The world of ecommerce is booming and if you’re recently set up a business, you may be considering opening a business bank account. Let’s take a closer look at how they work and how to choose the best one.
Latest reviews of business accounts for running an ecommerce business
You can sign up for the free Tide business account in a matter of minutes. The account comes with a free business card that you can use for fee-free purchases in the UK and abroad (ATM withdrawal fees apply). You'll also be able to integrate your account with software such as Quickbooks, Xero and Sage. Further benefits include the ability to create and send invoices and set up scheduled payments. You can hold up to 5 business accounts and deposit cash into the accounts at any Post Office or PayPoint location.
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.
If you switch to this business account from TSB, you can enjoy 30 months of fee-free business banking. In other words, there will be no monthly fees or charges for paying money into or out of the account for two and a half years. It's easy to add a business debit card to your account and you'll be able to manage your account via the app 24/7. Cash and cheques can be paid into Post Office branches and TSB branches, plus you'll get 12 months' free access to Enterprise Nation for tailored advice from industry experts.
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).
Overseas cash withdrawals
conversion fee plus cash fee of
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).
If you're looking to keep business costs down, the great thing about the business bank account from Mettle is that it's completely free to use. It's also easy to apply for - you can do so via the app in just a matter of minutes. Mettle is part of the NatWest Group and there are lots of great benefits to take advantage of. For example, you can create and send invoices on the go, set up Money Pots so that you can save for things like tax and new equipment, as well as get an overview of your cash flow at any time so you can keep track of your spending and income. What's more, you can also sync the account with accounting software such as FreeAgent, QuickBooks and Xero. Note that you must be a UK-based company and a UK resident to apply for this account.
12 months’ fee-free monthly and transactional business banking, available for individuals setting up their first business bank account within the first 12 months of trading.
If you're relatively new to the world of ecommerce and have been trading for less than 12 months, you can apply for the Barclays business account which offers expert support to help your business grow. There are no business banking fees for the first 12 months, after which point you can choose from 2 different pricing plans depending on how you usually make and receive payments. Barclays will review this each year to make sure you're on the best plan. You'll also have access to free invoice and account software from FreshBooks, a UK-based team of business managers, as well as specialist business advice.
Pros
No business banking fees for the first 12 months
Includes access to invoice and account software with FreshBooks
This digital-only bank account from Starling can be applied for with ease via the app. There's no monthly fee for the account but it still offers a whole range of useful benefits for your business. For example, you'll be able to integrate your account with QuickBooks, FreeAgent and Xero, benefit from automated business spending categorisation and receipt capture, and make international payments. Spending on your bank card and withdrawing cash abroad is also free of charge. Accounts can also be customised with add-ons, provided you're happy to pay a monthly fee. This includes the Business Toolkit which helps you create and send invoices, calculate tax, record your VAT and submit your VAT return, a Euro business account for exchanging and holding euros, and a US dollar business account for holding, sending and receiving US dollars.
Pros
Add the new Business Toolkit onto your free Starling account and get the first month free of charge (RRP £7pcm)
Completely free UK current account opened and ready to use in 20 minutes
Safe and secure
Fully licensed by the FCA and PRA
Free to use your card abroad including ATM withdrawals, splitting the bill made easy with "settle up" feature, competitive and comprehensible overdraft fees
Decent interest rate paid on current account balances
Efficient app offering a range of good features such as budgeting tools and saving features
Has a marketplace offering competitive pensions
Mortgages and insurance from other growing fintech companies
Teen account options
24/7 customer support (for all types of enquiries)
Cons
Relatively new so does not offer every feature, e.g. mortgages
No annual or monthly fee when you apply using the Finder link.
If you're looking for a low-cost business account, take a look at what Zempler has to offer. There are no monthly account fees and no fees for UK purchase transactions either. Signing up for the account can be completed online in a matter of minutes. Through the account, you'll be able to track expenses and block certain transactions, order up to 20 additional cards, download statements for each card in CSV format online, manage cards via a centralised management system, and integrate your account with accounting software. You'll also be able to deposit cash via bank transfer or the Post Office, use your card online and instore or to withdraw cash, pay bills and expenses online and categorise spending on the go via the app. Money held in your account will be protected up to £85,000 by the Financial Services Compensation Scheme.
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
Earn 10% cashback on your first $1,000 of international transactions with Airwallex (T&Cs apply).
This bank account enables businesses to collect, hold and send money in multiple currencies. There are no monthly fees and accounts can be opened in a matter of minutes. Users will be able to transfer funds in more than 34 currencies into over 130 countries at competitive exchange rates. What’s more, you’ll be able to create virtual employee and expense cards for your business which will enable you to track spending and set spend limits. You can also use your multi-currency debit card to pay for expenses online or in person in different currencies with no transaction fees, provided you have the right currencies in your account. Further benefits include the option to connect your currency accounts with platforms like eBay, Shopify and PayPal, and the ability to sync your account with Xero to ensure your Xero transaction records are up to date for your accountant or bookkeeper.
Pros
Send to 120+ countries
Competitive FX rates
No monthly account fees
Collect, hold & send money in several currencies
No transaction fees for card payments
Cons
Not covered by the Financial Services Compensation Scheme
Transfers can only be made to your Airwallex wallet or to a business bank account
Do you need a business bank account to run an ecommerce business?
