Comparing the Best Business Bank Accounts in the UK for 2024

Allica Bank is just one of many options for businesses in the UK.

We won’t pretend that we’re perfect for everybody, so we want to give you an honest assessment of a range of business current accounts. We want you to choose the right bank for you, even if that isn’t Allica.

 

Compare business accounts at a glance

 

The information throughout this article is not exhaustive. To continue your research, it’s worth reviewing each account’s terms and conditions along with their fees & charges, or contacting the bank directly.

Allica Bank business current account

Allica’s Business Rewards Account (the product name of its current account) is designed for established SMEs who have been incorporated for a minimum of 12 months, typically keep a balance of £50,000 or more in their account or have a loan product with us. 

These established SMEs have been in an unfortunate grey zone when it comes to banking. They’ve been seen as too small (in terms of revenues) for bespoke corporate banking, but their needs are too unique to be met by repurposed retail banking products.

Notable features and important information

• Instant Access Savings Pot with 4.33% AER interest rate*
• Every customer gets a dedicated relationship manager.
• Cashback on qualifying expenditure.
  • 1% cashback below £10,000 spent.
  • 1.5% cashback above £10,000 spent.
• No monthly fees*
• UK customer support team.

*See a full list of limits, fees, and industry restrictions here, or our current account key product information, or terms & conditions, or savings pot key product information, or supplemental terms & conditions.

Rate correct as of 1st March 2024. 'AER' stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. Businesses keeping less than £50,000 in the account may earn a reduced rate of interest and may incur fees.

Bank of Scotland business current account

To open this account, your turnover must be under £25,000,000. Bank of Scotland also offers specific accounts for schools, credit unions, and treasurers. It’s worth noting, for the closeness of their names, that Bank of Scotland and Royal Bank of Scotland (RBS) are entirely separate banks.

Lloyds Banking Group owns Bank of Scotland, as well as Lloyds Bank (and others). As a result, Bank of Scotland and Lloyds’ business accounts share some common features.

Notable features and important information

• Relationship team for business help and support.
• Free Business Finance Assistant accounting software.
• Sole traders or companies with a sole director whose turnover is under £3,000,000 can apply quickly in-app.
• Product Specific Conditions.
• Account Charges and Processing Times.

Barclays business current account

Barclays offers a start-up account, as well as established business, charity and impact accounts. Their start-up account is only available to businesses in their first 12 months of trading; all other businesses should access the established business account.

Businesses with an annual turnover above £400,000 can request a callback to make their application.

Notable features and important information

• Free subscription to Freshbooks accounting software for as long you retain your account.
• Eagle Labs accelerator programme for startups, business growth coaching programmes for growing businesses, relationship teams for established businesses.
• Partner marketplace for business services, with discounts and integrations.
• Terms and conditions.
• Rates and charges.

HSBC business current account

HSBC has a range of business accounts, including the Kinetic Current Account (for sole traders or single-director limited companies), Small Business Banking (borrowing up to £100,000), Business Banking Account (borrowing over £100,000), as well as charity and corporate accounts. The bank is set up to support businesses of all sizes.

Notable features and important information

• Annual fee waived for first year of Visa Commercial Card.
• Dedicated Relationship Manager (with Business Banking Account), Specialist support teams (with Small Business Banking Account).
• UK support teams.
• Business Banking terms & conditions.
• Business Price List.

Lloyds Bank business current account

The main eligibility criteria for Lloyds’ business account is that your annual turnover must sit below £25,000,000.

Lloyds and Bank of Scotland are both part of Lloyds Banking Group. As such, their products share a lot in common - for example, the fees tariff for Lloyds’ business account is almost identical to Bank of Scotland’s.

Notable features and important information

• 12 months with no account fee.
• Relationship team for business help and support.
• Free Business Finance Assistant accounting software.
• Product Specific Conditions.
• Account Charges and Processing Times.

Metro Bank business current account

Metro’s business bank account is a one-size-fits-all product for any sole trader or company with an annual turnover below £2,000,000.

Metro retains 76 branches in the UK, predominantly in London, Greater London, and the Midlands. Customers can bank in-store or online. According to a press release dated July 2023, the bank intends to open 11 new branches in the north of England in 2024 and 2025.

Notable features and important information

• Open an account same-day in-branch, including debit card printing.
• Local business managers in each branch.
• Free access to Invoice It (invoicing software, in collaboration with BankiFi).
• Service Relationship guide.
• Transaction and service charges.

