The Best Business Bank Accounts & Alternatives To Consider

Euan Robb
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Content Manager at Equals Money
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10
min read
Publish date
01/03/24

The importance of having a business bank account or alternative

A business bank account or suitable alternative from a reputable financial institution is essential for any business, providing a separate and distinct way to manage finances.

For sole traders, having a business bank account is optional, but still highly recommended. It can help keep business and personal finances separate, making it easier to track expenses and revenue for tax purposes. Additionally, it can give a more professional appearance to clients and vendors.

For limited companies and partnerships, having a business bank account is necessary. It is a legal requirement to keep personal and business finances separate, and having a designated business account separate from a personal bank account can also make it easier to manage payroll, make payments, access credit when needed. Furthermore, as well as providing efficient financial management, it can add a layer of protection for personal assets in the event of business debts or legal issues.

Regardless of the type of business, a business bank account offers benefits such as easier accounting and tax preparation, increased professional credibility, access to business-specific financial services, and improved financial management and organisation.

Opening a business bank account is a straightforward process, and the potential advantages make it a crucial step for any business.

 

Traditional Business Bank Accounts

Traditional business bank accounts offer a variety of features to help organisations manage their finances. With these accounts, businesses can easily make bank transfers such as deposits and withdrawals, allowing for seamless cash flow management. These accounts also allow for the separation of personal and business transactions, making it easier to track and manage business expenses.

Similar to personal accounts, business bank accounts also offer basic banking services such as direct debits, mobile banking, and debit cards. However, they also provide additional features specifically tailored to businesses. These may include invoicing services, accounting software integration, and tools for tax calculation and reporting.

In summary, traditional business bank accounts function similarly to personal accounts but also offer additional features to help businesses manage their finances more effectively. With features such as invoicing, international transactions, and tax calculation, these accounts can streamline financial processes and provide valuable insights for business owners.

 

Business Bank Accounts from Online Banks

Business bank accounts offered by online banks provide numerous benefits for business owners.

These accounts allow for easy and convenient deposits and withdrawals, as well as the ability to transfer money between accounts. Many online banks also offer a business debit card, giving account holders the flexibility to make purchases and withdraw cash as needed.

In addition to these basic features, some online banks offer additional tools such as invoice creation and tax calculation to streamline financial management for small businesses. These features can help business owners stay organised and save time on administrative tasks.

Popular online banks that offer business accounts include Starling Bank, Monzo, and Tide. These banks offer a range of features and benefits tailored to meet the needs of different businesses. By comparing the features offered by each bank, business owners can find the best option for their specific needs, whether it's low fees, easy online access, or specialised tools for financial management.

With the convenience and flexibility of online banking, business owners can easily manage their finances from anywhere, at any time.

 

Allica Bank - Business Reward Account

The Allica Bank Business Rewards Account is designed to offer small and medium-sized businesses a range of benefits to help manage their finances. With no monthly fees, the account provides up to 1.5% cashback on all eligible purchases, allowing businesses to earn rewards on their everyday spending. In addition, account holders have access to local relationship managers who can provide tailored support and guidance to help businesses thrive.

However, it's important to note that there are limitations with the account.

To be eligible for an account, eligibility criteria and T&Cs will apply. Your business must have an annual turnover greater than £500K or more than 5 employees and your business must be over 1 year in age. Cash deposits and cheque deposits are not available and Allica Bank doesn't offer an overdraft facility.

Overall, the Allica Bank Business Rewards Account offers valuable features such as cashback and access to local relationship managers, but it's important for businesses to be aware of the limitations when considering this account for their financial needs.

 

Barclays - Business Current Account

The Barclays Business Current Account is designed to support businesses with a range of features and benefits.

New businesses can enjoy 12 months of free banking, allowing them to manage their finances without incurring any fees.The account also offers 24/7 online and mobile banking, providing convenient access to manage transactions and monitor balances at any time. Additionally, Barclays provides business finance and savings accounts to help businesses achieve their financial goals.

