Free business bank accounts can be particularly beneficial if your business is just starting out. Here’s how they work.
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Opening a business bank account can help to keep your business and personal finances separate. Plus, you might benefit from perks such as cashback and accounting tools. Even better, these accounts won't charge a monthly or annual fee.
Comes with a suite of free accounting software to integrate with
You can apply for the Mettle business account in minutes and it’s completely free to use. Mettle is part of the NatWest Group and there are lots of great benefits to take advantage of. The account lets you create and send invoices on the go, set up “Regular Pots” so that you can save for things like tax and business expenses, and access “Savings Pots” that pay interest. In addition, you’ll get accounting software FreeAgent included with your account, or you can choose to sync your account with other accounting software like Quickbooks and Xero. You’ll also be able to upload receipts to your transactions and manage bookkeeping tasks with ease.
Quick and easy application process
Option to freeze your card if you loose it
Free and includes some useful features
Owned by the Natwest group whom are very credible
Sleek easy to use app
Overdrafts are unavailable
Daily payment limit of £10,000
Account fee
£0
UK ATM Charge
Free
Account software integration platforms
FreeAgent Xero
UK transfer charge
£0
Credit check
Soft search with no impact on credit score
The Co-operative Bank - The Co-operative Bank Business Current Account
Free everyday digital business banking with the original ethical bank, plus access to the free ‘Go Get Paid’ app from BankiFi to help you get paid faster, rated 4.9 stars.
There’s no monthly service fee with this business account from Co-op and there are no fees for digital transactions either. Further benefits of the account include the ability to integrate with accounting software such as Xero, Sage or Quickbooks, free support tools such as webinars, and access to a free payment request app, Go Get Paid, to help you get paid on time. You’ll also have access to specialist business advisors on the phone and you can bank online, in branch, or over the phone. It’s possible to apply for an arranged overdraft on the account during the application process too.
Free everyday business banking for 30 months
Access to a payment app, as well as additional support services
Multiple ways to bank
Monthly service charge applies after 30 months
Only suitable for sole traders or single directors
With the HSBC Kinetic business account, there’s no monthly fee for the first 12 months, but you’ll pay £6.50 per month after this. You can apply for the account via the app and most accounts are up and running within 48 hours. You’ll also be able to apply for an overdraft of up to £30,000 if you wish, with funds available on the same business day that your credit assessment is successful. The account offers a range of perks, including discounts on business broadband and discounted accounting software from Ember. Plus you’ll get access to cashflow and spending insights via the app.
Easy to apply for and manage
Arranged overdraft
Useful app features to help you track spending
No monthly fee for 12 months
Interest is charged on overdraft
Monthly maintenance fee applies after first 12 months
Unlock 1 month of a paid plan without subscription
The Basic business plan from Revolut has no monthly fee and lets you hold and exchange funds in more than 25 currencies. You can carry out fee-free foreign currency exchanges up to £1,000 a month, but a fee applies if you exceed this limit or exchange outside foreign exchange market hours. Further benefits include the option to connect to accounting software such as Xero, QuickBooks and Sage, and the ability to create and track invoices. It’s quick and easy to sign up for an account via the Revolut app. You can also apply for up to 3 physical cards for your team members as well as set up virtual cards.
Physical and virtual cards
Spending controls
Automated expenses
Competitive exchange rates on multiple currencies
Easy and quick to apply and set up
The free account doesn’t include many free transactions
The free business bank account from Tide has no monthly fees and can be opened quickly and easily online. The account lets you create, send and track invoices from the Tide app, plus you can connect your accounting software and bank account for easy reporting. You’ll also be able to upload receipts to manage expenses, export your transactions in multiple formats or share with your accountant, and get automated forecasts of incomings and outgoings to help you predict cash flow. It’s also possible to send payment links in seconds for online card transactions as well as set up Apple and Google Pay.
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
Can receive online bank statements
No branches - all done via the web
Doesn't accept cheque deposits
No personal accounts
No international
Transfers or interest offered
Account fee
£0
UK ATM Charge
£1
Account software integration platforms
Clear Books FreeAgent KashFlow QuickBooks Reckon One Sage Xero
UK transfer charge
£0.20
Additional cards
35 additional cards
Additional card fee
Free
Credit check
No - Tide performs an electronic check but no credit check
Earn 1% cashback for paying with your ANNA card in selected categories.
There’s no monthly fee with this business account from ANNA Money, but you pay for what you use. That means each transaction, such as local transfers in and out of your account, ATM withdrawals and international payments incur a fee. But this could be a good option for businesses that don’t carry out a huge number of everyday banking transactions. One debit card is included with the account, but others will incur a £3 charge. You can create and send invoices with this account, manage your expenses, set up payment links and give your accountant real time access to your sales and expenses.
