If your current business bank account is no longer the best fit, you may be interested in switching. With the banking landscape in continual flux, newer deals arise, better interest rates, or perhaps you want more responsive customer service.

In this article, we aim to guide you through switching business bank accounts in the UK, highlighting the critical factors to consider and answering frequently asked questions.

We’ll also cover which banks have signed up for the Switch Scheme, simplifying the process.

Signs You Need to Switch Business Bank Accounts

Here are some common signs that indicate it’s time to change bank accounts:

  • Insufficient banking services – If your current bank doesn’t offer essential services like organized cash and expenses, dedicated bank accounts, cards, and team spending limits, it may be time to consider other options.
  • Excessive fees -Small fees can add up quickly and put a strain on your business’s finances. Hidden charges, recurring monthly fees, and minimum balance requirements can hinder your growth and make managing multiple checking accounts challenging.
  • Dependence on physical locations – In today’s digital age, visiting a physical bank branch for most banking tasks is unnecessary. If your current bank requires you to go to a physical location for essential services, it’s time to explore online banking options.
  • Limited scalability – Look for a banking partner that offers seamless integration with accounting services, allows for unlimited accounts, and doesn’t impose fees that erode your savings. The right bank will support your growth at every stage by giving you clarity and control over operating expenses, cash flow, and accounts payable.
  • Poor customer service – Experiencing poor customer service from your bank can be incredibly frustrating, especially when you’re already juggling multiple responsibilities as a business owner. Your banking partner should provide hassle-free support and be available to assist you when you need it most.

Is it Hard to Switch Banks?

The misconception that switching banks is difficult often arises from outdated banking systems. In reality, with the right online business banking platform, switching banks can be relatively easy and take as little as 10 minutes.

An efficient online banking platform should offer:

  1. Simple online onboarding: The signup process should be straightforward, allowing you to open an account quickly and with minimal hassle.
  2. Clear account setup steps: The platform should guide you through essential steps to set up your new account and transfer your banking activities.
  3. Automatic payment assistance: The new bank should help ensure your automatic payments are set up correctly to avoid disruptions.

However, one challenge during the process is choosing the right bank that suits your needs. Different banks offer varying services, benefits, and fees, so it’s essential to research and compare before making a decision.

What is the Business Banking Switch Scheme?

The Business Banking Switch Scheme, also known as the Current Account Switch Service, is a UK government-backed initiative designed to make switching bank accounts simple, reliable, and hassle-free. 

The scheme guarantees that your new bank will handle the process of switching, ensuring that all payments into and out of your old account are redirected to your new account and that your employees, suppliers, and customers are notified of your further bank details. 

The switch is typically completed within seven working days, and during that time, you can continue to use your old account as usual. The scheme is free to use and provides peace of mind, knowing that your switch will be handled professionally and your business will not be impacted during the transition. The Business Banking Switch Scheme is an essential resource for UK businesses looking to switch their bank account, as it ensures a smooth and reliable process, minimizes the risk of disruption, and protects your business from potential losses during the transition.

What is the Current Account Switch Guarantee?

The Current Account Switch Guarantee is a guarantee provided by the UK’s Current Account Switch Service (CASS) that ensures that your switch will be completed within seven working days, and that all direct debits, standing orders, and incoming payments to your old account will be redirected to your new account automatically. 

The guarantee also covers any missed or delayed payments during the switch, ensuring that your business will not be negatively impacted. 

If anything goes wrong during the switch, your new bank will rectify the situation and compensate you for any losses. 

