The best sole trader bank accounts

The best sole trader bank accounts

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What is a sole trader bank account?

A sole trader business bank account is specifically designed for self-employed individuals. It allows you to manage your finances in one place and makes it easier to keep track of your income and expenses.

Where most high-street banks offer a business account for their personal customers, there are more and more specialist banks opening – such as Tide, ANNA and Mettle – that are geared exclusively towards company owners. Sole trader business accounts operate in a similar way to regular current accounts, including debit and business credit card use, online, app and telephone banking and business overdraft options.

There are some differences, though. Sole trader bank accounts tend to have significantly lower interest rates but higher fees, with the latter including charges for paying in cash and

Are sole traders required to have a business bank account?

There’s no legal requirement to have a business bank account, but it's advisable. It makes managing your finances easier because it separates your business and personal expenses. Opening a business bank account can also make it easier for lenders to make a decision should you wish to borrow money.

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1. Tide Business Banking

  • account fee: free
  • customer support: 24/7
  • UK transfer fees: 20p
  • business turnover: any

Tide offers some extra features for sole traders. This includes a business banking app, which also creates and sends invoices (with third-party integration). However, Tide has a 20p UK transfer fee. Additionally, Tide is an iwoca partner, meaning that you can apply for an iwoca loan directly from their app.

2. Starling Bank Business Account

  • account fee: free
  • customer support: 24/7
  • UK transfer fees: free
  • business turnover: any

Starling offers business banking for companies of all shapes and sizes, with free transfers and no limit on business turnover.

3. Natwest Mettle Mobile Account

  • account fee: free
  • customer support: 24/7
  • UK transfer fees: free
  • business turnover: up to £50,000

With Natwest Mettle mobile account there’s a limit of £50,000 turnover, but most services are free.

4. HSBC Kinetic Banking Account

  • account fee: free for 12 months (then £6.50 per month)
  • customer support: 24/7
  • UK transfer fees: free
  • business turnover: up to £2 million

HSBC Kinetic banking account is an option for sole traders with a larger turnover and who mainly manage their business online. The account offers free transactions but carries a cost of £6.50 per month after the free 12-month period. There’s a 0.60% charge for cash withdrawals, plus charges for in-branch transactions (including Post Office transactions).

5. Santander Business Current Account

  • account fee: free for 18 months (then £7.50 per month)
  • customer support: 24/7
  • UK transfer fees: free
  • eligibility: up to 2 directors, owners (shareholders) or partners

The business current account is suitable when looking to manage their funds separately from their personal arrangements, with start-ups enjoying free everyday banking for 18 months. Santander gives its customers flexible banking choices through digital services as well as access through the Post Office.

6. Lloyds Bank Business Current Account

  • account fee: free for 12 months (then £7.00 per month)
  • customer support: 24/7
  • fees: £0.85 for credits in and cheques in or out
  • eligibility: up to 2 directors, owners (shareholders) or partners

Sole traders with up to £3m annual turnover are eligible for the Business Current Account. It’s best suited for those that primarily deal with electronic payments, cash withdrawals, or deposits and cheques, as these all come with no transaction fees.New businesses and start-ups also benefit from 12 months of free banking from Lloyds Bank.

7. Barclays Business Current Account

  • account fee: £8 for Mixed Payment Plan or £8.50 for e-Payments Plan
  • plans: two price plans that focus on either cash or digital payments
  • cash payments: £0.90 or £1.50 per £100 depending on the plan
  • eligibility: maximum turnover of up to £6.5m

Barclays offers two simple price plans as part of its Business Current Account, and you’ll choose according to how your business processes finance: the ‘Mixed Payments Plan’ is suitable for businesses using cash, cheques and other methods; and the ‘e-Payments Plan’ is suitable for businesses receiving only electronic payments. The two options make it easier to identify what sole trader business bank account you need. Barclays’ monthly reward scheme helps pay back a certain amount of the bank charges, depending on your history with them.

8. Royal Bank of Scotland Business Account

  • account: choose between a start-up account or a business account
  • fees: no transaction fee for 24 months for start-ups
  • support: access to a Relationship Manager with a business account
  • community: help and support from other business owners

Royal Bank of Scotland is helping sole traders and smaller businesses stay on top of their finances, by giving them access to their accounts at all time through mobile banking apps, telephone banking and texts or email alerts. Start-ups trading for less than a year can also benefit from Royal Bank of Scotland’s sole trader bank account, with 24 months of free business banking and dedicated start-up packages.