Monzo’s business current account

Monzo is another branchless, digital bank. Their business account is the same product for sole traders and limited companies, but certain payment limits change depending on your incorporation status.

The current account is free, but can be upgraded to Pro (for features including invoice generation, accounting software generation and multi-user access) for £5 per month.

Notable features and important information

• 24/7 customer support team.
• Payment links.
• Accept contactless payments with your own Apple or Android device and receive direct card payments.
• Business account terms and conditions.
• Business account fee information.

Natwest business current account

As well as its primary Business bank account, Natwest also offers a Start-up account, Mettle (self-employed) account, and Community account. In this sense, there’s something for every business with NatWest. Each account is designed to provide relevant features for businesses of different types and at different stages.

Natwest is owned by Natwest Group, a holding company that operates several banks, including Ulster Bank and Royal Bank of Scotland. Business current account products across these three banks share many common features, but should not be thought of as identical.

Notable features and important information

• Free subscription to FreeAgent accounting software for as long as you retain your account.
• Two years of free banking on everyday transactions (for customers joining via Current Account Switching Service and with turnover below £2m).
• Entrepreneur Accelerator programme to connect with peers and experts.
• Business account terms.
• Business Account charges booklet.

Revolut business current account

Revolut positions itself as a leader for international payments. If you trade internationally, this could be useful for you.

It’s important to note that Revolut does not have a banking licence in the UK and operates as an e-money institution in the UK. E-money institutions are regulated by the Financial Conduct Authority (FCA), but deposits are not protected under the Financial Services Compensation Scheme (FSCS). Revolut ‘safeguards’ funds by either:

• Holding them in a dedicated client money bank account with a large global bank, or
• Investing them in low-risk liquid assets held in a dedicated client asset account with a large global financial institution.

Depending on your risk appetite, these safeguarding measures may be sufficient or you may not feel comfortable without direct FSCS protection.

Revolut’s banking licence application has been pending with the UK regulator since January 2021, while it has been licensed in the European Union since 2018.

Notable features and important information

• 100+ countries and 25+ currencies supported for payments.
• Instant business payments with its Revtags feature.
• Multiple ways to accept payments, from QR codes to physical card readers.
• Business terms.
• Business account pricing.

Starling Bank business current account

Starling Bank is one of several digital banks on this list, with no physical branches. Starling offers two lookalike business accounts - a Sole Trader Account and a Business Account (for limited companies).

On top of its free business banking product, customers can add monthly subscriptions. These include: Business Toolkit (a suite of features including invoice generation, HMRC tax calculation and VAT tracking) for £7, EUR account for £2 and USD account for £5.

Notable features and important information

• 24/7 UK customer support team.
• Savings spaces for separating funds (e.g. for tax).
• Spending analytics, to track current and historical trends.
• Current account terms and conditions.
• Rates, fees, and charges.

Tide business current account

Tide is a FSCS protected ClearBank product, spun out into its own brand. With four tiers of product available, Tide claims to scale with your business as it grows.

It’s important to note that Tide itself is not a bank, but offers business bank accounts through ClearBank. Tide is, effectively, a wrapper for a ClearBank product. Tide does offer its own e-money accounts, which aren’t the same as current accounts.

If you open an e-money account with Tide, your money will not be directly protected by the Financial Services Compensation Scheme. Tide will hold any e-money deposits in a separate ‘safeguarding’ account, operated by a FSCS-registered bank. For some business owners, this level of separation may feel too risky. For others, it may not be a concern.

Notable features and important information

• Support with trademark filing and disputes.
• Features include invoice templates, virtual office address, and company name checks.
• Integration with Companies House, allowing customers to open an account and incorporate a limited company at the same time. Tide pays the incorporation fee for the customer.
• Tide terms.
• Tide pricing.

TSB business current account

TSB’s business account is offered under the product name ‘Business Plus account’. The bank did historically offer a range of tariffed accounts, but these are no longer available for new customers,

The bank has partnered with several business service providers to offer a network of either integrated or discounted products.

Notable features and important information

• 30 months’ free day-to-day banking for new customers.
• Partner marketplace, providing discounts, special offers and integrations.
• Partnership with Square, offering one of a free Square reader, £5,000 of fee-free sales, or a 30% discount on a Square Terminal.
• Business Banking Charges Guide.

Virgin Money business current account

Virgin Money offers three different current accounts for businesses; M Account for Business (for businesses with an annual turnover under £1,000,000), Business Current Account (annual turnover under £6,500,000) and Business Choice Account (turnover over £6,500,000).

