How to open an instant business bank account

Say goodbye to stacks of paperwork and long wait times. Instead, discover how to get a business bank account up and running in a matter of minutes.

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By

Katherine Denham

Edited by

Holly Jennings

Updated

Gone are the days when you would have to book an appointment at your local bank branch, provide a stack of paperwork and wait for weeks for your business bank account to be approved.

Most banks now let you apply for a business account entirely online. You might even have your account up and running in a matter of minutes.

What is an instant business account?

An instant bank account is one that can be opened quickly, though the process is unlikely to be immediate.

While the application form might only take a few minutes to fill in, you then have to wait for the bank to approve your application. How long this process takes depends on the bank and your business.

Many high-street banks might take a week or more to open a business account, but some smaller banks and e-money providers take less than a day.

Can I open a business bank account in one day?

Yes, it is possible to open an account in a day. But it depends on the bank’s processes and what information you need to provide about your business.

If it’s a busy period, like the end of the tax year, it may take longer for a bank to review your application.

It also depends on whether anything is missing from your provided information. If the bank has to get in touch to ask for more details, this could slow things down.

Bear in mind that if your business has a complex ownership structure, that could also increase the time it takes to open an account.

Which type of banks and e-money providers provide these accounts?

Usually, the newer challenger banks make it quick and easy to open a business bank account.

For example, most Starling or Monzo customers have been able to open an account in less than a day. Mettle, a bank owned by NatWest, aims to review applications within a matter of days.

While they are not banks, some e-money providers like Revolut and Tide let you open a business account quickly, too. For example, Revolut reviews most applications in a couple of hours, and so does Tide.

Many of the best business bank accounts let customers open accounts quickly.

What’s the difference between an e-money account and a bank account?

Banks are allowed to use customers’ deposits to lend and earn interest. They also have to abide by strict requirements to make sure they have enough available cash if a customer suddenly wants to withdraw their money.

However, e-money providers aren’t allowed to lend customers money, so they might segregate deposits into a special account. Compared to banks, the regulations around e-money providers are less restrictive, and their cash reserves don’t have to be as high.

This can have advantages for customers. For example, e-money providers are often more flexible and might be able to process an application quicker than a bank would.

Are business accounts from e-money providers safe?

Unlike deposits held with banks, money held with e-money providers won’t be protected by the Financial Services Compensation Scheme (FSCS).

This means that if the e-money provider goes bust, you won’t automatically be reimbursed under the FSCS. Instead, you might have to wait while the business goes through insolvency, which can be long-winded.

But that’s not to say that e-money providers aren’t safe. They are regulated by the Financial Conduct Authority, which means they have to abide by rules and regulations.

With that said, some e-money providers hold money with other companies that are regulated banks, which means that your deposit would be covered under the FSCS. For example, Tide is a financial technology company, but its deposits are held by ClearBank.

It’s always good to check where your money is being held and what protection you are entitled to if the business runs into trouble.

What documents do I need to set up a business account online?

This varies between banks, but generally speaking, you need to provide this information:

  • Details about the nature of your business
  • Proof of your business address
  • Your registered company number or name (if you’re a limited company)
  • Your unique tax reference number
  • Some form of ID, like a passport, driving licence or national ID card

Some banks might ask for information about what the business does and how you intend to use the account.

Depending on your business sector, the bank might ask for details about things like qualifications or registrations.

If your company has shareholders and directors, the bank might want to carry out an identity check on them too.

Bottom line

Speed isn’t everything when it comes to choosing a bank account, so make sure you compare the other features that the banks offer.

While some more established banks can take a week or longer to set you up with a business account, it might be worth the wait if they offer extra support.

But, of course, if you’re in a hurry to open an account, the banks and e-money providers mentioned above might be worth considering. To start comparing, head to our best business bank accounts guide.

Frequently asked questions

  1. https://www.fscs.org.uk/news/protection/e-money-and-fscs-protection/
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