Best business bank accounts for limited companies (Ltd)

If you run a limited company, getting a business bank account is a legal requirement as it’s a separate entity so its finances must be kept apart from your own. There are lots of accounts to choose from, including free and paid-for options, and many have functionality that makes running a business easier, such as the ability to send and track invoices. Here’s what you need to know about opening a bank account as a limited company and the accounts on offer.

Latest reviews of business bank and e-money accounts for limited companies

Lloyds Bank - Business Current Account

Finder rating

★★★★★

Customer rating

★★★★★

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• Pros/cons
• Details

No monthly account fee for the first 12 months, then £7 per month.

This business account from Lloyds offers 12 months’ free day-to-day banking for new businesses, plus dedicated support from its UK-based business management team. Electronic payments in and out of the account are always free. Account holders will also be able to benefit from a three-month free trial of Business Finance Assistance, an online accountancy package that integrates with your business accounts. This can help you to manage invoices and submit VAT returns. Additionally, you’ll have access to Lloyds Bank Academy which offers free tools and webinars to help your business thrive. To be eligible for the account, your business must have an annual turnover of less than £3 million and you must be a sole trader, partner or company director. You can apply for the account online but also manage it via the mobile app.

• Free electronic payments
• Free cash deposits and withdrawals
• Open an account online

• Fees apply after first 12 months
• No interest paid on credit balances
• Fee applies to Business Finance Assistance after three months

Account fee	N/A
Bank transfers	N/A
Accounting integrations	N/A
Requires credit check	N/A
Overdraft	N/A

Best business bank account for small businesses, sole traders and freelancers: Tide

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★★★★★

Customer rating

★★★★★

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24/7 customer support

Instant notifications

Software integration

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• Pros/cons
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Open a business account with no monthly fees.

Tide's business account is designed for companies of all shapes and sizes, including limited companies. It offers 4 different pricing plans, including a free option, so you can choose the one that best suits your company. The most expensive plan is the most comprehensive, and offers three expense cards for your team, cashback on card purchases, exclusive member perks, a dedicated account manager and a 24/7 legal helpline. But whichever plan you choose, you will also benefit from being able to sync your account with accounting software such as QuickBooks, Xero and Sage, as well as automatically categorise transactions, and send, pay and track invoices. There are no fees for spending on your card abroad, while cash withdrawals cost £1. Opening an account can take as little as 10 minutes and no credit checks are carried out. Your Tide card should arrive within 2 to 4 working days.

• 24/7 customer support
• Categorised spending
• FCA regulated
• Quick set-up
• No monthly fees
• Easy to manage accounts and track payments within the app
• Ability to set up direct debits and standing orders
• Can receive online bank statements

• No branches - all done via the web
• Doesn't accept cheque deposits
• No personal accounts
• No international transfers or interest offered

Account fee	N/A
Bank transfers	N/A
Accounting integrations	Clear Books FreeAgent KashFlow QuickBooks Reckon One Sage Xero
Requires credit check	N/A
Overdraft	N/A

TSB - Business Plus

Finder rating

★★★★★

Customer rating

★★★★★

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30 months of fee-free Business Banking when you switch to TSB.

Switch to this account from TSB and you’ll be able to enjoy 30 months of fee-free business banking. This means there will be no monthly fees or charges for paying money in or out of the account for two and a half years. You have the option to add a business debit card to your account and you’ll be able to manage your account via the app 24/7. Cash and cheques can be paid into Post Office branches and TSB branches, plus you’ll get 12 months’ free access to Enterprise Nation for tailored advice from industry experts.

• Free everyday business banking for 30 months
• Free Square Reader
• Access to payments app
• Advice service

• Monthly service charge applies after 30 months
• Fees apply to certain transactions

Account fee	N/A
Bank transfers	N/A
Accounting integrations	FreeAgent QuickBooks Sage Xero
Requires credit check	N/A
Overdraft	N/A

Best business bank account for bad credit: Cashplus

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★★★★★

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No annual or monthly fee when you apply using the Finder link.

Opening a business bank account with bad credit can be complicated. Most banks carry out a credit check when you submit your application and reject it if you don’t meet the requirements. All is not lost, though! Some companies, like Cashplus, offer banking services perfect for businesses with poor or no credit history. There are no credit checks when you apply. The only thing that needs to be verified is your contact details.

• Open an account in 5 mins
• "Cashplus iDraft" once eligible
• Currency cards for travel
• Online services in addition to the mobile app

• Charge to have your bank card issued
• Traditional bank still needed for majority of your business finance needs

Account fee	N/A
Bank transfers	N/A
Accounting integrations	Clear Books FreeAgent KashFlow QuickBooks Sage Xero
Requires credit check	N/A
Overdraft	N/A

Revolut - Revolut Business Free

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★★★★★

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Sign up today and unlock 1 month of a paid plan without subscription fees.