Notable features and important information

• 25 months' free day-to-day banking, for new customers and new businesses.
• Three free months of QuickBooks or Xero accounting software.
• Online resources and events from Virgin StartUp.
• Business current account terms and conditions.
• Business banking tariff guide.

How to choose the best business bank account

The idea of the best business bank account is subjective. That’s the first thing to keep in mind for your search: what works for one business might not work for yours.

As with so many of the challenges in business, the first step is to understand what’s important to your business and how your bank account can play a role in reflecting (and elevating) that.

Different banks will suit different situations, so it’s worth reflecting on where you are and what you need. Are you feeling frustrated about something with your current banking provision?

• Not maximising returns on surplus cash?
• Limits or delays with international transfers and deposits?
• Wanting more in-branch support and/or dedicated relationship management?

Using the table above (and your own research), you can identify which banks are offering more of what you need.

Nida Sattar, our Head of Product for Payments, shared her view on how SMEs can choose their next banking provider:

“Customers need to think about the overall picture: what bank account provides me with the best value, convenience and relationship banking to address all my needs? Which bank has the most ‘can do’ philosophy? Do you get a dedicated relationship manager, who is not only approachable, but can anticipate your needs and is proactive?

Of course, value matters too; market leading interest rates and cashback and fees are important and help you get the best return on your hard earned money.”

Recommendations can be helpful, but don’t take them as gospel. After all, a computer repairs company and a pork pie manufacturer are going to have very different operations. As a result, a ‘good’ bank for one might offer nothing useful for another.

What exactly is a business bank account?

A business bank account is a dedicated current account for all your commercial income and expenditure.

It’s entirely separate from your personal banking, which is good for many reasons (and a legal requirement for limited companies). You should not use your business account for any personal or non-business expenses.

Most banks offer business bank accounts, as well as their retail products. Some banks offer business banking exclusively.

How do business current accounts work?

At a basic level, your business current account works the same as your personal current account, in that you use it to send and receive money. Beyond the basics, though, business accounts are stacked with uniquely helpful features.

You can connect to accounting software, process large and mass payments and some even come with specialist business support and relationship managers.

In 2024, most business bank accounts come with online banking. High street banks still allow you to bank in-branch, but many challenger and digital banks are online-only.

Key benefits of a business bank account

A business bank account should do more than just let you send and receive money. A great bank can help you finance your growth ambitions, invest in assets and technology, manage your day-to-day cash flow and, ultimately, prepare and plan for the future.

Gareth Anderson, Allica Bank’s Head of Business Management, shared a valuable insight about the benefits of business accounts:

“It’s important to focus on what matters for your circumstances. All business owners will have different financial needs and goals.

If you are holding high levels of surplus cash then the focus might be on finding an account that pays a high savings interest rate, or a fee-free bank account could be more important if you’ve just started out.“

As Gareth so rightly highlights, the ‘best’ business account depends on the nature of your business and needs. That being said, some of the most universal benefits that come with business bank accounts include:

• Enhanced fraud protection and insurance coverage
• Integrations with accounting software (eg Xero or Sage)
• Controls, permissions and mandates for multi-owner businesses
• Legal compliance for limited companies and regulatory assurance
• Access to commercial products (e.g. asset and mortgage finance)

How to open a business bank account

Every bank has its own approach for new customers opening an account, with different eligibility criteria and processes to follow.

With Allica Bank, for example, you apply for a Business Rewards Account using a simple online form and our team will then be in touch with you to complete your application.

You’ll typically be asked to share:

• Your status as an authorised person to act on behalf of the business.
• Proof of business address and incorporation.
• Your source of funds for the initial deposit to the account and how it will be used thereafter are not the proceeds of criminal activity.
• Documentation and evidence for the purposes of anti-fraud and other checks.
• Information about your business, employees and turnover.

How to switch business bank accounts

If you’ve ever changed personal accounts, you probably know about the Current Account Switch Service (CASS).

The good news is, CASS is available for businesses - with a few conditions. 

Not all banks are registered with CASS. If you want to enjoy the benefits of CASS, make sure both the banks you want to leave and join are signed up to the service.

The Current Account Switch Service for businesses

CASS is a free service that streamlines the complexities of switching business current accounts, including:

• Moving your direct debits, regular payments, and balance to your new account.
• Transferring any funds that are accidentally paid into your old account to your new account.
• Guaranteeing your new account will be switched and operational by a certain date.

