13 min read6 January 2020
Having a bank account that fulfils your needs is essential for getting your business to flow. But what are the best start-up bank accounts?6 January 2020
When running a business, a bank account that best suits your needs is crucial, particularly if you’re just starting out. It’s vital to be happy with your business current account which, among other things, should be flexible, easy-to-use and convenient. Then there’s the cost. Every penny counts when you’re establishing a business, and that includes finding a bank account with reasonable fees and features.
While business bank accounts usually come with a variety of charges, many banks offer periods of fee-free banking to new customers. As a general rule of thumb, these accounts are aimed at small and medium-sized firms that are just starting out. There are other perks designed to draw people in such as online access coupled with phone or branch support.
As with other financial products, however, it’s important to keep an eye on the length of fee-free tariffs and check how much you’ll pay once the introductory offer comes to an end. If the costs go up considerably, it may be worth switching to another provider.
Here, we analyse 18 different start-up business bank accounts so you can compare and contrast to find the best one for you.
Every care has been taken to provide accurate info on each account provider. All facts and stats are right (according to the public websites) as of January 2020.
|Company||Monthly Fee||Fee-free Period|
|Bank of Ireland||Variable||24 months|
|Bank of Scotland||£6.50||18 months|
|Clydesdale Bank||£6.50||25 months|
|Lloyds Bank||£6.50||18 months|
|NatWest||from £5||18 months|
|Royal Bank of Scotland||Variable||24 months|
|The Co-operative Bank||£5||30 months|
|Ulster Bank||Variable||18 months|
|Yorkshire Bank||Variable||25 months|
Below, you can find the details of each bank’s plans and features. We've listed these in alphabetical order to help you navigate the bank account providers more easily.
With exclusive access to Bank of Ireland’s FCR Launch Online package, this includes a free custom-built webpage for 12 months plus a free .com domain registry and GoldenPages.ie listing worth €425. The offer is only available to Bank of Ireland Business Start-Up customers.
12 months free day-to-day business banking for new business start-ups. Expert advice on helping new businesses get started and develop.
There are two price plans to choose from, designed for the way your business makes and receives payments. These are the Mixed Payments Plan, which is for businesses that use cash, cheques or a range of ways to make and receive payments, and the e-Payments Plan, for businesses that receive electronic payments and make payments mainly through online banking and debit cards.
The loyalty reward means that the bank pays back a proportion of the charges it applies to your current account on a monthly basis. For example, a business with an annual credit turnover of up to £99,999.99 which had been a customer for one to five years would receive 5%.
This is simple banking and an alternative to a high street business bank account. There are no monthly account management fees, it’s free to receive banktransfers and there are no UK purchase transaction fees. There is one annual fee of £69.
Part of the same stable as Yorkshire Bank, Clydesdale Bank’s business current account is much the same as the one on offer from Yorkshire. This includes the generous 25 months free day-to-day banking offer.
HSBC customers can make cash deposits, withdrawals or submit balance enquiries at any Post Office branch with their debit card. When the free business banking period finishes, a fixed price of £6.50 a month for the following 12 months will be levied. Customers can deposit up to £3,000 cash per month during this time. If they exceed this limit, the fee for further cash transactions is 0.50% of the value deposited.
18 months free day-to-day business banking for new businesses. Dedicated support form UK-based management team.
An 18-month free banking period will be helpful for start-ups but bear in mind that when that 18 months is up, a monthly fee of £6.50 is applied as well as other charges. These include fees for cash payments (in or out and varying from 80p to £1 per £100), 65p for each cheque and 65p for credit in. Electronic payments, in and out, continue to be free.
