For a startup, choosing the right business bank account is a hugely important decision. But selecting the right account can be challenging with so many players in the market.
I’ll guide you through the best options below based on my detailed analysis of the market, comparing each account head to head across a number of metrics.
- Ecommerce – Easy integration with Ecommerce via Apps and Plugins
- International payments – Send and receive money from 200 countries
- Block cards or set accounting limits with a tap
- Available for Limited Companies Only
- Accounts do not support cash or cheque deposit
- One of the best Apps in the sector
- No Monthly or Annual Fees
- Easy Invoice Creation Functionality
- Post Office Deposits Cost £1
- 20p charge for transfers between accounts
- 3% charge for cash deposits at Paypoints
Eligibility Criteria
You must be 18 years or over, a UK resident, and have a valid UK phone number.
To qualify for Tide’s Black Friday Deal and get £100 cashback, all you need to do is spend £500 or more via your new account with them within the first 90 days of opening. This deal is valid from 20/11/2023 – 30/11/2023.
- Top-rated 24/7 support
- Budget and transaction categories to help manage spending habits
- Digital receipts for creating and storing important business information
- Basic version, fewer features than Pro
- No automatic allocation of funds to a “tax pot”
- No integration with accounting software like Quickbooks, Xero, or FreeAgent on Lite account
Eligibility Criteria
You must be a sole trader or the director of a registered limited company by shares (Ltd), based in the UK.
If you’re a limited company, your company must have an active status on Companies House, an active company director, at least one person of significant control listed on Companies House, less than 25% of persons of significant control or directors being corporate entities, make money mostly from selling goods and/or providing services (not mostly from interest or investment income), and be a tax resident in the UK only.
What Startups Should Look for in a Business Current Account
Take time to research each bank account before signing on the dotted line, read the reviews and ensure you choose a company with a reliable, trustworthy service that can support your business growth.
Five things you might look for when choosing a bank account as a startup business are:
- Fees – Business bank accounts usually charge a monthly fee, which varies widely. Many also charge for each individual service like ATM withdrawals, deposits, cash advances and foreign currency services. Make sure you consider which of these your startup will use most often and find an account that offers the best deal.
- Look for introductory offers – Many banks offer introductory offers such as three months or even a year’s free banking. This initial period can be helpful to a new business just getting itself off the ground.
- Customer Services – What kind of customer service does each bank offer businesses? Is there a call centre, or are all enquiries routed via live chap in the app itself? What are the opening hours of the support centre, and what do reviewers say about the quality of the help received?
- Particular Requirements – Your startup’s requirements will differ from others, so what do you need to get the business off the ground? If it’s an overdraft, make sure you find an account that offers that. Is it integrated with accounting software, in-App invoicing, foreign currency services etc?
- Protection – Having your money protected is reassuring for any business. And for UK-authorised banks, the FCSC automatically compensate each eligible company depositor up to £85,000. But be warned, many business accounts operate under electronic or e-money licences instead and hence don’t qualify.
9 Useful Startup Business Bank Account Features
- Well-designed mobile APP
- Good integration with your accounting software
- Invoice tracking
- Phone notifications
- 24/7 Customer Service
- Expenses management
- No monthly fee or free banking period
- Overdraft
- Reporting features
7 Best Banks for Startups in 2023
Tide
With a market share of 7%, Tide’s success continues to soar, with over 100,000 bank accounts added in 2021. Tide Business Account features include free banking, accounting software integrations, and registering a free limited company with new startup accounts. They prioritise fast account set-up, and their accounts are both FCA regulated and with FSCS protection. Overall, their customer service is excellent, with a 4.2-star rating on Trustpilot.
Read our full Tide Account Review
- One of the best Apps in the sector
- No Monthly or Annual Fees
- Easy Invoice Creation Functionality
- Post Office Deposits Cost £1
- 20p charge for transfers between accounts
- 3% charge for cash deposits at Paypoints
Eligibility Criteria
You must be 18 years or over, a UK resident, and have a valid UK phone number.
