Online business

Best UK Online Business Bank Accounts for November 2022

The difference between a business account and a personal bank account

A business bank account is designed to hold and manage money generated solely by your business. It allows you to perform your day-to-day business transactions such as payroll, purchase of materials, and payment for goods and services. Conversely, a personal bank account is for personal finance.

Often the tools, features, and fees differ between a business bank account and a personal bank account, although this can vary from provider to provider.

How to choose the best business bank accounts for you

There are a wide variety of business current accounts available and although it may seem obvious to apply for a business bank account at the same institution where you hold your personal bank account, it is not always the best choice. When deciding on an account consider the following:

Account maintenance fees: Although many online business bank accounts offer a free banking period for basic services, you should check that the tools available are sufficient and determine whether you will need to upgrade to a business bank account with monthly account fees.

Operating costs: Consider your use of the account and any business bank account fees you may be subject to, including cash withdrawals, payment fees, transfer fees, ATM fees and any other associated costs. If you need help with bookkeeping, check that the vendor offers free bookkeeping software.

Discovered: If you may need overdraft facilities, check that the provider you are considering has this option.

Business loan: Few online bank account providers offer business loans. Starling usually has a subject to apply, however, that has been suspended at the time of this article. Cashplus offers a loan and is worth considering if this is a priority for your business.

Interest: Very few online banks offering a business bank account will offer interest on funds held in your account. This is a disadvantage if you are in the dark and looking to grow your funds. In that case, you might want to consider Wise Assets, which offers the option of investing funds held in your business checking account that you can access normally. You can also consider a business bank account that also gives you access to an interest-bearing savings account.

Pay in tools: Are you likely to have to pay a lot of cash and/or checks? Be sure to check the fees and level of convenience, because unlike traditional banks, online banks do not have physical branches. Many will allow you to pay into your account at a post office or pay in service, and some, like Starling, have the option to pay by check using your phone’s camera.

Features: Make sure you have considered the features and tools that will benefit your business. You may need separate pockets for tax funds or the ability to store and categorize your receipts within the app.

Who should have a business account?

If you have a limited liability company, you are legally required to have a business account because your business finances must be kept separate from your personal finances.

Should an individual entrepreneur consider a business account?

As an individual entrepreneur, you are not required by law to have a business account. However, a business account can be useful for everyone, including sole traders and self-employed people, because business bank accounts help separate finances and make filing taxes easier. A small business bank account can help manage business finances and free up time for running the business.

What is the current account switch guarantee?

If your new bank offers the current account switch guarantee, it means that they offer to support all administrators involved in the transfer of your account from your old provider to your new provider. This includes moving your balance and changing your payments.

Is it possible to open a business bank account with bad credit?

Bad credit can make opening a business account more problematic and you may not always have the choice you might otherwise have. However, there are professional account providers that will allow you to open an account without a credit check, such as Tide.

Do traditional banks offer online and mobile banking services for businesses?

Yes, many high street banks will offer online and mobile business banking, including the Royal Bank of Scotland and Co-operative Bank. However, there will be associated costs and you may not have access to the same features as challenger banks.

What is the best online business bank account for startups?

In my opinion, one of the best online bank accounts for startups has to be Starling Bank. Starling offers free business accounts and is a fully regulated bank, covered by the Financial Services Compensation Scheme (FSCS), unlike Revolut, which is still seeking a full banking license in the UK.