13 Best Business Bank Accounts For Startups: Expert Picks

By Stephen Carter


Reviewed by: Stephen Carter


Best Business Accounts For Startups

It takes immense confidence to stray into the world of startups. You should have the best financial services to aid you in making your business renowned. The best tip any successful businessman would tell you is to separate your personal and business finances.

That way, you can easily manage your business and keep track of your expenses. A startup business account is the best way to grow your business and increase its credit limits. It also offers rewards and offers, streamlining the cash flow, and online banking facilities.

This article introduces you to the best startup business bank accounts that offer novel features and efficient fund management systems. If you are a small business owner or a sole trader who dreams of branching into the world of entrepreneurship, you will be intimidated by the various terms and conditions regarding business bank accounts. This article will also simplify the process of business account opening so that you can do it on your own. 

What Is A Startup Business Bank Account?

A startup business bank account is similar to a personal bank account except that it is specifically designed for entrepreneurs or new business owners to manage their business expenses. Just like a normal bank account, you can make deposits, and withdrawals, request a debit card, and manage it using the bank’s portal or mobile app.

However, business bank accounts require a monthly fee and have transaction costs. They also provide financial tools and overdraft options to support new businesses in their initial stage. You can open a startup business account with high-profile banks or online account providers from the bank in person or online. 

