Top 10 UK small business bank accounts

Business Banking: Top 10 UK small business bank accounts

Whether you are setting up a new company, or re-assessing your firm’s financial arrangements, choosing the bank that suits the enterprise’s needs is key to success. Many well-known banks are offering their services, and here we will take a look at ten popular business bank account options available to entrepreneurs.

1. HSBC

Free banking is available for start-ups in the first 18 months, while new customers from existing businesses get the first 12 months without charges. Once fees commence, there is then an annual review. Turnover should be under £2m to benefit from these offers with deposits of up to £3,000 per month going uncharged. After this period, fixed-price charges will apply. At this point, you can choose between rates on cash and electronic transfers best suited to your regular transactions.

2. Barclays

The same fee-free 12-month period applies for new businesses, and Barclays promote the services of their business managers who can support you as your business grows. Existing businesses transferring to Barclays will not benefit from this deal. However, depending on the business’s turnover, some charges are refunded. This loyalty bonus depends on how long the account has been operating, and refunds can range between 5%-50% of charges. 

Check fees for the different credits to your account, cheques or e-payments will attract different costs. According to the Competition and Markets Authority, Barclays is top-rated for online and mobile banking services.

3. Santander

Here two options are available, the Standard Business Account and a 1|2|3 Business Account. The 1|2|3 account comes with an arranged unsecured overdraft facility which can rise to £25,000 depending on your credit history. No minimum deposit is required. The 1|2|3 account offers an attractive cashback facility, dependent upon how much you pay into your account during the year. Rates vary between 1%-3% and begin with receipts of £10,000.

4. NatWest-RBS

NatWest-RBS also offers two options: Start-up and Business Account. The first is available for those trading for less than a year and provides 18 months’ free banking if your turnover is under £1m. After that, standard charges will apply. 

The Business Account is available for businesses operating for a minimum of 12 months with a turnover under £2m. The bank offers an award-winning mobile banking app recognised at last year’s British Banking Awards. Your allocated business manager will also discuss card arrangements with you, potentially extending your overall credit facility.

5. TSB

TSB offers 18 months’ free banking for both limited companies and sole traders. Although electronic facilities are available, you may prefer to bank in a branch to develop a closer relationship. TSB has 550 branches around the UK and also offers the option to bank at a further 11,500 post offices which may be an attractive option. A choice of tariffs is available once the free banking period comes to an end.

6. Lloyds/Bank of Scotland

New businesses get 18 months’ free banking if they have a turnover under £3m with the Business Current Account, whereas if you are switching, that period is reduced to six months. The bank offers flexible support for businesses and major credit card facilities may be available depending on your firm’s credit rating.

7. Handelsbanken

Although this may be an unfamiliar name, the Swedish bank has had a presence in the UK since 1982 and has over 200 branches across the country. The Competition and Markets Authority listed it as the top-rated bank in 2019 for customer satisfaction with an 85% score. Handelsbanken has both an Apple and Android banking app and offers a VISA business debit card as well as a multi-pay card. Lending and loan facilities are available as well as an invoice discounting scheme. 

Now to take a look at online facilities and disruptive entrants, here are some examples.

8. ANNA 

ANNA stands for Absolutely No-Nonsense Admin and offers a mobile business account accessed by an app. Note that ANNA is not a bank but in its own words, a business current account and a digital admin assistant. A business Mastercard is available via a business partner. If you are happy with no in-branch interaction, ANNA may be a suitable option for you.

9. Revolut

If you travel and do business overseas, this may be a good option. Customers can manage 29 currencies with the real-time exchange rate. Free corporate cards are available for staff, cutting expense charges. Euro and Sterling accounts are available with individual IBANs.

10. Starling Bank

Starling offers free banking for firms with less than ten employees and turnover under £1.7m. Larger firms can get a time-limited fee-free offer. Unlike many other online options, you can make deposits at over 11,500 Post Offices.

It is well worth spending some time researching the various offers that are available on the market. An online solution may very well suit your business, and you may not require the bricks and mortar and associated expense of a High Street entity.

However, it is essential not to underestimate the benefit you may obtain in having a dedicated business manager who may be able to offer you advice and some degree of support during challenging periods. 

Finally, the ownership or underwriting of online entities is by no means always clear, and this may be a concern for some. Always check reviews from other clients and ensure that they operate within the relevant country regulatory framework.

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