No account fee if your daily balance stays over £5,000. Also, 50 free transactions per month if the balance is over £5,000. Accounts are available for new businesses including sole traders. 24/7 call phone banking from a UK-based call centre. Stores that are open seven days a week, 8am to 8pm weekdays
When compared to some of the more traditional financial institutions, Metro Bank looks tempting. Its business bank account has been designed to support businesses with a turnover of under £2 million a year. The pricing is simple – it offers free banking to companies who maintain more than £5,000 in their bank account throughout the month. A fee of £5 per month is applied each month that the balance goes below £5,000. Some experts say it is one of the best business accounts around.
Mettle is a newcomer to the FinTech scene offering mobile first banking for those with balances up to £100,000. Launched by NatWest, their business current account can be opened in minutes and boasts fee-free banking.
18 months free business banking, before standard published tariff applies (the minimum monthly charge is £5).
NatWest’s start-up business account is available for businesses that have been trading for less than one year and have a projected or existing annual turnover of less than £1 million. The account also allows access to FreeAgent, an easy-to-use tool for business book-keeping. There is also free access to NatWest’s Receipt Management Tool. In addition, those who take out a business credit card won’t pay an annual fee for the first 12 months. After that, the annual fee is £30 per card issued. Similarly, once the 18 months free banking is up, a monthly charge kicks in as well as other fees for various types of transactions.
24 months free business banking before standard published tariff applies.
Although many of the terms and conditions are the same as NatWest (which is part of the Royal Bank of Scotland Group), the RBS start-up account offers a longer introductory period for free business banking of 24 months. But during this time you will pay for unarranged borrowing, additional service and Bankline charges.
Free everyday banking for start-ups for 18 months (£7.50 standard monthly fee). Standard day-to-day banking.
With no monthly account fee for the first 18 months, this account is suitable for businesses in their first year of trading and also if it’s your company’s first current account with Santander. The ability to bank online, over the telephone or in a branch will also appeal to some people. In addition, Santander has won multiple awards for its business current account from financial experts.
At first glance Starling's business offering is compelling – zero monthly fees and zero fees on domestic transactions. Aimed at owners of limited companies and the self-employed, Starling offers oferdraft facilities and plenty of business planning and accountancy tools.
If you prefer your banking to be ethical, The Co-operative Bank could be up your street. Plus, that 30 months free period is hard to beat.
Tide enjoys a 8/10 score on TrustPilot. Because it’s not a high street bank, Tide users manage their account and access its services through the app. Designed for small businesses, freelancers, sole traders and established enterprises, business owners can account for free, and get a contactless MasterCard plus up to 35 team cards for employees. Iwoca is fully integrated into Tide, meaning its customers can apply to iwoca for business funding and get a decision without leaving the app.
To help encourage firms to open a business account, TSB is offering customers a free Square Reader (worth £39), and 25 months of free day-to-day banking is a great offer. TSB also runs a daily text alert service to keep you in the loop on balances and payments.
Dedicated account for small businesses in Northern Ireland (businesses must be registered in Northern Ireland).
Ideal for business owners in Northern Ireland, Ulster Bank supports new businesses through its start-up package which is available to businesses that are registered in Northern Ireland, have been operating for less than 12 months and have a projected annual turnover of under £1 million. Remember that charges apply after 18 months.
With one of the longest free day-to-day business banking offers on the market, this makes Yorkshire Bank’s business account very appealing and it is arguably one of the best business bank account for start-ups. This account is also a 5-star Moneyfacts-rated account. A cash limit (paid in, paid out or exchanged) of £250,000 per year applies. And, of course, charges will be applied once the initial 25 months is up.
While all this information may be a lot to take in, it’s important to take your time when setting up a business bank account - whether that’s a start-up bank account, a branch-based one or a product that is purely online. Top of your checklist should be the charges levied once the introductory fee-free period is over. And, whatever you decide to do, shop around first.
Download our free guide for start-ups and small companies looking for finance to help them grow. It covers the different types of finance, examines their pros and cons, and includes some useful tips.Send me the guide
Get a regular dose of the best small business finance news, stories and curated articles sent direct to your inbox. Sign up for our newsletter. No spam just inspo.