Best Startup Business Bank Accounts

Tide Startup Bank Account
  1. Tide Business Account
  • Available for sole traders, freelancers, small business owners, and limited companies registered in the UK.
  • Open a business account for free.
  • Manage the account 24/7 through the bank’s mobile app.
  • Open an instant access business savings account with 4.33% AER. 
  • Get paid accounts with additional perks starting at £9.99 up to £49.99. 
  • Integrate with accounting software like QuickBooks, Xero, Sage, etc. 
  • Effortlessly upload receipts and match them to transactions.
  • Easily generate invoices for transactions. 
  • Eligible deposits under £85,000 are covered under the UK’s FSCS. 
ANNA Money Startup Bank Account
  1. Anna Money Business Accounts
  • Open a free business account using simple, fast, and straightforward steps.
  • Suitable for new and established businesses.
  • Paid accounts with free transaction allowances are available for £14.90 to £49.90.
  • Up to 1% cashback on all card purchases.
  • An additional charge of 20p for local transfers and £1 for ATM withdrawals. 
  • Integration with invoicing and accounting software.
  • Manage accounts using the bank’s mobile app.
  • Free accounting and expense managing tools to help with the admin side of starting a business. 
  • FSCS protects 100% of the first £85,000 deposited.
Cashplus Startup Bank Account
  1. Cashplus Bank Bank Accounts
  • Suitable for startups, new businesses, and medium businesses. 
  • Register a limited company for free and open a business account. 
  • No credit score requirement for startups and new businesses.
  • Business credit cards, expense cards, and overdrafts are available if the business fulfills the criteria set by the bank.
  • Preset free transfer limits. After the limit, you will have to pay 30p per payment.
  • Paid accounts with 0.5% cashback on all spending, starting at £9 per month. 
  • Integrate leading accounting software such as Xero, Sage, and QuickBooks to better manage expenses.
  • Manage the account and access the funds using the bank’s mobile app or website.
  • Deposits up to £85,000 are insured under the UK’s FSCS.
The Co-operative Bank Directplus Account
  1. The Co-operative Bank Directplus Account
  • Register a business and open a free business account.
  • Business current and savings account available.
  • New businesses get a 30-month, no-fee banking account if a balance above £1,000 is maintained.
  • Use the business account with a fee of £7 per month once the 30-month period is over.
  • Credit cards and savings tools are offered. 
  • Manage the business account 24/7 online.
  • There are over 50 branches across England, Scotland, and Wales. 
  • A bank with heritage and many community values operating for more than half a decade.
  • Eligible deposits of up to £85,000 are protected under FSCS.
Revolut Business Basic
  1. Revolut Business Basic
  • Sole traders and start-ups are eligible for business accounts.
  • There are no monthly fees to maintain the business accounts.
  • Integrate accounting software like Xero and QuickBooks.
  • Efficient invoice management.
  • Multi-currency accounts that can hold up to 28 different currencies.
  • Five free local payments per month. 20p per transaction after exceeding the limit.
  • There is no fee for transferring money to other Revolut accounts. 
  • Manage your account online using the mobile app.
  • 24/7 customer support through email, phone, or live chat.
  • FCA does not recognize Revolut and is not under FSCS protection. 
Monzo Business Bank Accounts
  1. Monzo Business Bank Accounts
  • Best suited for startups with a single director.
  • There is no charge for UK bank transfers. 
  • Integrated tax and 1.60% AER savings accounts are available.
  • Uses AI for smart receipt capture from SMS, emails, and notifications.
  • Instant access business saving accounts that earn 1.60% AER are also available. 
  • Get paid accounts for £5 a month for startups with multiple directors. 
  • Online and mobile banking service to manage accounts.
  • 24/7 customer support for UK customers.
  • The bank is registered in the UK and eligible for FSCS.
Virgin Money Account for Business
  1. Virgin Money Account for Business
  • Startups with an annual turnover of less than £1 million are eligible for starting business accounts.
  • No fixed monthly account fees. 
  • Only pay for the services used. 
  • Credit cards, £1,000 overdraft, and other savings solutions are offered.
  • Get 0.35% cashback on eligible card payments.
  • 24/7 account management via mobile app.
  • Excellent customer support.
  • More than 130 brick-and-mortar branches in the UK.
  • Earn benefits from FSCS up to £85,000.
  1. Counting Up Business Accounts
  • Low-cost business accounts for start-ups and sole traders.
  • The monthly fees for business accounts start from £3 up to £10 per month.
  • The maximum balance limit for freelancers is £50,000.
  • The maximum balance limit for limited companies is £120,000.
  • After the trial period ends, a transfer fee of 30p and withdrawal cost of £1 is levied.
  • Integration of accounting and invoicing tools with the business accounts.
  • Uses AI to capture receipts and automatically match them with expenses.
  • Manage the account online 24/7 using the mobile app.
  • Deposits in the bank are not covered by the FSCS.
HSBC Kinetic Current Account
  1. HSBC Kinetic Current Account
  • Suitable for startups with only one director.
  • New businesses registering for an account receive 12 months of free banking.
  • After 12 months, a monthly fee of £6.50 is levied on the business account. 
  • Business credit cards and overdrafts are also available. 
  • Also, get a business savings account while opening a current account. 
  • Use the bank’s mobile app to manage and move funds 24/7.
  • Best-in-class customer support over the phone and through email.
  • HSBC is a business partner with many leading global brands and provides great offers.
  • FCA-recognized bank, eligible under the FSCS. 
NatWest Start-up Business Account
  1. NatWest Start-up Business Account
  • New businesses and start-ups with less than £1 million turnover are eligible for the business accounts.
  • Free banking services and no monthly fees for the first 24 months after opening an account.
  • After 24 months, there are no monthly fees, only pay for the services used.
  • Get loans, business credit cards, business savings solutions, and overdrafts.
  • Get free access to FreeAgent digital accounting software.
  • Access and manage the business accounts using the mobile app.
  • A large number of branches in England and adjacent countries. 
  • Friendly and polite customer support. 
  • Eligible deposits of up to £85,000 are covered under FSCS.
Lloyds Bank Small Business Account
  1. Lloyds Bank Small Business Account
  • New businesses with a turnover of less than £3 million are eligible to apply for business accounts.
  • 12 months of free banking service are available for startups and new businesses.
  • Post the 12 months, a fee of £7 per month is charged for account management.
  • Credit cards, overdrafts, and other financial products are offered.
  • Get a 3 months free trial of Business Finance Assisting Accounting.
  • Manage the account using Lloyds Bank’s mobile app or through their web portal.
  • Highly responsive customer support for UK customers. 
  • Lloyds is one of the most famous and largest banks in the UK.
  • Eligible deposits of up to £85,000 in the Lloyds Bank are protected under FSCS.
Airwallex Business Account
  1. Airwallex Business Account
  • New businesses and startups can open multi-currency business accounts.
  • No monthly fees or initial deposit requirements to open an account.
  • Built-in free expenditure management system.
  • Offers business credit cards along with additional employee cards.
  • Get offers from e-commerce platforms like Amazon, Shopify, and WooCommerce.
  • Integrates with accounting tools such as Xero.
  • Lightning-fast transactions of funds to 150+ countries.
  • Open multi-currency accounts with local bank details in 23+ countries in 60+ countries.
  • Deposits are not protected under FSCS.
Starling Bank Business Current Account
  1. Starling Bank Business Current Account
  • New businesses and startups are eligible for business current accounts.
  • No monthly fees for business accounts.
  • No transaction fee for withdrawals and deposits.
  • Credit cards and overdrafts are available. 
  • All card purchases are free of additional charge. 
  • Integrates with accounting software such as Xero and QuickBooks.
  • Access and manage the account using the mobile app.
  • 24/7 customer support for UK customers.
  • Eligible deposits of up to £85,000 are protected under FSCS.