Revolut’s business bank account could be ideal if you’re a limited company that regularly does business overseas. The account lets you receive, hold and exchange money in more than 25 currencies worldwide with no hidden fees. You can set up as many sub-accounts in each currency as you need. Additional features include the option to make bulk payments, set up recurring payments, create and track invoices, and integrate your account with accounting software like Xero, Slack and QuickBooks. Choose from either a free account or pay a monthly fee to benefit from even more extras. To get started, simply download the Revolut app and fill in a short form. Accounts can be opened in as little as 10 minutes and come with both virtual and physical debit cards.

• Flexible account options
• Mobile app with lots of good features
• Ability to issue cards to all employees
• Easy to apply
• Freeze card if lost or stolen
• Safe and secure
• Free purchases

• Free account does not include many free transactions
• All ATM withdrawals incur a charge
• Can't deposit cash or cheques into your account
• Not yet a fully fledged bank
• Currently unable to earn interest
• Direct debits only available for EUR accounts

Account fee	N/A
Bank transfers	N/A
Accounting integrations	FreeAgent Xero
Requires credit check	N/A
Overdraft	N/A

Best business bank account for app and online banking: Starling

Finder rating

★★★★★

Customer rating

★★★★★

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24/7 customer support

Instant notifications

Software integration

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Add the new Business Toolkit onto your free Starling account, and get the first month free of charge (RRP £7pcm).

This business bank account from Starling could suit limited companies thanks to its lack of fees. There is no monthly account fee, no UK payment charges and no fees abroad either. Applying via the app is easy and you'll also get free 24/7 UK support via the app, phone or email. Account holders can benefit from integration with accounting tools including QuickBooks, FreeAgent and Xero, automated business spending categorisation, receipt capture, and international payments. Provided you're happy to pay a fee, you can also customise the account with add-ons. These include the Business Toolkit which helps you create and send invoices, calculate tax, record your VAT and submit your VAT return, a Euro business account for exchanging and holding euros, and a US dollar business account for holding, sending and receiving US dollars. Your money will also be protected under the Financial Services Compensation Scheme.

• Add the new Business Toolkit onto your free Starling account and get the first month free of charge (RRP £7pcm)
• Completely free UK current account opened and ready to use in 20 minutes
• Safe and secure
• Fully licensed by the FCA and PRA
• Free to use your card abroad including ATM withdrawals, splitting the bill made easy with "settle up" feature, competitive and comprehensible overdraft fees
• Decent interest rate paid on current account balances
• Efficient app offering a range of good features such as budgeting tools and saving features
• Has a marketplace offering competitive pensions
• Mortgages and insurance from other growing fintech companies
• Teen account options
• 24/7 customer support (for all types of enquiries)

• Relatively new so does not offer every feature, e.g. mortgages
• No bank branches, all done via the web
• Only available to UK residents

Account fee	N/A
Bank transfers	N/A
Accounting integrations	FreeAgent QuickBooks Xero
Requires credit check	N/A
Overdraft	N/A

HSBC - HSBC Kinetic Current Account

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★★★★★

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No monthly account fee for the first 12 months.

If you're looking for a business account for your limited company, you can apply for the HSBC Kinetic account in a matter of minutes via the app. There's no monthly maintenance fee for the first 12 months and you'll also be able to apply for an overdraft of up to £30,000. In addition, there is the option of a business credit card and a business savings account. Users can manage direct debits and standing orders on the account, freeze and unfreeze their debit card, analyse spending with automatically categorised transactions, and keep track of their finances with a monthly breakdown of cash flow. You will be able to scan and deposit cheques via the app, and make payments of up to £25,000 per day. Larger payments can be made via business telephone banking. The account can be accessed on your mobile or on your desktop.

• Easy to apply for and manage
• Arranged overdraft
• Useful app features to help you track spending
• No monthly fee for 12 months

• Interest is charged on overdraft
• Monthly maintenance fee applies after first 12 months
• No interest paid on credit balances

Account fee	N/A
Bank transfers	N/A
Accounting integrations	QuickBooks Sage Xero
Requires credit check	N/A
Overdraft	N/A

Expert analysis: How business bank accounts help you run your limited company

Cathy Hudson

Money expert

When you’re opening a business bank account you can either choose one from a traditional bank, such as HSBC or Lloyds Bank, or one of the digital-only challengers, such as Starling Bank or Tide. Whichever you choose, they all have specific features that make running a business easier.

HSBC Kinetic gives you a monthly breakdown of your cashflow, which can be categorised into different types of spending, and the app lets you scan and deposit cheques into your account. Lloyds’ business accounts let you access its business management team or a relationship manager if your business is larger, and there are online resources to help you hone your business skills.

Starling Bank, launched in 2014, is a digital-only bank that lets you operate your account via an app or online. As with accounts from the other newer banks, its advanced technology gives you extra functionality that you don’t usually get with a traditional bank, such as the ability to integrate with accounting software such as Zero and QuickBooks. You can apply for an account from the app.

