What Your Challenger Business Bank Account Actually Costs
A free business bank account is only free until you start using it.
Tide’s free plan charges 20p per bank transfer. At 50 transfers a month, that’s £10. At 150, it’s £30. At 250, the kind of volume a small construction firm paying subcontractors every week might hit, it’s £50 a month.
Tide’s Smart plan at £12.49/month includes unlimited transfers. If you’re making more than 62 transfers a month, Smart is already cheaper than Free. That’s a breakeven point most small businesses cross faster than they expect.
Monzo’s Lite plan is limited to basic banking, no invoicing, no team cards, limited accounting integration. The features most businesses actually need require Pro at £5/month. That’s still cheap, but the gap between the free tier and the usable product is bigger than the headline suggests.
Revolut’s Basic plan is £10/month and includes 10 free local transfers. At higher volumes, Grow at £30/month gives 100 free transfers and £15,000 of fee-free FX, once you’re converting currency regularly, that maths favours upgrading.
If you don’t deposit cash and you don’t need multi-currency, Starling is the cleanest zero-cost option. UK transfers are free. Card purchases are free. Cash deposit at the Post Office costs 0.7% (minimum £3), but nothing else does.
| Monthly transfers | Tide Free actual cost | Tide Smart (£12.49/mo) | Starling Free |
|---|---|---|---|
| 25 transfers | £5 | £12.49 | £0 |
| 62 transfers | £12.40 | £12.49 | £0 |
| 100 transfers | £20 | £12.49 | £0 |
| 150 transfers | £30 | £12.49 | £0 |
| 250 transfers | £50 | £12.49 | £0 |
Check your last three months of transfer volume before committing to a free plan with per-transaction charges. BACS, standing orders, and direct debits all count toward the Tide 20p fee.
When you pay staff weekly and settle supplier invoices from the same account, you can reach 60 transfers before you touch your regular operating costs.
We found the breakeven is 62 transfers a month, if your volume sits near that, you’re at the Tide Free vs Smart decision point. Below that, Tide Free costs less. Above it, Smart does.
FSCS Protection for Challenger Business Bank Accounts
Your deposit protection at Revolut changed in March 2026, and most comparison pages haven’t updated it yet.
If you held a Revolut account before 11 March 2026, your protection just changed: Revolut received its full UK banking licence on that date. Your eligible deposits are now FSCS-protected up to £120,000, the same limit as Starling, Monzo, and Zempler.
We checked the major comparison sites in April 2026 and most still describe Revolut as an e-money institution, if you’ve read one recently, that information is stale. If FSCS coverage was a barrier for you before, it isn’t now.
The FSCS limit itself rose in December 2025, from £85,000 to £120,000 per person per authorised firm. Every fully licensed bank on this page covers £120,000.
If you’re holding more than £30,000 in a Tide or ANNA account, the e-money distinction is worth understanding. Your funds are safeguarded, held in ring-fenced accounts, separate from the provider’s own balance sheet.
You get meaningful protection from safeguarding, but not the same as FSCS. If Tide or ANNA failed, your recovery would follow the FCA’s resolution process, not an automatic payout.
For most small businesses, the practical difference is small, your cash flow and working capital are protected either way. For a business keeping £80,000 in a single account, the distinction matters more. We would not treat e-money safeguarding and FSCS as equivalent if you hold significant reserves.
| Provider | Regulatory type | Deposit protection | Protection mechanism |
|---|---|---|---|
| Starling | Full UK bank (PRA licensed) | £120,000 FSCS | Automatic FSCS payout if bank fails |
| Monzo | Full UK bank (PRA licensed) | £120,000 FSCS | Automatic FSCS payout if bank fails |
| Revolut | Full UK bank (PRA licensed from March 2026) | £120,000 FSCS | Automatic FSCS payout if bank fails |
| Zempler | Full UK bank (PRA licensed) | £120,000 FSCS | Automatic FSCS payout if bank fails |
| Tide | EMI; new accounts via ClearBank (PRA-licensed bank) | £120,000 FSCS (new accounts); legacy e-money safeguarded | FSCS payout for new accounts; ring-fenced for legacy e-money |
| ANNA | E-money institution (FCA authorised) | Safeguarded (not FSCS) | Ring-fenced accounts, FCA resolution process |
How to Choose the Right Challenger Business Bank Account
The right challenger business bank account depends on your transaction profile, not just your preference for the interface. We mapped the six accounts against four business types to make this concrete.
Sole traders, under 60 payments a month: If you process under 60 payments a month, Tide on the free plan is your natural first account.
Invoicing and expense categorisation are inside the banking app. If you’re logging receipts from your phone between client visits, that saves a separate subscription.
ANNA is the alternative if you want AI receipt scanning and automatic tax estimates built in. If FSCS coverage matters to you from day one, Starling is free, fully licensed, and does everything you need.
Limited companies with payroll, suppliers, and HMRC to pay: Your payroll, your supplier invoices, and your HMRC payments all count as separate transfers. Settle those from one account and you can reach 100–200 transfers a month without trying.