Do Startups Need A Business Bank Account?

No law in the UK states that startups must have a business bank account for running a business. However, if you are using a personal bank account for managing business expenses, you might run into some troubles.

They may not be legal troubles, but they can increase your efforts in managing the business finances, which can be done with a click if you own a separate business account. Here are a few reasons why you should open a business account for your startup:

business bank account for Startups

1. Efficient Management of Expenses:

If you run a business using personal bank accounts, your expenses will be all over the place, and balancing your income and expenses will be a very difficult task. If you have a business account that links with accounting software, you can save time and effort in trying to manage your expenditures.

Most business bank accounts in the UK provide a free trial or unlimited access to popular accounting and invoice management software. Several bank accounts now use AI to grab invoices from emails and notifications. 

2. Easy Tax Calculation:

Most sole traders and business owners put in tremendous effort in filing their tax returns. Opening a business bank account will ease the bookkeeping process. Many banks offer precalculated tax returns based on income and expenses transacted through the business bank account.

A business bank account can also help you by separating your personal and business finances. Your tax should not be intertwined with the business taxes as tax can be waived from many business purchases.

3. Credit Score:

A business account can help entrepreneurs and new business owners build their credit scores. Unlike a personal bank account, business bank accounts and business credit cards can help businesses to access finance opportunities.

Having a good credit score can help startups get good loan amounts with lower interest rates and other overdraft facilities. Paying credit and overdrafts regularly can also help businesses earn good credit scores. This credit rating will also enable better tax deductions for certain businesses based in the UK.

4. Requirement by Law:

No laws in the UK that state that sole traders need a business bank account to run a business. Large businesses may need to have a business current account and business savings account for an easy bookkeeping process.

You can use your personal bank account to run a business. However, certain banks do not allow their customers to use personal accounts for managing their businesses. You need to read the terms of the bank before you open an account for business purposes. 

Business Account For Sole Traders

A sole trader is an umbrella term for freelancers, contractors, or self-employed professionals. They operate based on their schedule and timings. A sole trader may or may not own an office or register their service as a business in the UK.

Sole traders can use personal bank accounts for business expenses and receive payments for the services provided The laws in the UK do not state that sole traders are required to open a business bank account. However, to keep personal and business finances separate, sole traders should open a business bank account. 

All the banks listed above provide business bank accounts for sole traders and it helps them efficiently manage their expenses and easily calculate their tax returns. Business accounts provide overdraft and credit facilities.

This helps sole traders build better credit scores, which will enable them to get loans for expanding their business. Having a business account will ease the process of acquiring a business credit card for sole traders and also get additional employee cards if you plan on expanding the business. 

Having separate business and personal accounts will be helpful if you face any internal or external auditing. This keeps your business and personal expenses separate and helps your accountant identify your expenses. Many business bank accounts also provide access to invoicing and receipt management software that helps you better manage your finances. 

Business Accounts For Limited Company

If you have a limited company registered in the UK or a limited liability partnership (LLP) firm, you should have a separate business account for managing your business income and expenses.

However, there are no laws that state you need to have a business savings account. But your business must have a current account when the income should go into and salary and expenses should be paid out.

Even if you are the sole owner or the only employee it is required by law for a limited company to have a business current account. This helps to keep your business and personal finances separate from each other. 

Useful Startup Business Account Features

To get the most out of your business account, you should look for certain features that are listed below. Business current and savings accounts with these features will give you better value for your money invested in them, the fee paid monthly, or for investing your time managing your finances in these bank accounts.

These features may be offered for free or you might have to pay a monthly fee to avail of these features listed below. Be sure to opt for a business account that provides you with if not all, some of these features:

Useful Startup Business Account Features

✅Multi-user access to the business account.

✅Integration with popular accounting software.

✅Credit and overdraft facility.

✅Access to credit cards, savings accounts, and saving pots.

✅Overdraft and other financial facilities.

✅Easy access to the account through the bank’s mobile app.

✅24/7 customer support.

✅Invoice management and admin tools.

✅Scheduled payments.

✅Expense management.

✅AI tools to grab receipts and invoices from notifications.