To qualify for Tide’s Black Friday Deal and get £100 cashback, all you need to do is spend £500 or more via your new account with them within the first 90 days of opening. This deal is valid from 20/11/2023 – 30/11/2023.
Starling Business Account
Starling Bank claims 3% of the retail market share and 7% of SME lending. It was recently voted the top-ranked business current account provider by a large-scale survey carried out by the Competition and Markets Authority (CMA). Starling Business Account Features include free monthly accounts, 24/7 customer service, no charge when spending abroad, and the ability to deposit both cash and cheques via the Post Office. Starling maintains excellent online reviews, with an average 4..4 Star rating out of 31,000 Reviews on Trustpilot.
Read our full Starling Account Review
Anna
Anna is intended as a simple, convenient and efficient APP-first bank account for small businesses and freelancers. Anna Business Bank Account features include same-day set up, a Mastercard that can be used anywhere in the world, 24/7 Customer Service and Free UK transfers and ATM withdrawals with paid plans. It integrates with all common accounting software and includes handy tax return reminders in the APP.
- Instant Invoice Generation
- Good customer service via Live Chat
- Xero Integration
- Easy VAT submission to HMRC via App
- To open a business account, you’ll need a photo of your full driving licence or a photo of your valid passport.
- You can apply from outside the UK, but only if you’re a UK resident
- Anna carry out an identity check for new acccounts but not a credit check
Eligibility Criteria
You need a UK residential address to open an account. This account isn’t open to charities.
Cashplus Business
Cashplus Bank is a fully regulated UK bank that provides several features and benefits tailored to meet the needs of startups. Offering financial security through the Financial Services Compensation Scheme, the bank protects your deposits up to £85,000. The account setup process is uncomplicated, and the bank provides the convenience of managing your finances online or via a mobile app.
With two primary account types, Business Go and Business Extra, Cashplus offers the flexibility to meet various business needs. Another noteworthy aspect is its compatibility with major accounting software such as QuickBooks and Xero. This integration makes financial tracking simpler. If you deal in cash transactions, the bank allows you to deposit cash at any UK Post Office. You can also issue up to 20 additional cards for your team, facilitating easier expense management.
The mobile application is intuitive, with features like 24/7 access, instant payment notifications, and the capability to attach digital receipts. Moreover, Cashplus offers value-added features like special offers from reputable brands and a tool to improve your credit score.
Additional considerations that reinforce Cashplus as a viable choice include their 15-plus years of operation and a customer base exceeding 1.6 million. The bank also has a great Trustpilot score of 4.3 out of 5 stars.
- Business Credit Builder Add-On
- Overdrafts of up to 2k
- Pay in via any Post Office
- £9 monthly fee for Business Extra Account
- £2 ATM Use
Eligibility Criteria
Your business must based in the UK. You’ll need verified ID such as passport or driving licence, the registration number of your company at Companies House and proof of business address.
HSBC Kinetic
HSBC’s Kinetic account is the bank’s entry to the APP-first digital account market and as such, comes with a streamlined APP, free banking for 12 months, accounting integrations with QuickBooks, Sage and, Xero and FSCS Protection. The account requires a soft credit check which won’t impact your credit score and allows for overdraft facilities, an HSBC Credit Card, and a savings account. HSBC’s online reviews let it down with a 1.4 aveage star rating out of 6,500 ratings. It ranked in the bottom three for business account customer service in a recent (August 2022) survey carried out by the Competition and Markets Authority (CMA).
Read our full Kinetic Account Review
Mettle
Mettle’s philosophy is no fees or hidden costs, and for new businesses, it’s got a lot to commend it. Open an account quickly, with no fees, multiple integrations with accounting software, and no credit checks. Because the emphasis of the account is simplicity, you can’t pay in cheques, however, or use HSBC branches, despite HSBC owning it. You’ll also get no FSCS protection and no options for overdrafts, credit cards, or the ability to make international payments. It comes with a maximum account balance of £100,000 for limited companies and £50,000 for sole traders, and if you can live within the account limitations, the emphasis on ‘no fees’ makes this worth considering. Mettle reviews are generally great, with a 4.6-star rating on Trustpilot based on 1800 reviews.
