As a new business, you’ll want to find a bank account that can alleviate some of the admin so you can focus on getting your business off the ground. The good news is that there are business bank accounts created specifically for startups — many of which are free and come with perks and features.
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Revolut’s free business account could be appealing to startups that rely on sending and receiving international payments. It accepts payments worldwide and it’s possible to swap and hold a large range of currencies. Revolut lets account holders add an unlimited number of team members (unlike many business accounts that restrict access to 1 or 2 company directors). It also offers a wide range of features, such as creating and tracking invoices and linking to accounting software. There’s a lot to like about this account, but one of the downsides is that Revolut is an e-money provider, meaning your money isn’t protected by the Financial Services Compensation Scheme (FSCS) if it goes bust.
Pros
Flexible account options
Mobile app with lots of good features
Ability to issue cards to all employees
Easy to apply
Freeze card if lost or stolen
Safe and secure
Free purchases
Cons
Basic account does not include many free transactions
Get £150 cashback when you open a Tide business bank account using the code 150BOOST.
Tide’s simplest bank account is pay-as-you go, which could be a good option if you’re unsure about what features your business might use. You can hold up to 5 business accounts per device, so it could be worth considering if you’ve got multiple companies. Tide’s free account charges for bank transfers, which is a cost that might quickly add up. But the free account has many features that won’t cost you any extra, such as creating and tracking invoices, linking to accounting software, and matching receipts to transactions. For a fee, you can get expense cards for team members too.
Pros
24/7 customer support
Categorised spending
FCA regulated
Quick set-up
No monthly fees
Easy to manage accounts and track payments within the app
Ability to set up direct debits and standing orders
£5 per month (Fee waived if average balance of minimum £10000, and account maintained in credit, over the month).
Interest (AER)
0% AER
30 months’ fee-free monthly and transactional business banking for switchers.
TSB offers one simple bank account for sole traders and business owners, but new customers get their first 30 months free. The account comes with a free Square card reader, which could make the account appealing if your business relies on taking card payments. It’s also possible to deposit cash and cheques at TSB or Post Office branches. However, the account doesn’t offer some of the features that other business accounts do, such as setting money aside into pots and creating invoices.
Pros
Free everyday business banking for 30 months
Free Square Reader
Access to payments app
Advice service
Cons
Monthly service charge applies after 30 months
Fees apply to certain transactions
Minimum opening balance
£0.01
Minimum operating balance
£0
Switch service guarantee
Yes
Account fees
£5 per month (Fee waived if average balance of minimum £10000, and account maintained in credit, over the month).
Minimum opening balance
£0.01
Account fees
£5 per month (Fee waived if average balance of minimum £10000, and account maintained in credit, over the month).
No annual or monthly fee when you apply using the Finder link.
The Business Go account is designed with startups in mind. It doesn’t charge a monthly fee and offers credit options such as a cash advance and overdraft to help eligible customers with cash flow issues. Receive money, create invoices and integrate with accounting software without incurring fees. But if you send more than 3 payments each month, want to withdraw cash or need more than 1 card, you will be charged. While the bank doesn’t have its own branches, you can deposit cash into your account at any of the 11,500 Post Office branches around the UK.
Pros
Open an account in 5 minutes
"Cashplus iDraft" once eligible
Currency cards for travel
Online services in addition to the mobile app
Cons
Charge to have your bank card issued
Traditional bank still needed for majority of your business finance needs
Monzo Business Lite is the challenger bank’s free business bank account for companies that have one director. As Monzo is a fully regulated bank it’s able to offer overdrafts and loans to sole traders which can help with business cash flow (though this option isn’t available to limited companies). The Lite option misses out on lots of features that are common with other business bank accounts, such as creating invoices and integrating with accounting software. To get access to the full range you would need to upgrade to the Business Pro account and pay a monthly fee for the privilege.
Pros
Fee-free spending abroad.
Custom payment links.
Pots to separate money.
FSCS protected.
Cons
No branches.
Charge to deposit cash.
Accounting software only available with Pro account.
ANNA Money is designed for freelancers, small businesses and creatives. It’s offering new customers a 1 month free trial period, after which point you only have to pay for what you use. It also offers perks like cashback, multiple debit cards for coworkers, and you can give your accountant access to your sales and expenses. But the pay-as-you-go account doesn’t come with any free features — it charges for cash withdrawals, paying in cash, bank transfers and international payments. These costs could quickly add up so it might be worth comparing with other providers. Keep in mind, ANNA Money is an e-money provider, so your deposits are not protected by the Financial Services Compensation Scheme if the company goes bust.
Pros
24/7 support
Fast set-up
Invoice and expense services within the app
Ability to connect other provider accounts to the ANNA app through Open banking
Cons
No credit or overdrafts available
Still require a traditional bank account for majority of your business financial needs
Access to products and benefits on accounting software, insurance and more.