✅Fast withdrawal speeds. 

✅Virtual office address.

✅Support for various types of business.

✅Reminders and notifications.

✅Offers, bonuses, and cashback. 

Which Startup Business Account Should You Choose?

If you ever own a personal business account, you might think it would be better if you opt for a business account from the same bank for fast fund transfers between the accounts, lower account monthly maintenance fees, or to streamline your personal and business expenses. Yes, it does make sense to have a personal and business account in the same bank for efficient fund management. But, you might be missing out on certain features while opting for this route. 

If you are planning to start a business, you should do thorough research before opening a business account. You should never choose an account solely based on convenience.

You should make a list of the business accounts as we have done above and choose the best account that suits your needs and is valued for the fee you pay for its upkeep. Check out the monthly fees, transaction limits, credit facilities, exclusive features, and the rewards offered. 

Always opt for the account with the lowest monthly fees and that offers the maximum free transactions, discounts, offers, online banking experience, and the best customer support.

There might not be a particular bank that excels in all the features listed in the previous sentence. However, try to opt for a business account that strikes the best blend of all the features mentioned above. 

Many banks provide many features such as no monthly fee, low transaction fees, accounting software integration, and many free deals as introductory offers.

Be aware that these features are only valid for a certain period and after the offer period is over, you will have to pay a fee for the services offered. So, try to pick the business account that gives better value for the money you have invested. 

How To Apply For A Startup Business Bank Account?

You can open a business bank account from the branch in person or online depending on the provider.

The information you need to provide also varies depending on the bank or the account provider. However, most of the banks require you to provide details such as:

  1. Personal Information: You need to provide certain documents as specified by the account provider to know about your identity. These documents should be issued by the government and should be valid at the time you are providing for opening a business account. Most account providers require you to submit your passport, driver’s license, utility bill, birth certificate, etc to prove your identity and place of residence.
  2. Company Information: Since you are opening a bank account to manage your business’s expenses, whether you are a sole trader, limited company, or partnership, you need to provide the account provider with details that substantiate the legitimacy of your business. This requires details such as your company’s name, address, employee number, date of incorporation, the service provided by your business, and your business’s annual turnover or projected turnover for the next 12 months. 

Also, Read: Top Small Business Ideas In The UK

Documents Required To Open A Business Account

1. Proof of Identity

Banks may require you to send in the front and back copies of your:

  • UK passport.
  • UK driver’s license.
  • EU driver’s license.
  • EEA member state ID card.
  • Firearms certificate or shotgun license.
  • Northern Ireland electoral ID card.
  • Construction industry scheme card.
  • Military ID card.
  • Biometric residency card.

2. Proof of Address

The account providers may ask you for any one or multiple documents listed below to prove your residency address. You need to provide copies of the front and back of the IDs mentioned below or as PDF documents.

  • UK driver’s license.
  • A bank or building society statement.
  • A utility bill (issued within the last three months).
  • Benefits of DWP Pension confirmation.
  • Council tax bill.
  • Any letter from HMRC.
  • Tenancy agreement from a council or housing association.
  • Credit card or store card statement.
  • Council rent card.
  • Firearms certificate or shotgun license.
  • Bankruptcy Order, Bankruptcy Restriction Order, or Debt Relief Order.
  • Mortgage Statement. 
  • Inland Revenue Notice of Tax Coding.
  • Solicitor’s letter.

3. Partnerships or LLP

If you apply for a business bank account for your partnership or LLP, you need to provide the relevant documents for each partner involved.

4. Charities

If you are applying as a charity, a letter of authority on headed paper listing all trustees to the charity should be sent to the account provider. You also need to include proof of identity documents for each trustee to the charity.

The list of documents accepted may change according to the account provider. You should check the terms of individual account providers to know about the required documents.

5. Business Verification Evidence

  • Certificate of incorporation.
  • Partnership deed.
  • Annual tax return.
  • Business plan.

Step-by-step Guide On How To Open A Business Account

  1. Prepare the relevant documents and information required for opening a business bank account. Details regarding the documents required will be available on the account provider’s website.
  2. Select the best business bank account that suits your needs. Evaluate the features offered such as eligibility criteria, account fees, transaction limits, digital banking features, customer support, and the rewards offered.
  3. Decide whether to open an account in person at a bank or online. According to your decision, you need to fill in a paper or online application to open an account.
  4. After filling in the application, submit it in person at a branch or online in the bank’s online portal or its mobile app. The account provider usually takes about 1 day to 6 weeks to process your application.
  5. Banks might need further verification and documents to approve your application for a business bank account. They might ask you to explain the sources of the capital for the business funding or ask you to appear in person at a bank for biometrics integration. You need to comply with the account provider and answer all the questions to successfully open a business bank account.
  6. Once your business bank account is approved, you will be intimated about it through your email or the phone number you have provided. You can begin to use it for depositing funds or manage it using the bank’s mobile app. 

