Best business bank accounts for 2020

Want to avoid fees or integrate with your bookkeeping software? Here's our pick of the top business current accounts.

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Starling Business Account

Starling Business Account logo
  • FREE business account
  • Award winning 2019 & 2020
  • Fully licensed by FCA & PRA
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★★★★★
800+ customer reviews
Data indicated here is updated regularly
Name Product Account fee Bank transfers Accounting integrations Non-Sterling transactions Overdraft Account management Key benefits
Starling Business Account
Free
Free
Xero, FreeAgent
Free

Min. 18 months trading to apply
App, Online
Add the new Business Toolkit onto your free Starling account, and get the first month free of charge (RRP £7pcm)
Tide
Free
£0.20
Free if both accounts are with Tide
Xero, QuickBooks, FreeAgent, ReckonOne, Kashflow and Sage
Free
App
Free spending abroad and at home in any currency, instant payment alerts, automatic categorisation
Amaiz
£9.99 per month
Free in first month
Free Starter plan available
£0.20
FreeAgent, Xero, Sage, Reckon One, Kashflow, QuickBooks
1%
0.5% in Europe, 1% elsewhere
App, Online
ANNA
Free
Free up to a max. balance of £5,000 (or up to £500 paid in per month)
Free
2 free transfers per month and unlimited free transfers to Anna accounts
Coming soon
Free
App
Earn 1% cashback for paying with your ANNA card in selected categories. Enjoy premium benefits free for the first 6 months.
Cashplus business
£69
First year's annual fee refunded.
£0.99
Free transfers in first 3 months
FreeAgent, Xero
2.99%

On invitation
App, Online
First year's annual fee refunded.
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Need more credit?

If your business requires additional credit, you also might want to consider taking out a business credit card. Whether you’re running a startup or a large established company, business credit cards offer a range of benefits that can help you better manage your finances.

Business credit cards give you greater control over your business cash flow by allowing you to cover any revenue shortfalls and freeing up additional capital that can then be reinvested in your business. You can also use a business card to increase your company’s spending power, better manage your expenses, and even earn business-focused rewards.

Capital on Tap Business Rewards Credit Card

Access up to £50,000 for your business with a Capital on Tap business card

  • Up to 56 days interest-free credit on purchases
  • Reward yourself with cashback or Avios
  • Quick application in 2 minutes

Representative example: When you spend £1,200 at a purchase rate of 39.41% (variable) p.a., your representative rate is 39.9% APR (variable).

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How do business accounts work?

A business bank account basically works like a personal one – the main difference is that it’s dedicated to your business’s finances. You should therefore expect the same features, such as a debit card, the ability to make and receive payments, an overdraft option, a banking app and so on.

However, business accounts can be a bit trickier than personal ones.

First of all, the fees are often higher. You can get yourself a free current account pretty much anywhere, but it won’t be as easy for your business. Secondly, there are more options and different ways of approaching business banking, so the best deal for your business will largely depend on what your business looks like. But no worries, we’ll help you figure out how to approach this particular problem.

Things to consider when applying for a business account

Before kick-starting your research, you should think of what your business needs and why. Best deals and options vary accordingly, so try to consider the following:

  • Business type. Sole traders, startups and charities, for example, can often get dedicated account options and deals.
  • Annual turnover. Over a certain amount, you won’t be able to apply directly. Many banks will want to talk to you to negotiate a bespoke solution.
  • Usage. Many bank accounts charge a monthly fee and then all transactions come for free. However, in some cases, the monthly fee will be zero or very low, and you’ll be charged according to the payments you make. So it’s worth spending some time figuring out how much you’re planning to use your business account.
  • Cash. Not all financial institutions offer cash deposits and they sometimes come for an extra fee. If you have to deal with a lot of cash due to the nature of your business, you may want to consider this when comparing bank accounts.
  • Ways of banking. If you’re a tech-savvy person who likes doing everything on your smartphone, don’t forget to check if there’s an app and if it looks as slick and tidy as it should. On the other hand, if you’d rather talk through your options in person, you may want to avoid digital-only banks.
  • Trading abroad. If you often receive or make international money transfers, or you travel a lot for business purposes, you need to be careful with the extra fees many institutions charge.
  • Related products. Are you just looking for a current account, or do you also need a savings account or a credit card? These things aren’t necessarily related, but having them all with the same financial institution may save you some bureaucratic hassle.

How to compare business bank accounts

Once you’ve got your needs clear, you’re ready to start looking. Here are some of the parameters that can help you with your comparison:

  • Fees. Free business banking isn’t really a thing, so how much is it going to cost you?
  • Introductory offers. You can sometimes get free banking for a year or two when you sign up – just remember to check what happens when the offer expires and switch if the deal isn’t worth it anymore.
  • Borrowing options. Can you get an overdraft if your business needs it? How expensive is it?
  • Interest rate. You won’t find any sky-high rates among business current accounts, but some banks do offer a little percentage, which can be a nice cherry on top of the cake.
  • Accounting integration. It would be nice if you could manage banking and accounting from the same platform, without uploading and downloading dozens of spreadsheets, wouldn’t it? We’re not quite there yet, but some banks will offer some kind of integration with accounting software such as Xero – your finance team will like that.
  • Perks. Again, don’t expect banks to be too generous with business current account customers, but some do offer some rewards in the form of cashback or discounts.

How to apply for a business bank account

The main difference between personal and business banking is in the paperwork – opening a business account will require more time, effort and documents, and in many cases you won’t be able to do it all online.

Here’s a list of the documents and information you should be prepared to give:

  • Your personal details. Including three years of address history. If there are other partners or directors, you’ll also need their details.
  • Your business’s details. Including address, contact details and registration number.
  • Financial information. Annual turnover, how much money you plan to pay into the account, tax status, sources of income.
  • Information on other financial arrangements. Such as existing credit cards and loans.

What are the benefits of opening a business bank account?

Separating business and personal banking is a necessity for anyone who owns a company. Not sure why exactly you should open a business bank account? Here are some of the many reasons:

  • All your business transactions are separated from your personal ones which makes your business accounting records more organised.
  • Some banks have mobile apps so you can check your records and make business payments anytime you want, anywhere you are.
  • You can set up standing orders for business expenses. No need to worry about not paying on time anymore!
  • You can pay your employees easily.
  • If you’re a small business owner, you may be able to enjoy a free banking period for some time.
  • From insurance to coffee supplies, some banks offer discounts for products and services that you may find useful for your company.

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