on the manner in which you carry out your business banking.
- The bank offers a cash transaction limit of up to £3,000 per month, but an extra 0.50 percent charge for every £100 above the set limit.
- The account fee of £6.50 per month is charged for the first one year of opening the account
- 18 months of free banking period and one has 12 months to switch from one business to another
- Any business with a turnover of up to £2 million can open and operate a business account with HSBC
Santander offers a couple of options on their current account plans.
When opening a business current account, one needs to have been in business for 12 months and if you are a first-timer with Santander.
It comes with an unsecured pre-planned overdraft from as little as £500 up to £25,000.
However, one must have a good credit history and must not have filed or been rendered bankrupt or have had an IVA in the last six years. Additionally, you must not have been disqualified as a director of a business that went under within the last 6 years.
After the free banking period of 18 months, you will have to foot a cost of £7.50 a month and a free monthly cash deposit limit of £1,000 thereafter pay 70percent per £100 on excess deposits beyond your monthly limit.
What’s interesting is you are allowed to nominate trusted persons to have limited access to your account to help you manage your account expenditure. What’s more, you do not have a minimum or maximum opening deposit or minimum account balance to run the account.
Here is the summary of the features:
- Free deposits of £1,000 per month with 70percent per £100 above the limit
- After the free banking period, an account holder will have to pay an account maintenance fee of £7.50 a month
- 18 months free banking
- You can go for this if you have been trading for less than 12 months and if you are opening the account for the first time with Santander
Opening and running a business account when you have bad credit can be really difficult and complex. This is because most banks will need to perform credit checks at the time of opening the account which point they can reject your application if you do not have a good credit standing.
Fortunately, Cashplus understands that bad credit is not a permanent mark on your credit history, so they won’t focus on it when opening the account. All you need to do is provide accurate details which will be verified.
Bank of Scotland
Bank of Scotland is one of the banks in a conglomerate of Lloyds Banking Group. Started in 1695, they are the oldest banks to have been established in the UK.
As a bank that has lived through centuries, the Bank of Scotland has developed some of the most flexible banking account products that allow access via a range of platforms, including ATM, cards, mobile Apps, and Internet banking. The account comes with an integrated calculator to help you figure out the banking costs.
Additionally, they have a repository of online guidelines and report systems designed to support businesses under the auspices of Business Knowledge Box. This package has a series of topics, including financial planning, customer support, legal issues, and more.
Features and benefits of the Bank of Scotland’s business bank account include the following:
- Simple to understand pricing model
- All-free electronic payments
- Business support through mobile and online platforms
- Easy access to banking services via the internet, mobile, and SMS alerts
- 6 months free day-to-day banking
- Free switch within 7 days
- Dedicated switch team to help you move smoothly
- Does not have ATM cash withdrawals
- Access to Business Knowledge Box service that features advice
- A modest rating of 54% based on the 2019 Competition and Markets Authority service scorecard
- Easy UK payments and customers can transfer to over 23 countries
- Supports direct debits on both the UK account and the Euro IBAN account
- Free UK ATM withdrawals of up to £200 per month
- Free overseas ATM for withdrawals of up to £200 per month, a zero percent currency conversion charge on weekdays for an amountnot exceeding £1,000 per month (exclusive of THB and UAH).
- One free monthly international transfer plus discounts on some of the leading brands
- App-based current account with a range of features such as save spare change, real-time transactions, payment categorization, and buy cryptocurrency etc.
Absolutely No-Nonsense Admin, or simply known as ANNA, is a UK-based financial solution for all small business owners. This platform provides UK business owners with an integrated account that allows them to pay in and receive money easily, simply timely.
Established in 2018, ANNA Money now boasts of over 6,000 clients in UK alone. While this figure may appear too small, it should be noted that the firm is at its infancy yet commands a huge number of customers.
The account comes with tiers with the highest permitting a maximum business debit card balance of £700,000. Customers are also allowed to do inbound and outbound transactions of up to £500,000 per month.
It cheap, especially if your business has an income of more than £1 million or more. Since ANNA is not a bank, it is not FSCS regulated so you cannot have 100 percent safeguards for your money. Its top-notch customer support is perhaps its strongest point compared to most high street banks in the UK.
- Free trial of 3 months
- Low fees are charged
- Easy to understand interface
- Free transactions and ATM withdrawals
- No overdraft facilities
- Fees on foreign currency transactions
- ANNA Money is the best business current account for startups and freelancers
- Account opening and approval of a business account takes less than 10 minutes
- Mastercard debit card can be ready and available for use within five working days
- Multiple cards for more authorized employees in your company for easy and flexible spending
At the time of writing this guide, Halifax did not have a business banking account offered directly to its customers. Instead, it redirects prospective customers looking to open such an account to other reputable sites such as Bank of Scotland or its affiliates.
As an authorized institution by the Prudential Authority as well as regulated by the FCA, Nationwide Building Society is one of the safest ways to keep and utilize your business funds in the UK. It also boasts of being one of the highly accredited organizations with above bar scorecard ratings by the Competitions Authority.
As a tech-driven financial solutions provider, Nationwide has designed Mobile Apps and Internet banking solutions to allow for easy, fast, and convenient banking. With its free banking for the first 18 months, low maintenance fee, and unrivaled discounted fees, this is perhaps the account every average business can hope to own and operate.