How Much Does A Startup Bank Account Cost?

Banks offer startup business accounts to entrepreneurs and new business owners with low annual turnover or no income. These accounts usually offer free banking services for a limited period. Usually, these periods vary from 12 months up to 30 months and depend on the account provider.

Once the free period is over, you will have to pay a monthly fee for maintaining your business account, a transaction fee for any payments after the allowed limits, and a fixed fee for deposits. Take into account these costs when you are considering opening a business account for your startup. 

Managing Finances With A Startup Business Account

Take a look at these tips to effectively manage your startup business with the help of a business account:

  1. Open a Business Startup Account: Choose a startup business account from the accounts mentioned in this article that best fits your needs. It should have a low monthly fee, maximum free transactions, online banking and mobile banking features, excellent 24/7 customer support, and credit facilities.
  2. Create a Cash Flow Statement: Cash flow means the expenses, profits, and losses encountered while doing business. A business savings account provides you with real-time tracking of every single penny that goes through your account. It will also ultimately help to keep a tab on expenses and reduce overspending.
  3. Incorporate Accounting And Invoicing Software: Many account providers and banks provide limited-time access to popular accounting software. This helps new business owners to track their expenses and profits. It also automates the process of finance management by grabbing invoices and receipts from notifications and emails. This software also reduces the effort for tax calculation.
  4. Opt For A Business Credit Card: Having a business bank account will help you increase your business’s credit score. This will help you easily fetch loans, overdrafts, and business credit cards. A startup business will benefit highly if it has employee cards which eliminates the effort of reimbursing.
  5. Bookkeeping And Tax Returns: A business account eases your and your accountant’s effort in calculating taxes. A startup business account incorporated with accounting software will sort the expenses, profits, and losses to easily calculate the tax to be filed. Apart from that, business accounts and business credit card purchases are eligible for tax dedication. So, owning a business bank account will greatly help your startup in the long run. 

Best Startup Business Bank Accounts: Our Final Thoughts

Exploring the various options available regarding the business bank accounts that satisfy your needs, can increase the chances of your business succeeding. There is no denying the fact that financial institutions like banks play a crucial role in the success or loss of a business.

And new businesses will require all the help they need to succeed in this highly competitive world. A business bank account is a step in the right direction to help you build your business. 

Always choose a business bank account that fulfills your needs and never be ready to conform to the provided options. Meticulous research has gone into creating a list of the best startup business accounts for you to choose from. So, select a business bank account from the list above to start your journey as an entrepreneur and it will help you grow your business worldwide.

Startup Business Bank Accounts: FAQs

1. Can I open a free startup business account?

Many banks and account providers give the option for free banking for a fixed period. Some business accounts do not have a fixed monthly fee, instead, there is a fee for the services used and if you do not use it for a long time, the bank does not charge any additional fee for maintaining the account.

2. How long does it take to open a startup business account?

The time taken to open a startup business account varies according to the bank. It can take anywhere between ten minutes to 6 weeks depending on the verification process and approval process of the bank. There are banks in which you can open a business current account within a matter of a few minutes.

3. Can I switch my business bank account later?

Yes, you can switch your startup business account later to any other business account from any account provider. Usually, it takes about seven days to switch from one account to another. If your bank is a part of the Current Account Switch Service (CASS), switching accounts will be a hassle-free process.

4. If I am outside the UK, can I still open a business account?

No, you need to be a UK citizen to open a startup business account in a bank based in the UK. If you are a UK citizen and your businesses trade outside the UK, there are no limitations that restrict you from opening a startup business account for that business. However, not many account providers support that criteria.

5. What are the benefits of a startup bank account?

A startup bank account usually comes with a free banking period, where no fee is levied for the banking services used. It can be up to 30 months depending on the provider. A startup business account also provides you with financial tools, an overdraft option, and bonuses.

Stephen Carter

Stephen Carter is a software technology expert. He writes about market research on various hot topics like cryptocurrencies, explaining how they started. He's good at making complicated tech ideas easy to understand for everyone.

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