However, there are some potential drawbacks to consider. After the initial 12 months, there is a monthly fee of £8.50 for the account, which could impact the overall cost for businesses. There are also charges that may apply for some cash and cheque transactions, as well as for international and CHAPS payments, which businesses should take into account when considering this account - particularly those with a global footprint. Please note that if your business has an annual turnover greater than £400K, you need to request a callback to apply for a business account.

Overall, the Barclays Business Current Account offers a range of valuable features and benefits for businesses, including free 12 months of banking for new businesses and convenient online and mobile banking. However, it's important for businesses to carefully consider the potential drawbacks, such as the monthly fee after the initial 12 months and potential cash transaction charges, before choosing this account for their financial needs.

 

Cashplus - Cashplus Business Account

The Cashplus Business Account is designed to provide organisations with essential banking services with no monthly or annual fees.

The pricing structure for the Cashplus Business Account is transparent, with no monthly management account fees or UK purchase transaction charges. With no credit check required in the application process, businesses can simply apply using the instant online application. Cashplus also offers easy cash deposits available at any UK Post Office and efficent financial management with both online banking and a mobile app available.

However, businesses should be aware that the first 3 payments sent every month are free but for every transfer thereafter a transaction fee of £0.30 applies.

Overall, the Cashplus Business Account offers businesses the flexibility and convenience they need to focus on their operations without worrying about complicated financial management and banking processes. With no monthly fees, the ability to deposit cash at UK Post Offices, essential banking services, and free card transactions in the UK, it's a comprehensive solution for small businesses.

 

HSBC - HSBC Kinetic Business Current Account

Introducing the HSBC Kinetic Business Current Account, the perfect financial solution for small businesses. With a swift application process, you can apply for your account in-app, in minutes, and start managing your finances with most accounts opened within 48 hours.

With the HSBC Kinetic Business Current Account, you'll have the convenience of in-app overdraft eligibility, allowing you to access additional funds when you need them. Take control of your financial management and business expenses with categorised spending insights, providing you with a clear overview of where your money is going. With the HSBC Kinetic Business Current Account, managing your business finances has never been easier.

However, the HSBC Kinetic Business Account is only available to sole traders or limited companies that have one director who is the sole shareholder. Your business' annual turnover must be below £6.5m and to be eligible, you must be a tax resident in the UK, but not the Channel Islands or the Isle of Man.

Don't miss out on the opportunity to streamline your business banking with the HSBC Kinetic Business Current Account.

 

Mettle by Natwest - Business Bank Account

Mettle by Natwest's Business Bank Account offers a range of features and benefits designed to meet the needs of small businesses and freelancers. With its free account options, users can manage their finances without incurring any monthly charges.

The maximum balance for the account provides flexibility for businesses to manage their funds effectively. While the availability of banking services is limited compared to traditional business accounts, Mettle's online banking platform still allows users to make payments, track expenses, and view real-time insights into their financial performance. Additionally, customer support is easily accessible through various channels, ensuring that users can receive assistance whenever they need it.

Overall, Mettle by Natwest's Business Bank Account provides a streamlined and cost-effective solution for small businesses and freelancers looking to manage their finances efficiently.

  

Monzo - Business Lite

Monzo Business Lite account offers a variety of features and benefits for small businesses. The account is easily accessible through the Monzo mobile app, allowing users to manage their finances on the go.

With Monzo Business Lite, easily Set money aside for a business 'rainy day' , separate from your balance, with Savings Pots.

One of the limitations of the Monzo Business Lite account is the fees on inbound international payments. While domestic payments in GBP and instant UK bank transfers are free, international payments are charged a 1% fee per transaction that;'s capped at £1000. This may be a drawback for businesses with significant international transactions.

Overall, Monzo Business Lite is a convenient and straightforward option for small businesses, offering accessibility and simplicity. However, businesses that heavily rely on international payments may need to consider the limitations of this account.

 

Starling Bank - Business Current Account

The Starling Bank Business Current Account offers a range of features for eligible businesses, including free monthly account fee, 24/7 account management, and the requirement for businesses to be registered as Limited Companies or LLPs. This account also offers optional paid add-ons for additional features, such as the ability to connect with accounting software.

