If you run a company or organisation, a business bank account is a type of current account that lets you carry out, and keep track of, everyday transactions. Whether it’s buying goods from suppliers, or paying for services, a business bank account is essential.
This type of bank account is separate from your personal bank account, and usually comes with different features and services. Some banks set specific conditions on your business bank account depending on the size of your business, or the amount of turnover.
How to choose a business bank account
Whatever the size of your business, a business bank account is a good way to keep track of your company’s finances.
The best business bank account differs depending on your banking needs. Different business accounts come with varying features, and you need to see which are available to your business.
The features of a business bank account include:
An overdraft, which lets you borrow money through your business account – but watch out for expensive fees.
Debit cards, so you and your employees can spend money in person, online or by phone.
Online banking, so you can manage your business account through the lender’s website or app.
Post Office banking service, so you can conveniently pay cash into your account wherever there’s a Post Office.
A cheque book, which comes with most business bank accounts and lets you pay bills or one-off payments.
Branch banking, so you can pay in cash or cheques and convert notes into coins.
Interest, which you earn on a positive balance in your business bank account.
Accounting software integration, so it’s easier to run your business.
The best business bank accounts might also include other features. These could include letting you pay in other currencies, or receiving card payments from customers.
Check the cost of your business account
Most business accounts charge a yearly or monthly fee. Finding a free business bank account isn’t easy, but some banks give free business banking after you’ve used the account for a while. There could also be set business banking fees when you:
- withdraw cash
- write a cheque
- pay money in
- send money by bank transfer
- use your overdraft
- receive card payments.
It’s a good idea to check the fees for the transactions your business uses the most. Doing this can help you pick the best business account for your needs.
Here’s how much a business bank account costs.
Compare business bank accounts
If you’re considering different business accounts to find the best business bank account, our comparison table is a good place to start. It includes details of each business account’s requirements in terms of your company’s annual turnover. It also tells you which accounts are for what types of company.
Banks usually offer different business bank accounts, depending what type of company you have. The different types of companies include:
- sole traders or partnerships
- small and medium sized enterprises (SMEs)
- large companies and corporations.
Once you’ve worked out which accounts you’re eligible for, find the ones that offer the features you need. You can then compare business bank accounts and choose an account that suits your needs. Check the fees and see whether they pay interest on your balance.
Can you get a free business bank account?
If you’re a start-up or small business, you might be able to get free business banking, with no monthly fees.
According to the UK’s Companies Act 2006, a small business is one that has at least two of the following:
- an annual turnover of no more than £5.6 million
- an annual balance sheet total of not more than £2.8 million
- 50 or fewer employees.
Open business account online
You can open a business bank account online in minutes. Using our our comparison table above you can compare business bank accounts and fill out the online application when you’ve chosen one that suits you.
To make it as quick as possible, it’s worth gathering as much information as possible before you try to open your online business bank account. Some important documents you might need include:
- a document to prove your identity
- a document to prove your UK address
- further documentation to prove your company address
- Companies House registration documents
- registration forms.
If the bank needs to check anything, this could delay the process.
An online business account lets you manage your business finances and make payments 24 hours a day through your computer, tablet or phone.
One important feature of an online business account is accounting software integration. It sounds complicated, but it’s simply a way you can connect your bank account with accounting software you already use, or one you’d like to switch to. This way you don’t have to manually upload transactions, are fed in automatically. Popular accounting software often integrated with business accounts includes:
Every business banking software has different features. Once you’ve found the software that works for your business, you can choose the best business current account that’s compatible with it. Some software providers let you trial the software first, which is helpful.
Most banks and building societies offer online banking for free. But if you think you’ll definitely need it, double check this is available when you pick your business bank account.
How to switch to a new business bank account
Switching bank accounts is simple.
Businesses with fewer than 50 employees can use the Current Account Switch Service which is quick, simple and stress free. They do it all for you and you’re protected by the Current Account Switch Guarantee.
Large businesses can ask their new bank to arrange it.
How much can you pay into my business current account?
Most business accounts have a minimum and maximum balance set by the bank. If your balance gets too high or low, you might be charged a fee.
Can you send and receive international payments from my business account?
Yes, but you might be charged.
Your business bank account will have a unique International Bank Account Number (IBAN). And all banks and financial organisations have a Business Identifier Code (BIC). You’ll need these details for international transactions. Most banks charge for the transfer so check this first.
Can you have more than one business banking account?
Yes, you can have more than one business bank account. If you can’t decide which is the best business bank account for you, you can try a few. But you’ll have to apply for each one separately.
What else does your business need?
If you’re running a business, there are lots of services you might need. These include:
Read our guide on running your own business and compare all business products.
Business bank account FAQs
How long does it take to get a business account?
You could open one in minutes if you apply online or in a branch, but it could take longer if the bank needs more documents or have to run any checks.
Can I have more than one business current account?
You can have more than one business current account but you will have to apply for the new account in the same way you did for the first.
Can I use my personal account instead?
If you are a sole trader or your business is a partnership, your bank may let you. Incorporated and limited companies can only use business accounts.
How much can I pay into my business account?
Most accounts have a minimum and maximum balance set by the bank. You may be charged a fee if your balance gets too low or high.
About our current accounts comparison
Who do we include in this comparison?
How do we make money from our comparison?
We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.
You do not pay any extra and the deal you get is not affected.