Coconut business account review

We take a closer look at the current account aimed at freelancers and the self-employed as well as small business owners.

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Coconut

Coconut is a fresh face in the financial technology market, hoping to make money management easier. Coconut is all about providing a useful and innovative tool for tracking business finances.

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Tide

Try Tide as an alternative to Coconut

  • Award-winning, smart, simple business account
  • The hassle-free account for your business
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What is Coconut?

Coconut aims to make your business finances easier, and by doing so it will “free you up to do more of the work you love”. It does this by relieving you of some of the stress that comes with your tax returns and expenses – estimating the tax you’ll owe, documenting paid or unpaid invoices and tracking expenses.

Alongside these features Coconut works as a business current account, giving you control over the money you earn through your trade.

How does Coconut work?

Apart from the card you are sent in the post after you register, Coconut works through an app on your phone.

Rather than relying on bells and whistles, Coconut delivers an app which works to make things as simple as possible for the user. Displaying your earnings front-and-centre on the introductory screen, Coconut encourages you to explore the app from there.

The Coconut app provides a number of features including:

  • Taxes: See your earnings and the estimated amount of tax you will be required to pay at the end of the financial year.
  • Payments: Keep a record of your paid and unpaid invoices and how much they’re worth.
  • Activity: A record of your spending. Not only a way to keep an eye on where your money’s going, but also necessary when tax returns are due.
  • Card: Activate and deactivate your card from the app.
  • More: Get a rundown of FAQs, change your tariff and get more out of your Coconut account.

Coconut’s fees and key features

Coconut offers a free or pay-monthly account:

“Start”

  • No monthly fee.
  • Automated bookkeeping.
  • Receipt capture.
  • Fee for cash withdrawals.
  • Tax estimation.
  • Limited number of invoices.
  • Commission charge on non-sterling tranactions.

“Grow”

  • £5 monthly fee.
  • Automated bookkeeping.
  • Receipt capture.
  • Fee for cash withdrawals.
  • Tax estimation.
  • Unlimited invoices.
  • No charge on non-sterling tranactions.
Coconut Start
Coconut Start
Account feeFree
FSCS protected
UK ATM charge£1
Account software integration
Requires credit check
Credit check
Key benefitsGet £10 when you open an account by October 31st
Overdraft
Freeze card from app or online banking
Instant notifications
Interest rate0%
Current account switch guarantee

Doing business overseas with Coconut

Coconut Start
Coconut Start
Overseas transaction charge2% currency conversion fee
Overseas ATM charge£1
International transfer charge2% foreign currency exchange fee

Is Coconut safe?

Coconut is registered with the FCA and security is high on its priority list. Your account is kept behind a two-step authentication process and your password is encrypted using industry standard encryption. Coconut says it also regularly scans for threats and backs up data to make sure it’s always safe.

Pros and cons of Coconut

  • Open an account quickly and easily for free.
  • Card sent to you upon registration.
  • All Coconut’s services are managed through the app.
  • A record of your spending helps you save money and work out your annual income.
  • The tax page helps calculate how much tax you will owe at the end of the financial year.
  • Paid-for account option offers useful features to help your business grow.
  • Monthly subscription fee for premium facilities.
  • Fee for cash withdrawals.
  • No credit facility.
  • You’ll probably still need a traditional bank account for some of your financial needs.

Alternatives to Coconut

Tide

Tide is another self-employed budgeting app, which provides an online-only business current account.

Just like with Coconut, this app will assist you with your invoices, taxes and business expenses. There’s a range of charts and graphs to help you get to grips with your financial position.

There are no extra charges applied when you use your Tide account overseas. However, you will face a 20p charge on all transfers in and out of your Tide account. Card transactions cost nothing. ATM withdrawals will cost you £1.

You can apply for a business loan of up to £1,500 through Tide.

ANNA

ANNA is a similar budgeting app, which can be used for employees or self-employed individuals.

It comes with a business current account. You can also use the app to make use of invoice tracking, spending reports and budgeting.

On top of that, you can pull together your bank accounts, credit cards and investments and view them all in one place.

ANNA offers 1% cashback on a range of business expenses too.

For a premium ANNA account, you’ll either pay £4.90, £9.90 or £24.90 per month depending on your business income.

Amaiz

Amaiz is another digital-only current account for sole traders and company owners. It’s packed with useful features to help self-employed people manage their finances easier.

On top of that, you can connect your Amaiz account to professional accounting software.

If you upgrade to a premium version for £9.99 a month, you’ll be able to access advice from ACCA-certified accountants. There’s a one-month trial, so you can see for yourself whether this service is useful to you.

Cashplus

CashPlus might be a particularly attractive option for self-employed people with a poor credit history.

It doesn’t require a credit check to open a CashPlus mobile-only business current account. It also has a credit-builder feature, where it “lends” you your monthly account fee, then treats this fee as a loan repayment, helping you build your credit score.

There are three accounts available: Flexiplus (free), Activeplus (£5.95), Deluxe (£9.95). The main difference between the accounts is the fees charged on payments and ATM withdrawals. If you’re using the account a lot, you’ll get the most benefit from a premium account.

You can apply for an arranged overdraft on your account too.

Our verdict

Coconut is a strong digital-only proposition, and particularly suited to smaller businesses and sole traders. It’s easy to use all of its services through the app, and the invoicing tool and tax calculation feature are particularly eye-catching. Although the basic account is free to open and use (apart from a £1 ATM fee), you may find you need the paid-for version for the full range of services, or you may prefer an account with one of the more traditional banking providers if you have more complex business banking needs.

Platforms similar to Coconut

Data indicated here is updated regularly
Name Product Account fee Bank transfers Accounting integrations Non-Sterling transactions Overdraft Account management Key benefits
Tide
Free
£0.20
Free if both accounts are with Tide
Xero, QuickBooks, FreeAgent, ReckonOne, Kashflow, Sage
Free
App, Online
Register your limited company for free (usually £12) and open a Tide account in one go: choose 'Register a company' from the Tide homepage menu
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)
Mettle
Free
Free
Free agent, Xero
Unable to make international payments
App
Comes with a suite of free accounting software to integrate with
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
Get your first month FREE
HSBC Kinetic

No monthly account fees during early access*
Free
Xero, Quickbooks, Sage

International payments unavailable

Up to £30,000 subject to eligibility and application
App, Online
*No monthly account fees during Early Access. Once Early access is over the service will be free for 18 months, thereafter a monthly charge of £6.50 applies
Cashplus business
Free
£0.20
First 10 payments sent each month FREE
FreeAgent, Xero, Sage, Kashflow, Quickbooks, Clearbooks
2.99%

On invitation
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.
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