Also a digital bank, Tide has been around since 2015. Unlike Starling, it only offers business accounts. It automatically tags and categorises your spending, allows you to manage expenses by uploading receipts, which are then matched to transactions, and send and manage invoices.

Do you need a business bank account for a limited company?

If you’ve set up as a limited company and you’ve registered with Companies House, you will be required to open a business bank account if you intend to deposit funds, and make and receive payments (which is going to be the case for most).

A limited company is a type of business structure where the company has a legal identity of its own, and the liability of the owners is limited to the capital that they have invested.

Limited companies are privately owned by one or more people, and they must be registered with Companies House, pay corporation tax and file annual accounts.

Can you run a limited company from a personal bank account?

The short answer is no! As a limited company is a distinct legal entity, its finances must be kept in a separate account to your personal finances.

The situation is slightly different if you’re a sole trader – you can use your own personal current account to make and receive payments relating to your business, but only if your banking provider allows this type of usage. And if your bank sees a huge volume of transactions going through your personal current account, it may still request that you open a business account. Learn more about using your personal bank account for your business.

What are the other advantages of a business bank account?

There are a number of advantages to having a business account.

For a start, you’ll be able to keep the business finances separate to your own, which will make them much easier to manage and monitor, especially when it comes to expense and tax reporting.

Many accounts also come with enhanced features, such as invoicing and expense tracking tools, or the ability to integrate with accounting software.

Your chosen banking provider may also offer overdrafts, business credit cards or business loans, if you’re interested in those options.

One thing to be aware of is that unlike most personal bank accounts in the UK, business accounts often come with a monthly fee and other transaction charges. This isn’t unusual, but the level of fees being charged will be one of the things for you to compare when selecting which business account to open.

How to choose a business bank account for a limited company

It’s important that you consider all of the features and fees that come with the various business accounts out there on the market, before deciding which one to apply for.

Here are some key questions that you should look into when researching business bank accounts:

• Does the account come with a free trial period?
• What is the monthly or annual account fee (after any free trial)?
• What are the fees for transactions such as direct debits, international payments or ATM withdrawals?
• Can the account be easily managed online or through a mobile app?
• Does the bank have a branch network, if you prefer to speak to staff in person?
• What features does the account have e.g. invoicing or expense monitoring tools?
• Does the account offer integration with accounting software such as Quickbooks, Xero and FreeAgent?
• How quickly can I open the account?
• Will I be able to open the account if I have a bad credit score?

How to open a business bank account for a limited company

Once you’ve researched and chosen which business account you’d like to go for, you’ll need to apply to that banking provider to open it. Many applications can now be done online or through a mobile app (especially given the growing number of digital-only accounts), although some banks with a branch network might ask you to visit in person.

Every business bank account will have a slightly different application process, but here is a general list of information and documents that you should have to hand:

• Companies House registration number for your business
• Your business name and address
• Your own personal details and contact information
• A form of ID
• Proof of address
• Estimated business turnover
• Personal bank or financial statements

Most business bank account providers will also carry out some kind of credit check on you, although there are a few that will let you open an account without one. For more information on opening a business account without a credit check, check out our guide to opening a business account with a bad credit score.

How to open a business bank account as a non-UK resident

If you’re not resident in the UK it may still be possible to open a business bank account here. We have gone further into this topic with a dedicated guide.

The traditional high street banks are likely to offer you a type of international bank account, though you will still need to provide all of your ID and address information (for your current country of residence).

The other option is to go with one of the digital-only accounts which can be opened online or through a mobile app – some of these banking providers (not all) won’t ask you for proof of address or conduct any credit checks.

Bottom line

It’s essential to have a business account if you’re a limited company as it’s a legal requirement. It will also give you lots of useful tools to help you run your business. There are plenty of options, ranging from accounts from the traditional big banks to newer app-based accounts, so you’ll be able to find something to suit your business. Just make sure you look at the costs and features carefully to work out which ones would be best for your needs.

Frequently asked questions

• Is it illegal to use a personal account for a limited company?

  As a limited company is a distinct legal entity to you as an individual, its finances must be kept in a separate account to your personal finances. If your limited company plans to accept payments from customers or other third parties, you should open a business bank account for the company, as opposed to another personal current account.

• Can a limited company have 2 bank accounts?

  Yes. There is no rule that says a limited company can only have one business account at any given time. Depending on the kind of work your business does, there may be perfectly sensible reasons to have more than one business bank account.

• Can I switch my business account through the Current Account Switch Service (CASS)?

  Yes, you can use the service to switch account if you’re a small business with fewer than 50 employees and a turnover of less than £6.5m a year as long as the bank you’re switching from and to are signed up.

• Do I have to set up the account in the name of my limited company?

  Yes, as the company is a distinct legal entity the account must be in the name of the company not individual directors or shareholders.