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
No credit or overdrafts available
Still require a traditional bank account for majority of your business financial needs
No cash and cheque deposits
Cannot be used in web browser
Account fee
N/A
Bank transfers
N/A
Accounting integrations
Clear Books FreeAgent QuickBooks Sage Xero
Requires credit check
N/A
Overdraft
N/A
What is a free business bank account?
A free business bank account is simply one that doesn’t charge a monthly or annual fee, and there are no fees for opening the account either. This can be ideal if your business is new and needs to keep overheads low or if you only need to carry out a few transactions each month. However, the remaining account features depend on the provider, so you’ll need to compare them carefully.
Sole traders and freelancers are not legally obliged to open a business bank account as their business isn’t legally separate from them. But if you’re a limited company, you need to open a business bank account. This is because you’ve registered your business with Companies House, which means it’s a separate entity to you legally and financially.
Do free business bank accounts really exist?
A number of business bank accounts don’t charge a monthly or annual fee. But some of these might only offer this for a limited time, say, 12 months. Even if your bank account never charges a monthly or annual fee, you might still have to pay for certain banking transactions.
For example, some business bank accounts might allow you to make a certain number of free bank transfers or payments each month but charge a fee if you exceed this limit. Others might let you carry out certain transactions for free, say UK transfers, but will charge a fee for others. And others still might charge for all banking transactions on a pay-as-you-go basis.
What is the difference between free and paid-for business accounts?
The key difference between free and paid-for business accounts is that free accounts don’t charge a monthly or annual fee.
How they differ beyond this depends on the provider. You might find free business accounts don’t offer as many perks as paid-for accounts. For example, you might not benefit from features such as invoicing tools or integrated accounting, or you might not earn cashback on your purchases.
Other free business bank accounts might offer the same features as paid-for options but could charge more for everyday banking transactions or have stricter monthly limits. This could suit smaller businesses that only carry out a handful of business banking transactions each month. But a larger business that carries out high volumes of business transactions will likely be better off with an account that charges a monthly fee but offers unlimited free banking transactions in return.
How to open a free business bank account
Many free business bank accounts can be opened online. You’ll usually need to fill in an online form, providing a few personal details and some information about your business. Alternatively, you might be able to open the account through the provider’s app, in a branch (if your provider has one) or over the phone.
You usually need to provide your business’ registered address and contact details, and if you’re a limited company, you’ll need to provide details of your company’s registration at Companies House. You’ll also need to provide proof of address and proof of ID for all company directors.
How to choose the best free business bank account
When comparing business bank accounts, you should think about the features most likely to benefit your business, as well as the features you can do without. Consider the below to help you with this:
What are the fees for everyday banking transactions? Consider the types of transactions you’re most likely to carry out, whether bank transfers, cash payments or cash withdrawals, and look for the account with the lowest fees.
Do you need to carry out international transactions? If so, you’ll want an account that allows you to do this, ideally for a low or no fee.
Do you need accounting integration and invoicing tools? If you do, look for a free account that offers these features.
Do you need an overdraft? Some business bank accounts let you request an overdraft when you apply, while others won’t offer an overdraft.
Is there FSCS protection? If the provider has a UK banking licence, your money will be protected up to £85,000 under the Financial Services Compensation Scheme.
Do you qualify? Some free business bank accounts require you to have been trading for a set time and might have a maximum annual turnover requirement.
How is the account managed? Check whether you can bank online, via an app, over the phone or in branch.
Bottom line
Free business bank accounts can be particularly beneficial for small businesses just getting off the ground. However, many free accounts come with other charges or limited benefits, so you’ll need to consider exactly what you want from your business bank account to be sure of choosing the right one for your business.
Frequently asked questions
If you’re applying for a business bank account online or via the provider’s app, this can often be done in a matter of minutes. You’ll need to wait to be approved, but some digital bank accounts can be up and running on the same day.
If you’re applying for a business bank account with a high street bank, the process will likely take longer and could be between 1 and 4 weeks.
If you’re a sole trader, it’s possible to use your personal bank account for business transactions, as long as your provider permits this. But if you’re a limited company or limited partnership, you’ll need to open a separate business bank account, as your business is a separate legal entity.
Yes, some providers will let you open a business bank account with a business partner, but you’ll need to check first.
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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
Challenger Countingup draws accounting and business banking together in one account. Our review looks at how it works and what it costs.
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