The following banks have signed up:

Bank NameSigned-Up to Bank Account Switch Scheme
Acorn Account
AIB (NI)
Allied Irish Bank (GB)
Arbuthnot Latham & Co., Limited
Bank of Ireland UK PLC
Bank of Scotland
Barclays
Barclays Private
C. Hoare & Co.
CardOneMoney
Clydesdale Bank Plc
Co-operative Bank
Coutts
Coventry Building Society
Cumberland Building Society
Danske Bank (Northern Bank Limited)
First Direct
Habib Bank Zurich plc
Halifax
Hampden & Co
Handelsbanken
HSBC CIIOM
HSBC Private Bank
HSBC UK Bank plc
Investec Bank plc
Isle of Man Bank
Lloyds Bank
Lloyds International
Lloyds Private Bank
Metro Bank
Monzo
Nationwide Building Society
NatWest
Natwest International
Reliance Bank
Royal Bank of Scotland
Santander
smile
Starling Bank
thinkmoney
Triodos Bank
TSB Bank
Ulster Bank
Unity Trust Bank
Virgin Money
Weatherbys Bank Ltd
Yorkshire Bank

Pros and Cons of Switching your Business Bank Account

Pros

  • Higher interest rates
  • Fewer bank fees and charges
  • Lower overdraft fees
  • Account ewards and incentives
  • More responsive customer service
  • TighterIncreased security features
  • Introductory offers that your current bank account doesn’t offer

Cons

  • It’s not 100% certain that your new account will be better
  • You could lose any history, benefits and rewards you have built up with your current bank
  • Possible disruption to standing orders or direct debits
  • Need to update payment details with suppliers and clients
  • Termination fees from the previous bank

How to switch business bank accounts

Switching business bank accounts in the UK can be a straightforward process if you follow these steps:

  1. Choose a new bank: Compare their business banking offerings using Business Expert, including interest rates, fees, services, and features. 
  2. Open a new account: Once you have chosen a new bank, you will need to open a new business account. This can usually be done online or by visiting a branch.
  3. Notify your employees, suppliers, and customers: Let them know that you are switching bank accounts and provide them with your new bank details.
  4. Request the switch: Contact your new bank and request that they initiate the switch through the Current Account Switch Service. They will provide you with a switching date and handle the process for you.
  5. Update your records: Make sure to update your records with your new bank details, including your accounting software and other financial systems.
  6. Close your old account: After the switch has been completed, you can close your old account. Make sure to check with your old bank for any fees or charges that may apply.
  7. Monitor your new account: Once the switch has been completed, monitor your new account regularly to ensure that all payments are received and processed correctly.

It’s important to remember that during the switch, you can continue to use your old account as usual. The Current Account Switch Service and Current Account Switch Guarantee will ensure that your switch is completed smoothly and without disruption to your business

The Costs of Switching Business Bank Accounts: What to Expect Financially

Switching your business bank account can be a great way to save money or get better services. However, it’s important to be aware of the potential financial costs involved.

Here are some of the costs you may incur when switching business bank accounts:

  • Exit fees: Your current bank may charge an exit fee, also known as an account closure fee. This fee can range from $25 to $200 or more, depending on the bank and the type of account you have.
  • Setup fees: Your new bank may charge a setup fee to open a new business account. This fee can also range from $25 to $200 or more.
  • Initial deposit: Your new bank may require an initial deposit to open a new business account. This deposit amount will vary depending on the bank and the type of account you open.
  • Time costs: Switching business bank accounts can take time and effort. You’ll need to research different banks, compare their fees and features, and complete the application process. This can take several hours or even days.
  • Operational disruptions: There may be a period of time when your business is unable to access funds, make payments, or receive payments while the account switch is being processed. This could impact your business operations and result in lost revenue.

It’s important to weigh the potential financial costs of switching business bank accounts against the potential benefits. If you’re confident that you’ll save money or get better services by switching, then the costs may be worth it. However, if you’re not sure, it’s best to do your research and carefully consider all of your options before making a decision.

Switch Timing: When to Switch Business Bank Accounts for a Smooth Transition

Switching your business bank account can be a big change, but it can be a smooth one if you choose the right time to do it. Here are some factors to consider when choosing the best time to switch:

  • Your business’s fiscal calendar: If your business has a busy season, you may want to avoid switching bank accounts during that time. Instead, choose a time when your business is less active, such as the end of a fiscal quarter or the beginning of a new year.
  • Your business’s cash flow: If your business experiences seasonal fluctuations in cash flow, you may want to avoid switching bank accounts during a time when you’re expecting a large influx or outflow of money.
  • Your business’s upcoming projects or milestones: If your business is about to embark on a major project or milestone, you may want to avoid switching bank accounts during that time. This will help to minimize any disruptions to your business operations.

