When setting up your business, you’ll need to choose the best bank account to match your requirements. As well as navigating interest rates and monthly account fees, you’ll also want to look at any deals and subscriptions that each account may offer as a bonus.

If you’re a limited company, you’re required to have a separate company bank account, but it’s also strongly recommended for sole traders, so that you can keep your personal and business finances separate. This makes things so much easier when it comes to filing your self-assessment.

If you’ve been in business for years, it could still be worth checking out the competition when it comes to business banking, because sometimes the grass really is greener…

What Should I Look For in A Business Bank Account?

Enticing interest rates – some accounts may still have these, so it’s worth looking! Monzo Business Lite lets you earn 1.6% on the money in your Instant Access Pots for balances of up to £100,000.

Low account fees, or free periods – some business accounts have a beginner period with no fees, which can be worth taking advantage of. Lloyds offer digital business banking with no account fee for 12 months, and Mettle by Natwest has no account fee at all.

Deposit protection – check the amount of money that would be covered if the bank were to go under. The standard is £85,000 but not all banks and building societies are FDIC insured.

What to check before opening a Business Bank Account?

Eligibility Criteria – sometimes bank accounts will have certain requirements you have to meet before you can create an account. For example, a minimum turnover. Check these first before getting your heart set on an account that’s not available to you.

Convenience – many business accounts are solely online, so check what services are available if you need to contact your bank or deposit cash/cheques. Many, like Cashplus, allow cash deposits via the Post Office.

Transaction Limit – is there going to be a minimum or maximum requirement on the account that you’ll be responsible for meeting?

Application Fee – some accounts require a fee to open the account, for example Card One Money has a £55 application fee.

Multiple Cards – This could be useful if you have several team members. Tide lets you control and simplify team spending with up to 50 Expense Cards. You can then view itemised transactions and attach receipts all in the app.

Added Bonuses:

Accounting software> – some business bank accounts include accounting software or tax advisors, which can save you money if you would have otherwise paid for these services elsewhere. For example, Barclays includes free invoice and accounting software provided by FreshBooks (worth over £260 per year). Coop Bank customers get free, unlimited access to the Go Get Paid app – the fast, simple, secure way to help request payments & get paid on time.

Cashback – some accounts will offer cashback on debit card spending, for example, Virgin Money offers 0.25% cashback with no cap.

Choosing the right Business Banking Account for you

As an accountancy practice, we would never advise you on specific banking choices, but we hope that this blog can be a useful guide to what you should be considering when setting up as a sole trader, freelancer, contractor, or as a limited company.

*This blog is not in connection or affiliated by any of the banks named. We advise you to speak to each bank at the time of opening an account to seek current offers at that time.*

For accountancy services and support, please do get in touch with our friendly team who will be happy to help.