Pros of the account include the free monthly fees and the 24/7 account management, while cons may include the fees associated with certain account activities. Businesses can also benefit from the availability of 24/7 customer support, as well as the ability to access optional paid add-ons for more comprehensive features and seamless integration with accounting software. Accounting integrations include QuickBooks accounting software, Xero accounting software, and FreeAgent accounting software.

Overall, the Starling Bank Business Current Account is a convenient and flexible option for businesses looking for a modern banking solution with 24/7 access, no monthly account fee, and the ability to customise their account with optional paid add-ons.

 

Tide - Business Current Account

Tide's Business Current Account offers a range of features designed to make managing your business finances easier.

There are no monthly fees and the account can be managed conveniently through the Tide mobile app, which allows for easy invoice creation, expense categorisation, and instant notifications for transactions.

Customer reviews for the Tide Business Account are generally positive, with many users praising the user-friendly interface and helpful customer support. In addition, the account offers seamless integration with Sage, QuickBooks, Xero and more for easy reporting.

However, please note that to apply for a registered business account you need to be registered with Companies House as a director of that company and bank transfers in or out via UK Faster Payments/BACS/CHAPS are charged at 20p each.

Overall, Tide's Business Current Account provides a comprehensive range of features and benefits, making it a popular choice for small businesses and freelancers.

 

Virgin Money - Virgin Money Business Current Account

The Virgin Money Business Current Account offers small businesses a host of features and benefits to help manage their finances.

The account also comes with a user-friendly mobile banking app, allowing businesses to manage their finances on the go, make payments, and track transactions efficiently. This feature offers convenience and flexibility for businesses that are constantly on the move.

Furthermore, the Virgin Money Business Current Account offers cashback on transactions, giving businesses the opportunity to earn rewards on their regular spending. This provides an added incentive for businesses to use the account for day-to-day operations.

 However, to be eligible your business must have an annual turnover of less than £6.5m per annum and you must be based and operate in the UK (excluding Channel Islands, Isle of Man and Northern Ireland).

Overall, the Virgin Money Business Current Account provides a cost-effective and convenient solution for businesses to manage their finances, with a range of features designed to support their financial needs.

 

Equals Money - a great alternative to a business bank account

 Of course, a business bank account isn’t the only way to move and manage your money.

If you’re looking for an alternative, check out an Equals Money multi-currency busines account. It’s not a bank account, but it does offer many features to streamline financial planning, expense management, and international transfers.

 

Tried and trusted, we’ve helped our customers move over £10 billion around the world since 2005.

  • Open single or multiple own-named multi-currency accounts to send, receive, and manage funds in a wide range of different currencies (38) and allow business operations in local currencies (such as receiving payments from customers) without the need for conversion.
  • Take control of your global business expenses with unlimited prepaid expense cards to use around the world (wherever Mastercard is accepted) so you can spend across 20 major currencies with no transaction fees and monitor payments in real time using our online platform, featuring multi-user access and login.
  • Enable your business to expand into new global territories with the ability to process same-day and next-working-day transfers, with access to SWIFT, UK Faster Payments, and SEPA for faster settlements.

With your own dedicated account manager and access to our in-house currency expertise, we’ll be on-hand to answer any questions, explain processes, and work to understand your business needs.


Sources used for this article:

  1. Allica Bank - Business Reward Account
  2. Barclays - Business Current Account
  3. Cashplus - Cashplus Business Account
  4. HSBC - HSBC Kinetic Business Current Account
  5. Mettle by Natwest - Business Bank Account
  6. Monzo - Business Lite
  7. Starling Bank - Business Current Account
  8. Tide - Business Current Account
  9. Virgin Money - Virgin Money Business Current Account
  10. MoneySuperMarket - Compare Business Start Up Current Accounts

Sources checked on 01/03/2024


This publication is intended for general information purposes only and should not be construed as legal, tax, or other professional advice from Equals Money PLC or its subsidiaries and affiliates.

It is recommended to seek advice from a financial advisor or other professional. We do not make any representations, warranties, or guarantees, whether expressed or implied, regarding the accuracy, or completeness of the content in the publication.

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