9. Metro Bank

  • account: choose between small business, commercial, or foreign currency
  • fees: no fees if your balance remains over £6,000 for the month
  • community: 1-year free access to Enterprise Nation
  • support: access to a Local Business Manager

Metro Bank’s offering is designed to support SMEs and sole traders. To be eligible, your business must have an annual turnover of under £2m. Additionally, the account will have no maintenance fee if the balance remains over £5000.

10. TSB Business Plus Account

  • account: 25 months free day-to-day banking if you stay within agreed limits
  • extras: free Square Reader with no fees on your first £1,000 of sales
  • community: support from Enterprise Nation
  • Withdrawals: free withdrawals from an ATM

To help encourage sole traders to open a business account, TSB is offering customers a free Square Reader (worth £39) to take payments more easily when on the go. They offer 25 months of free day-to-day banking and run a daily text alert service to keep you in the loop on balances and payments.

11. Ulster Business Banking

  • account: choose between a start-up or business bank account
  • fees: £8 quarterly fee for the business bank account
  • support: a dedicated Relationship Manager depending on eligibility
  • location: suitable for sole traders in Northern Ireland

Suits to business owners in Northern Ireland, Ulster Bank’s sole trader account caters for businesses turning over £2m or under and is covered by the current account switch guarantee, helping customers join in under seven working days.

12. Monese Business Banking

  • fees: £9.95 per month for a Monese Classic plan
  • support: overdraft facility
  • accessibility: use the app in 14 different languages
  • dual access: manage your personal and business accounts in one place

Monese has a monthly fee of £9.95, making it one of the more expensive sole trader business accounts on this list, yet it's certainly not to be sniffed at. Supported in 12 different languages, it's extremely easy to open a Monese account — many users have full access within hours — and it provides users with two different debit cards for personal and business use.

13. Bank of Ireland Business Banking

  • fees: €15 per quarter
  • transfers: lower charges for international transfers
  • charges: transaction fees for different payments
  • second account: open a second business account

Bank of Ireland has a long history of supporting Irish business, making it easy for sole traders to open a business account and having business advisors in every branch. There’s a quarterly maintenance fee and lower transaction fees for online payment methods.

14. Cashplus Business Account

  • flexibility: open a free Go account or an Extra account for £9 per month
  • cashback: earn 0.5% cashback with an Extra account
  • limits: £50k max balance with Go or £250k with Extra
  • reporting: free spending reports and accounting integrations

There’s an account fee of £69 a year and features include free UK purchases and bank transfers. A sole trader bank account can be easy to set up with Cashplus, as access is given straight away after a successful application. Cashplus also offers tailored support to customers and 24/7 assistance.

15. ANNA Business Account

  • speed: get a business current account in less than 10 minutes
  • account: choose from Pay as you go, Business, or Big business
  • fees: free for Pay as you go, £14,90 for Business, and £49.90 for Big business
  • convenience: get a payment link to send to your customers online

Another digital bank, ANNA, is designed with traders in mind, with three different accounts to choose from and applications that reportedly do not affect your credit score. ANNA also creates and sends invoices for you and chases payments if they’re not on time – making it a fair business account for sole traders.

16. Virgin Money M Account

  • eligibility: designed for businesses with under £1m in turnover
  • fees: no monthly fee and free day-to-day digital banking
  • benefits: cashback on debit card purchases of 0.25%
  • borrowing: automatic access to a £1,000 overdraft

Virgin Money has joined forces with Clydesdale and Yorkshire Bank to provide users with a range of business banking options. The M account has no monthly fee, offers cashback eligibility, and an overdraft option.

Next steps for your business

Now that you know all about business bank accounts for sole traders, hopefully, you’re in a position to decide which account is suitable for you, fill out the application form, and wait for the bank to open your account!

If you’d like to borrow money, there are lots of suitable options for sole traders. These include business loans, crowdfunding, business overdrafts, and more.

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Article updated on:
February 15, 2024

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The best sole trader bank accounts

Sole traders make up 59% of the UK business population. If you’re one of them, read our guide below which covers how to set up a sole trader bank account, and compares some of the best options on the market.

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