HSBC’s Kinetic is a business bank account that is suitable for sole traders or businesses with 1 director (the director must be the sole shareholder too). The account is free for the first 12 months and offers discounts to use accounting software Ember and TalkTalk business broadband. Overdrafts and credit cards are also available if you apply through the app, though international payments have to be made in a branch or by calling HSBC. While HSBC is a well-known high-street bank, it’s worth noting that the most recent survey conducted by the Competition and Markets Authority had HSBC business accounts at the bottom of the league table for customer satisfaction.
Pros
Easy to apply for and manage
Arranged overdraft
Useful app features to help you track spending
No monthly fee for 12 months
Cons
Interest is charged on overdraft
Monthly maintenance fee applies after first 12 months
Owned by NatWest, Mettle offers a business account that is entirely free and gives access to the accounting software Freeagent for free too. Create invoices in the app, mark them as paid, or get a notification so you know when to chase late payments. Another handy feature is that a percentage of your earnings can be automatically sent to pots to cover things like taxes. While a company with 2 directors can open a Mettle account, only 1 person can access it. So if you’ve got multiple business owners, you might need to look elsewhere. It also doesn’t offer 24-hour support and you can’t send or receive international payments, which might rule Mettle out for some businesses.
Some business bank accounts are designed for young companies in their first year of trading. They might offer features, such as free accounting software, invoice tools or programmes to help improve the way you run your business.
You might also find that some startup accounts have a free introductory period. However, once the promotional period ends, the account automatically converts to a normal business account. Once it converts, you might have to pay a monthly fee. You can compare business accounts with sign-up bonuses here.
Also, keep in mind that some banks don’t offer a dedicated account for startups and only offer one type of business account.
Does a startup need a business bank account?
While it’s not a legal requirement, it’s a good idea to have a separate business bank account, particularly if you are set up as a limited company.
A limited company is a separate legal entity from you, and the money belongs to your business, so you should have a separate bank account from your personal one.
This is mainly for accounting reasons, as your business transactions should be clearly shown. It’s much easier to be transparent about your business expenses if all the payments relate to your company rather than being muddled with your personal transactions.
You might find that many banks just won’t process company payments into a personal account anyway, so you may not have much choice other than using a business account.
If you are a sole trader, this might be less of an issue because your business is not legally separate from you. But it’s still a good idea to have different accounts for personal and business transactions.
Business bank accounts also tend to come with extra features that might be useful for your new company and can make you seem more credible. Learn more about this topic here.
How to choose a business account as a startup?
If you’ve never run a business before, it might be hard to imagine what you might need from a bank account, but it’s important to think about this carefully.
Here are some things to consider:
Customer support. If you’ve got a 24-hour business, you might want to look for a bank with round-the-clock support.
Invoicing. Some accounts make it easy to create invoices and mark them as paid or notify you when a company has missed the payment date.
Accounting software. Most business accounts let you link to accounting software, but some give you access to this for free.
Restrictions. Check your chosen bank’s requirements because it may have restrictions on things like the type of business or annual turnover, which might rule out some accounts.
Customer satisfaction. It’s also worth looking at reviews from existing customers to see if the bank’s service is up to scratch.
How to apply for a startup account (what documents you need)
The banks have different requirements to set up a startup bank account, but most need:
A form of ID, like a driving licence, passport or national ID card
Proof of your address
Your registered company number or name (if you’re a limited company)
Your unique tax reference number
Information about the nature of the business
The bank could likely ask for other documents, too, particularly if you’re opening a limited company account.
For example, you might need to provide details about the shareholders and directors of the company, who may also need to carry out an identity check.
Depending on the nature of your business, you might need to provide other documents, such as proof of:
Qualifications, registrations or licences
Property ownership
Membership to an industry body
The exact documents you need to provide might not be evident until you apply for an account.
Bottom line
Given that most startup bank accounts are free, you shouldn’t have to worry about bank fees.
They also typically come with features that suit a new business, so they are worth checking out. That’s not to say that you specifically need a startup business account. But as other business bank accounts may charge you fees, you’ll need to make sure they’re worth the extra cost.
It’s important to compare features and other perks of the various bank accounts, as they could make a difference to the future of your business. Check out our best business bank accounts guide.
Frequently asked questions
No, it’s not illegal to use a personal bank account for business.
But it is recommended that you have a separate account for personal and business transactions, even if you’re a sole trader.
There’s no simple answer to this, as it depends on your business and what you want from your account.
As a starting point, you might want to compare the best business bank accounts. Make sure you understand the fees and features.
You might also want to read our expert reviews, where we outline the pros and cons of the business bank accounts currently on the market.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
Katherine Denham is a freelance journalist, writer and consumer champion, specialising in personal finance. She has written for The Times since 2019. She also has bylines in The Sunday Times, Times Money Mentor, City A.M. and a number of financial trade publications. When she’s not working she can be found hiking and drawing pictures of her tortoise. See full bio
Katherine's expertise
Katherine has written 6 Finder guides across topics including:
By switching your business bank account, you may be able to reduce your monthly fees or take advantage of different features like smart bookkeeping tools.
Considering a Revolut Business account? We take a closer look at the features and price plans available with these digital-only accounts.
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