Here are some specific times that may be good for switching business bank accounts:

  • The end of a fiscal quarter: This is a good time to switch because quarterly reports are usually finalized at this time, and there may be a lull in business activities. This will give you time to focus on the switch without the added pressure of imminent financial reporting or tax deadlines.
  • The beginning of a new year: This is another good time to switch because it coincides with the natural closing of your financial books. This will make it easier to manage the accounting process during the switch.
  • An off-peak season: If your business experiences seasonal fluctuations in activity, you may want to switch during an off-peak season. This will minimize the operational impact of the switch and make it easier to navigate the transition without affecting customer service or sales.

Best Business Bank Accounts for Switching

Monthly Fee
£12.50
Bank Transfers
30p
Card Purchases
Free
Overdraft
icon cross
  • No Credit Checks Needed
  • No Branch Visits or Signatures Needed
  • Aimed at Small Businesses
Access
App and Online
See Deal
More info
Pros
  • No Branch Visits or Signatures Needed
  • Online Banking, phone and SMS available
  • Can withdraw money via any Barclays Bank, an pay in via the Post Office
Cons
  • Functionalities are very basic without unique features
  • Opening a new account comes with a £60 fee
  • Operations are not FSCS protected
  • Most services come with small fees which will soon add up
Eligibility Criteria
  • You must be at least 18 years of age and a UK resident.
  • You must be a sole trader or the director of a limited company.
  • You must have an annual turnover of less than £2m.
  • Businesses operating from outside the UK are excluded.
  • High-risk businesses are not eligible.

FSCS Protection: No, Acorn is not protected by the FSCS.

Trustpilot Score: 757 reviews with an average rating of 4.8/5

Monthly Fee
Free
Bank Transfers
Free
Card Purchases
Free
Overdraft
  • Wide Range of Options
  • Access to 960 Branches in the UK
  • Dedicated Relationship Manager
Access
App & Online
See Deal
More info
Pros
  • Overdraft and Credit Card Options
  • No Minimum monthly charge
  • Free Access to ‘Free Agent’ Accounting Software
Cons
  • International banking comes with fees
  • Customer Reviews are fairly mixed
Eligibility Criteria
  • You must be aged 18+ and be a UK resident.
  • You must be a sole trader or the owner/director of your company.
  • You must have an annual turnover of less than £2m.
  • Businesses operating from outside the UK are excluded.
  • High-risk organisations are not eligible.

FSCS Protection: Yes, Natwest is protected by the FSCS.

Trustpilot Score: 6,301 with an average rating of 1.4/5

Monthly Fee
Free
Bank Transfers
Free
Card Purchases
Free
Overdraft
  • Competitive Interest Rates
  • 25 Months Free for New Accounts and Switchers
  • 130 UK branches
Access
App & Online
See Deal
More info
Pros
  • Overdafts
  • Online, telephone or APP based banking
  • M Account for Business comes with No monthly account fee as well as free day-to-day online banking
Cons
  • All accounts other than the M Account carry monthly charges
  • Fees apply for depositing cash or transacting internationally
  • Less locations than the bigger high street banks
Eligibility Criteria
  • You must be 18 years old and be a UK resident.
  • You must be the owner/director of your business, which must be based and operate in the UK (except Channel Islands, Isle of Man & NI).
  • You must have a maximum annual turnover of no more than £6.5m.
  • Businesses operating from the Channel Islands, Isle of Mann, NI or outside of the UK are excluded.
  • Charities, those holding clients’ money and high-risk organisations are not eligible.

FSCS Protection: Yes, Virgin Money is protected by the FSCS.

Trustpilot Score: 7,453 reviews with an average rating of 1.9/5

FAQ’s about Switching a Business Bank Account

Do I have to close my existing account when I open a new business bank account?

Will I be charged a penalty fee if I switch business accounts?

How long does it take to switch business bank accounts?

Can I switch business bank accounts if I have an overdraft?

Can I switch business bank accounts if I have a loan?

Will I need to update my records with my new bank details?