You won’t necessarily have to open a business bank account to run an ecommerce business. However, this will depend on whether you’ve set up your business as a limited company or whether you’re currently a sole trader.
If your business is a limited company in the UK and you’ve registered it with Companies House, you will be legally required to open a business bank account as your business is a separate legal entity from you as an individual.
On the other hand, if like many businesses in the UK, you are a sole trader, your business is not legally separate from you and there is no obligation to open a business bank account. However, it can still be worth opening one as you’ll be able to clearly see the divide between your own income and expenditure, and your business.
You should also note that some banks may specify that personal current accounts are used for personal reasons only. They may threaten to close your personal account if they spot a large number of business-related transactions.
Benefits of an online bank account for ecommerce purposes
When comparing business bank accounts for ecommerce purposes, you’ll come across traditional high street bank options that will allow you to carry out some of your transactions in branch, as well as online only accounts.
Choosing a business bank account that can be opened and managed online has a number of benefits. For a start, these accounts are designed to incur fewer overhead costs and those savings are often passed on to the customer. This means online accounts tend to have lower service and maintenance costs, they may pay higher rates of interest and transactions generally clear faster than they do with a high street bank.
Most online banks also offer an app, allowing you to manage your account on the go and get notified when money is paid in or out of your account. Many will also include budgeting tools and integrate with accounting software to help you keep on top of your invoices and tax returns.
If your business also trades abroad, some online accounts will offer low-fee foreign transactions and let you hold money in different currencies.
What should you look out for when choosing a business bank account?
When comparing business bank accounts, you’ll need to keep the following in mind:
Is there a monthly account fee?
Are there transaction fees (for example, for transfers in and out, and direct debits)?
Does the account have an overdraft and, if so, how much will you be charged?
How can the account be opened and managed?
Does the account offer additional tools and support, such as budgeting, accounting and invoicing?
Will you be charged for using your debit card?
Some business bank accounts won’t charge a monthly maintenance fee for the first year or so, but fees will kick in after that. Having fees waived for the first year may be helpful if your business is just starting out.
What you should look for when selling internationally?
If you trade internationally, it’s important to compare business bank accounts to see how much you’ll be charged each time you carry out a foreign transaction. You’ll need to consider what exchange rate you’ll be charged, as well as additional fees for sending or receiving money internationally.
Many digital only accounts will let you carry out a set number of foreign transactions per month either free of charge or for a small fee. Make sure you compare these costs carefully.
Depending on where you sell, you may also need to hold different currencies in your business account. Some digital banks will offer accounts in euros and/or dollars, while others will offer a multi-currency account that will let you transact in several currencies from the one account.
If you’re a business owner, having a separate bank account is crucial (and required for limited companies). Millions of people have set up businesses over the last few years, from online bakeries to photography courses, and whether it’s a side hustle or a full-time job, it’s a lot easier to manage your finances if you have a bank account set up specifically for your business. Keep an eye on the small print though. While the account may be free there could be charges for things like, overseas money transfers, cash deposits, or extra debit cards.”
Pros and cons of a business bank account for ecommerce
Pros
Allows you to better manage your business finances and keep them separate from your own.
Can help you build a credit rating for your ecommerce business.
A dedicated business bank account can make your business seem more professional to clients.
Some accounts offer low-cost foreign transactions.
Cons
Many business accounts charge a monthly fee.
Fees often apply to transactions – though you may have a free monthly allowance.
You’ll have 2 accounts to manage – a personal account and a business one.
Bottom line
Opening a business bank account for ecommerce purposes has a number of benefits, but primarily it can make juggling your business expenditure with your own that much easier. This will also be beneficial when you come to do your tax return.
When deciding which business bank account is best for your ecommerce business, you’ll need to consider how you plan to run the account and what you need from it. For example, if your business is a startup, your priority may be to keep costs as low as possible – in which case, you’ll need an account that offers decent transaction limits and a low monthly fee.
Frequently asked questions
If you choose a traditional high street bank, you can usually open your business account online, in branch or over the phone. If you choose a digital only bank, you will only be able to open the account online or via the app – this is usually a much quicker process. You'll usually be asked to provide ID and proof of address, as well as details about your ecommerce business.
If you have poor credit, you may find it harder to open a business bank account and your choices will be more limited. However, some digital only banks won't require a credit check as part of your application, so may be suitable if your credit score is low. Just bear in mind these accounts won't offer an overdraft. You can compare business accounts for bad credit here.
This will depend on the type of bank account you choose. If your money is held with a UK-authorised bank or building society, the first £85,000 per person will be protected under the FSCS.
However, many digital only providers do not offer FSCS protection. Instead, your money will be protected through safeguarding rules under the Electronic Money Regulations 2011.
Banking scores
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Finder scores, in blue, are based on our expert analysis. We also show reviews from users, where we've received more than 10, with a score in yellow. We gather more reviews from customers every year in Finder's customer satisfaction survey.
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.
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To make sure you get accurate and helpful information, this guide has been reviewed by Rebecca Goodman, a member of Finder's Editorial Review Board.
Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio
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