To be eligible for CASS’ business current account service, you must have:

• Fewer than 50 employees, and
• An annual turnover not exceeding £6.5 million

If your business bank isn’t registered with CASS

If one or both of the banks aren’t registered with CASS, you’ll need to manually cancel your direct debits and regular payments and re-establish them with your new bank.

You’ll also need to transfer your balance and ensure that all debtors and customers are aware of your new banking details.

You’ll also have to set your own final crossover date for your accounts.

If your business isn’t eligible for CASS

You should talk to your new bank about any internal systems they have in place for facilitating account switches.

Some banks offer partial switches. These involve some (not all) of the features of CASS and operate on a longer timeline than CASS’ seven days.

It’s worth doing your research and asking your new bank for their help. Their service levels may change depending on business factors, such as your turnover or employee size.

Business bank account FAQs

By now, you should have a pretty good idea of what’s on the market right now. If nothing else, you’ll see why it’s worth doing your research to find the right bank for you.

Before you get stuck halfway through an application, check out the FAQs below to fill in any last gaps in your knowledge.

What fees can I expect with a business current account?

Most business bank accounts have a fee attached to them, but the exact figure can vary quite widely.

You can expect fees across the following areas for business bank accounts:

Account fee

This is a monthly charge for general access to and use of your current account. Account fees are generally fixed, regardless of your level of activity or funds in the account.

Transaction fees

Banks can charge for different types of transactions, including processing cheques, standing orders, and CHAPS.

Deposit and withdrawal fees

If you’re withdrawing cash from a cashpoint (or even a cashier in-branch), you may face a nominal charge.

Similarly, if you’re depositing cash takings, some banks charge for that service. Deposit fees are sometimes activated only after you exceed a set limit (whether that’s in a single deposit or across a year).

Overdraft fee

If you open an overdraft facility with your bank, they will likely charge you overdraft fees and interest on the amount by which you are overdrawn.

Other fees

These can include foreign transactions (transactions fees and currency conversions), ordering new cheque books, or closing your account.

We’ve listed some of the fees involved with popular business current accounts above, but it’s not exhaustive. It’s worth doing your own research if you’re worried about specific fees or ones we may not have included. Look for a document titled ‘Fee schedule’ (and the account terms and conditions) that you’ll receive in the application process.

Can I use a personal bank account for my business transactions?

The answer is different for sole traders and for limited companies.

Limited companies cannot use personal accounts

Legally, limited companies cannot use personal accounts; they must hold a dedicated business account.

The nature of a limited company is that it is a separate entity to the shareholders or guarantors operating it; using a personal current account would contravene this principle.

Sole traders can use personal accounts

Sole traders can use their personal bank account for business transactions. Whether it’s a good idea is a bit more up for debate.

You need to maintain accurate bookkeeping records for your financial planning and tax returns. As a result, mixing your personal and professional income and expenditure is risky.

This can get quite complicated and the possibility of missing a transaction could have significant consequences.

How long does it take to open a business bank account in the UK?

The time it takes to open a business account is hugely variable, especially in the post-pandemic years.

It’s been reported that some high-street banks are taking two to three months to open new business current accounts.

In comparison, the waiting time is much reduced with digital and challenger banks – days or weeks, rather than months.

In early 2024, Conrad Ford (Chief Product Officer at Allica Bank) explained the cause of these delays to the Institute of Chartered Accountants in England and Wales:

“The government guaranteed schemes – Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) – generated 10 or 20 years of SME lending volume in the space of one year. The high street banks were the heroes of the hour, but the operational overhead of working through millions of loans has really weighed them down – now and for the future.”

What are the benefits of a bank relationship manager? 

Go back 20 or so years and every business had a bank manager or adviser they could speak to in their local branch. Today, the human touch is lacking in a lot of business banks.

In 2024, it’s relatively simple for businesses to trade nationally and internationally. Having somebody to speak to in your local bank matters less, but SMEs still need genuine, personalised support from their bank.

A relationship manager serves the purpose that branch managers used to. They get to know your business, have connections in the local area, and can provide streamlined support within your bank.

Having a relationship manager means having someone in your corner and a proactive partner to your business. They’re not available with every banking provider, but, where they are, they add a huge amount of value to UK businesses.

Making an informed decision

Wherever you are in the process of your business journey, your choice of bank account can potentially steer you in the right direction.

We’ll leave you with another valuable message shared by Gareth Anderson and wish you the best of luck in your business banking search.

“When choosing a current account for your business, it’s important to start from a place of recognition that a bank account is an enabler to helping you achieve your financial goals and business ambitions.”

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Links were live and information was correct at the time of writing the article.