We take a the current account aimed at freelancers and the self-employed.
Coconut is a fresh face on the financial technology market, hoping to make money management simpler. Unlike many other growing fintech companies Coconut is not presenting itself as a challenger bank, instead focussing on providing a business current account to freelancers.
Read on to find out more about Coconut and whether it might be an option for you.
What is Coconut?
Coconut aims to make freelance financing easier and through doing so “freeing you up to do more of the work you love.” Coconut does this by relieving you of some of the stress that comes with your tax returns and expenses, as well as documenting your paid and unpaid invoices.
Alongside these features Coconut works as a business current account, giving you control over the money you earn through your trade.
An alternative to Coconut
Revolut for Business
- Business accounts made easy
- Make international payments quickly
- Get prepaid corporate cards
- Don't worry about the hidden fees
- Cutting edge multi-currency current accounts
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, Coconut encourages you to explore the app from there.
Along with the introductory screen Coconut 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 here.
- More: Get a rundown of the FAQs, change your tariff and get more out of your Coconut account.
Using Coconut abroad
Unlike some of the other start-up banks and fintech companies, Coconut hasn’t designed itself around day-to-day spending.
Coconut specialises in delivering a service for freelance businesses and doesn’t spread itself too thin; if you are looking for a card to take on holiday then it may be better to look somewhere else.
Coconut fees, limits and pricing
Coconut is still in beta and only offers a free account at the moment, but a pay-monthly account has been promised and is due to arrive soon. Both sets of fees will be featured here:
Both accounts come with a handful of fees and limits, including:
- A maximum of £40,000 in the account at one time.
- £1 charge every time you withdraw money.
- A £4 charge if you require a replacement card.
- You will also be charged £2 for every withdrawal made abroad.
- With the unpaid account you get 10 free bank transfers a month, after those each one costs 20p. However, during the beta they all cost nothing.
While you do have to pay a subscription fee, the pay-monthly account does have its advantages:
- A number of extra app-features are available through the paid account. These include the ability to invoice, to share access with your accountant and to connect external bank accounts.
- You get 20 free transfers a month, with any others costing 20p.
The free account is useful for keeping track of your money and estimating your yearly tax contribution, a great tool for small freelance-business owners. The paid account has more features, but with a £4.95 monthly price tag you may want to consider the size and success of your business before subscribing.
Is Coconut safe?
Security is high on Coconut’s priority list, and Coconut works hard to make itself as safe as possible. Your account is kept behind a two-step authentication process and your password is encrypted using industry standard encryption.
Coconut 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.
- Card sent to you upon registration.
- A record of your spending helps you save money. Additionally this feature is a great help when you declare your income at the end of the financial year.
- The tax page helps calculate how much tax you will owe at the end of the financial year.
- Safe and secure.
- Paid account offers many useful features to help your business grow.
- Registered with the FCA.
- The app is still in beta.
- The subscription service is expensive for a small-time freelancer.
- There is a large waiting list for Coconut so registering may take a bit of time.
- Fees and limits on withdrawals and transfers.
- You will still need a traditional bank account for most of your financial needs.