Natwest Business
Natwest Business offers substantially more functionality than its APP-only Mettle account. You get access to the 960 UK branches, a dedicated account manager, the ability for traditional banking features such as overdrafts, credit cards and loans, and the ability for savings accounts. Despite its size and history, the Natwest business accounts don’t rate nearly as high as some others, however. Natwest receives an average of 1.4 stars out of 5 on Trustpilot, with a rating of ‘Bad’.
Read our full Natwest business Account Review
Startup and New Business Bank Account Comparison
| Name | Monthly Fee | Transfers | Overdraft | Access | Offer | Website |
|---|---|---|---|---|---|---|
| Tide | Free | 20p | X | App/Online | ✓ | Get Deal |
| Starling | Free | Free | X | App/Online | X | |
| Monzo | £5 | Free | X | App/Online | X | |
| Cashplus Business | Free | Free | ✓ | App/Online | ✓ | Get Deal |
| HSBC Kinetic | £6.50 | Free | ✓ | App/Online | ✓ | |
| Revolut | Free | Free | X | App/Online | X | Get Deal |
| Anna | Free | Free | X | App Only | ✓ | Get Deal |
| Natwest | Free | 35p | ✓ | App/Online | ✓ | |
| Co-Operative | £10 | 20p | ✓ | Branch, App/Online | ✓ | |
| Royal Bank of Scotland | Free | 30p | ✓ | Branch, App/Online | ✓ | |
| Virgin Money | Free | Free | ✓ | App/Online | ✓ |
Startup Banking Costs and Fees Comparison
| Bank | Free | Restrictions | Monthly Fee |
|---|---|---|---|
| Tide | Forever | Per transaction Fees | Tide Plus is £9.99 + VAT |
| Starling Bank | Forever | Almost everything is free if you have less than 10 employees and <£1.7m turnover. | No monthly fee. Some charges for paying in cash. |
| Revolut | Forever | Free account available | £7.00-£100 |
| Countingup | Forever | Free account available dependent on income being £500 per month. | £4.95-£9.95 |
| Mettle | Forever | Free | N/A |
| Anna | Income Dependent | Free if monthly income is <£500. | £4.90-£19.90 |
| The Co-operative Bank | 30 months | No monthly charges if your balance stays above £1000. | £7.00 |
| TSB | 25 months | Free for startups and switchers | £5-£40 |
| Royal Bank of Scotland | 24 months | Free for startups and turnover <£1 million. | No monthly fee. Transaction charges apply. |
| NatWest | 18 months | Free for startups and turnover <£1 million. | No monthly fee. Transaction charges apply. |
| Barclays | 12 months | Free for startups (less than 12 months trading) | Up to £8.50 |
| HSBC | 12 months | 12 months free for new businesses and switchers | From £6.50 |
| Lloyds | 12 months | 12 months free for startups | £7.00 |
| Bank of Scotland | 12 months | Free for startups | £7.00 |
Startup Bank Account FAQs
What do I Need to Open a Startup Business Account?
To open a startup business bank account you’l need correct documentation, plus more specific requirements for particular institutions that require credit checks. Typically, that includes:
- Proof of Identification, such as a driving license or passport
- Proof of current address, such as a recent Utlity bill or bank statement
- Companies House Registration Document – if creating a limited company account
- Project Yearly Turnover
- Director’s Details – Including names, dates of birth, addresses and National Insurance numbers
How Long will it Take to Open my New Business Account?
Typically, it takes 1 to 4 weeks to open a new business bank account. While many banks promise miracles such as 3 minutes’, it take time for them to do the identity and credit checks and send your bank cards out in the post.
No Credit Check accounts can be faster for this reason and some will even allow you to start paying with a virtual card before the real one arrives.
How Much do New Business Bank Accounts Cost?
Most business bank account’s don’t charge an application fee, or an ongoing monthly fee, at least until the initial introductory period is over. After this point, you’ll typically pay for certain services and transactions, such as ATM withdrawals, cheque deposits and foreign currency, but each account will vary widely in this regard. Some offer a range of monthly fee options with the higher rates covering more free transactions, up to a certain level.