Free business bank accounts
Looking for a free business bank account in the UK? We discuss what’s on offer and whether this could be the right option for you.
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Free business bank account providers
What's in this guide?
- Free business bank account providers
- Do free business bank accounts exist?
- How do free business accounts make money - is there a catch?
- Which banks offer free business accounts?
- Pros and cons of a free business bank account
- Is it worth paying for a business bank account?
- Compare business bank accounts
Do free business bank accounts exist?
The good news is that yes, free business bank accounts do exist (if you’re talking about monthly charges anyway).
Unlike for most personal current accounts, it’s the industry norm to be charged for a business bank account in the UK. That might come in the form of a monthly or yearly fee, or a charge for carrying out certain transactions. Or both.
But since the new wave of digital challenger banks and other fintech providers hit the UK market (and the incumbents responded to them), it’s now possible to open a business bank account that doesn’t come with a fee simply for having it.
But be aware that these accounts often aren’t totally free – there’s usually some small charges to make certain banking transactions, such as paying in cash, setting up electronic payments, making ATM withdrawals or carrying out international transfers.
How do free business accounts make money – is there a catch?
As mentioned above, there are often small charges for each transaction (which could add up if you make a lot), or a usage limit for the amount of free banking you actually get with a free business account.
One of the other ways that banks aim to make money from offering a free account is by using them to gain some valuable brand loyalty from their business customers, who can then be offered products like business loans and overdrafts, which can generate valuable revenue for the banking provider.
You also might be offered advanced paid-for services to “add on” to the free (and sometimes basic) features of a business account. Or banks might attract customers with the offer of a trial for a free business account, which then converts to a paying account further down the line.
Which banks offer free business accounts?
There’s a whole raft of different business accounts out there for you to choose from now, from the more traditional high street banks to the latest digital-only banking banks.
It’s important that you consider all of the features and fees on offer from these providers, so you find the right account for your own business needs.
However, if the “free” element of a business bank account is the biggest draw for you, here are some options (with a link to their full reviews):
- No monthly fees or UK transfer/ATM fees.
- Set up and managed digitally through a mobile app and web browser.
- Can deposit cash and cheques.
- Offers integration with accounting software.
- No monthly fees (though some small transaction fees do apply).
- Set up and managed through a mobile app.
- Categorised spending and instant payment notifications.
- Able to connect to accounting software.
- Offers the first 25 months of business banking for free.
- Comes with a Square Reader to take customer payments on-the-go.
- Can use mobile, internet, telephone or branch banking.
- Has high street branches and other business support networks available.
Pros and cons of a free business bank account
- It’s free!
- It’s a good way for a sole trader to keep their personal and business finances separate.
- A business account is a requirement for limited companies using banking services, so you may as well get a free one if you don’t think you’ll use it much.
- Some accounts offer helpful features such as expense and tax reporting tools, or integrations with accounting software.
- There’s often the option to add on paid-for account features if you need them.
- Once you’re with a banking provider, you might be able to access an overdraft or business loan from them.
- Still likely to be some small transaction fees to pay.
- The free account features on offer may not be advanced enough for your needs.
- If you take up an initial free trial, you’ll have to decide whether to keep the account and pay for it at some point.
- Many of the free accounts are digital-only, so you can’t visit a branch to speak to an advisor in person if you need to.
- Some of the smaller account providers don’t have FSCS protection.
Is it worth paying for a business bank account?
If you need an account with more advanced digital features then you may have to update to a premium business account or pay for some extra monthly services.
Likewise, if you’re going to be doing a serious amount of international banking, it might be worth paying for an account which accommodates this.
And if you’re after a branch network, then most of the high street banks charge monthly fees for their business accounts (even if they come with a free trial initially).
That said, if you’re happy to manage your business finances digitally, and if the free account you like the look of only comes with basic features, it could still be a great option if your business is just starting out. If you want to upgrade at a later date then you often have the option to do so.
Compare business bank accounts
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