On Tide Free that’s £20–40 in fees. Starling at £0 or Tide Smart at £12.49 makes more sense at that volume, we think Starling wins above 80 payments a month. Starling also offers an overdraft, which Tide and Monzo Lite don’t.
Businesses with regular international payments: If you convert often, Revolut holds 25+ currencies at close to the mid-market rate within plan allowances. It now has full FSCS protection.
We’d recommend Grow at £30/month for anyone converting more than £1,000 a month. The Basic plan FX allowance runs out quickly.
Cash-heavy businesses: If you handle cash daily, none of the six accounts is built for your needs. Starling charges 0.7% (minimum £3); Tide charges 0.5% (minimum £2.50) or 3% via PayPoint.
If you take cash daily, a traditional bank for cash handling alongside a challenger for digital payments is usually the more practical and cheaper setup.
| Your situation | Start here | Why |
|---|---|---|
| First account, low volume (<60 transfers/month) | Tide Free | Free, invoicing built in, open in minutes |
| First account, want FSCS from day one | Starling | Free, no transfer fees, FSCS-protected, overdraft available |
| Medium volume (100–200 transfers/month) | Tide Smart or Zempler | Smart £12.49 includes unlimited transfers; Zempler free with 35p/transfer after 3 |
| International payments, multi-currency | Revolut | 25+ currencies, interbank FX, now FSCS-protected |
| Sole trader wanting automated tax/VAT help | ANNA or Monzo Pro | AI receipt scanning (ANNA) or Tax Pots (Monzo) inside the account |
| Want to earn interest on balance | Zempler | Only challenger on this list that pays interest on current account balance, FSCS-protected |
| Cash-heavy business | None, add a traditional account | All challengers charge for cash deposits; high-street bank alongside a challenger is usually more practical |
Every Challenger Business Bank Account, Reviewed
Tide Free Business Account
Revolut Business Basic Account
ANNA Money Pay As You Go Account
Zempler Bank Business Go Account
Starling Bank Business Current Account
Monzo Business Lite Account
Challenger Business Bank Account FAQs
Are challenger banks FSCS protected?
Some are, some aren’t. Starling, Monzo, Revolut (from March 2026), and Zempler hold full UK banking licences, deposits are FSCS-protected up to £120,000. Tide and ANNA are e-money institutions: your funds are safeguarded in ring-fenced accounts at authorised institutions, but the protection mechanism is different from FSCS. If either firm failed, recovery would follow the FCA’s resolution process rather than an automatic FSCS payout. The distinction matters more if you’re holding large balances. For most small businesses with modest working capital, the practical risk difference is small, but it is a difference.
Can a challenger bank be my sole business account?
Yes, for most small businesses. Tide, Starling, and Revolut all offer the core functionality a limited company needs: UK bank transfers, a debit card, accounting integrations, and the ability to receive client payments. Where challenger accounts fall short is cash handling and overdraft access, if you regularly deposit cash or need a reliable credit facility, a traditional bank alongside your challenger account is often the right setup.
Which challenger bank is best for international payments?
Revolut, reliably. It holds 25+ currencies, converts at close to the mid-market rate within plan allowances, and now has full FSCS protection after receiving its UK banking licence in March 2026. The Basic plan includes £1,000 of fee-free FX per month, after which 0.6% applies. If you convert more than that regularly, Grow at £30/month includes £15,000 of fee-free FX. Wise is worth comparing if international transfers are your primary use case rather than day-to-day banking.
What is the difference between an e-money account and a bank account?
A bank account is held at a PRA-authorised institution with FSCS deposit protection. An e-money account is issued by an FCA-authorised e-money institution. Your funds must be safeguarded, ring-fenced at a regulated bank, but they are not covered by the FSCS deposit guarantee. In practice, the day-to-day banking experience is similar. The difference becomes relevant if the institution fails, or if you are holding more than the FSCS limit in a single account.
Can I get a business overdraft with a challenger bank?
Starling and Zempler offer business overdrafts, subject to eligibility. Tide, Monzo Lite, and ANNA do not. Revolut does not offer a traditional overdraft, though it has lending products on higher-tier plans. If overdraft access is important, Starling is the strongest challenger option, it is free, FSCS-protected, and genuinely considers overdraft applications for established businesses. That said, overdraft eligibility is never guaranteed. If you need reliable credit access, a traditional bank with a long-standing relationship may offer more certainty.
How we reviewed Best Challenger Banks for Business: Starling
What we assessed. We evaluated Best Challenger Banks for Business: Starling on pricing, contract terms, features, and eligibility. These are the factors that matter most to UK small businesses considering this provider.
Data sources. Best Challenger Banks for Business: Starling’s pricing page, terms, and product docs were checked directly in April 2026. No comparison sites, no press releases, no affiliate material. FCA register cross-checked for regulatory status.
Update cadence. We re-verify this page at least monthly, and whenever a provider changes pricing, eligibility, or terms. The verification date on the page reflects the most recent full review.
We have no affiliate relationship with Best Challenger Banks for Business: Starling, see our editorial policy.