Coconut business account review

Coconut has confirmed that it’s no longer accepting new applications for its business current account. But if you’re an existing Coconut business account holder, then your account will remain open and we have reviewed the offering below.

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. It’s one of a growing number of business accounts available online only.

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 “side hustle” account for £3.60 per month and a “professional” account for £12 per month:

Product Name	Coconut Start
Account fee	Free
FSCS protected
UK ATM charge	£1
Account software integration
Accounting integrations	N/A
Requires credit check
Credit check
Key benefits	Get £10 when you open an account by October 31st
Overdraft
Freeze card from app or online banking
Instant notifications
Interest rate	0%
Current account switch guarantee

Doing business overseas with Coconut

Product Name	Coconut Start
Overseas transaction charge	2% currency conversion fee
Overseas ATM charge	£1
International transfer charge	2% 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

Alternatives to Coconut

Tide

Tide is another accounting-style app that can be used by the self-employed, and it provides an online-only business current account too.

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.

Tide has free and paid-for plan options (at £9.99 and £49.99 depending on your usage), plus you can also apply for a business loan through Tide.

ANNA

ANNA is a similar app, which comes with a business current account. You can 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.

There is a free version available, and for a premium ANNA account, you’ll either pay £4.90, £9.90 or £19.90 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.

There’s a free version available, and if you upgrade to a premium plan for £9.99 a month you’ll also 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.

The account fee is £69 per year and you can apply for an arranged overdraft on your account too.

Our verdict

Coconut is a strong digital-only proposition, and particularly suited to self-employed people who run small businesses or are 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. Learn more about other business bank accounts.

Get started by visiting Coconut’s website and sign up for an account. If you have read this review and decided that Coconut’s account is not for you, you can also compare other business bank accounts on the market.

Frequently asked questions

• How does Coconut make money?

  Coconut makes money through several different avenues:

  • Interchange fee: Every time a transaction is made using a Coconut card, Coconut earns a small interchange fee for processing the payment.
  • Subscription fee: The paid-for Coconut “Grow” account costs £4.95 per month.
  • Other fees: Coconut’s fees, while small, add up over time.

• How easy is it to top up?

  Transfer money or set up direct payments to your Coconut account to get it up and running.