Business bank accounts

Compare business bank accounts

The best business bank account for you will depend on how you manage your company’s finances. MoneySuperMarket’s comparison service will help you find a business account that suits your needs

With so many to choose from, picking the business bank account that best suits your needs can be quite the challenge. That’s where MoneySuperMarket can help. We list business accounts from across the market, giving you the facts to make an informed decision.

The table below will help you find the best account for your business by comparing offerings from a number of providers. You can see the main pros and cons of each account, and compare features such as free business banking, interest on in-credit balances, overdraft facilities and free account transactions.

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What is a business bank account?

Business bank accounts work much like personal bank accounts, though they’re available to sole traders, partnerships, companies, clubs, societies and charities alike.

They’re also a legal requirement if you want to set up a limited company, while if you’re self-employed, opening a business bank account is an easy way to keep your business transactions separate from your own personal finances.

Having a business bank account also lets you apply for a business credit card, and will make it easier to apply for business loans such as the government’s Bounce Back Loan or certain other schemes designed to help companies affected by Covid-19.

What are the benefits of a business bank account?

There are numerous advantages to opening a business bank account. The main benefits include:

  • Invoices are paid directly into your business account
  • Separates your personal finances from your business finances, and making it easier to do your tax returns
  • Builds up your business’s credit history so you can apply for other business finance products in the future
  • Bespoke features that make paying employees much easier

How do I choose the best business bank account?

Certain business bank accounts come with additional benefits depending on which package you pick, though some may require you to pay a modest monthly fee. These are the benefits that will ultimately determine your choice: just as every business is different, there are different types of account which cater to businesses in different ways.

  • Overdraft: An overdraft might be useful if you have tighter cashflow and need the occasional buffer. Check to see how much will it cost before you apply
  • In-credit interest: Some accounts let you earn interest on the money that sits in your business account balance, which is good if you’re always in the black
  • Convenience: Do you prefer to bank digitally or do you need to pay in lots of cash and cheques?
  • Business support: Many accounts will offer access to business and tax advisers, which can be very useful to newer businesses, or people who struggle to understand the legislation
  • Account fees: Many business current accounts charge monthly fees, while some also impose fees for different types of transactions. Are the benefits you get from the account worth the cost?

Compare business bank accounts

You can compare business bank accounts quickly and easily with MoneySupermarket. Our comparison tables help you to choose the right business account for your needs by showing you the pros and cons of a wide range of accounts.

Once you’ve identified the best business account for your company, just hit ‘Go to site’ to apply. Then simply enter a few details about you and your business. In most cases, the application process will only take a few minutes.

Business banking tips

  • Use this account for all your business transactions: Pay your employees, have invoices paid in, receive cash and electronic payments, pay in cash and cheques, draw money out and transfer money electronically, set up business direct debits and standing orders with your business account.
  • But not for your personal use: You’ll need to use your account for business purposes only. You won’t be able to use your business account for personal banking.
  • Business banking fees: You may have to pay a transaction fee for cash, electronic and cheque payments that are paid both in and out of your business account. Many accounts also have a monthly or annual fee – although some business account providers offer free business banking for an introductory period of say six or 12 months. In this case, it’s important to check how much you’ll end up paying once the introductory period is over.
  • Business account rules: If you choose a business bank account that’s fee-free, you should also check the limitations on how much and how you can pay in and withdraw money from your account. If the account has an overdraft facility, it’s also worth checking the limitations.
  • Business banking support: Some banks have a dedicated small business advice team, while others offer a telephone helpline, or an online accountancy service. Consider which types of advice or support will be most useful to your business.
  • Digital-only banking or high street banking: You can open a business account with your personal high street bank account provider, a different high street bank provider, or, if you’re a sole trader or the owner of a limited company, a digital-only bank. The right choice for you will depend on the type of company you have and how you plan to use your business bank account.

Do I need a business bank account?

You are legally obliged to have a business bank account if you have a limited company. That’s because a limited company, or a Limited Liability Partnership, is a separate legal entity from you as an individual, and as such it needs a separate business account.

Do I need a business account as a sole trader?

As a sole trader, or self-employed person, you are not legally obliged to have a business bank account. Your business and personal income are treated in the same way by the tax office, so you can use your personal bank account for business transactions. Partnerships, which are effectively two or more sole-traders, may also choose to operate through a joint personal account.

However, many sole traders and partnerships prefer to keep their business finances separate by opening a business bank account. Advantages can include being able to deposit money under your trading name and having access to more detailed transactional data.

What’s the difference between a personal bank account and business bank account?

A personal bank account allows you to receive and pay out money in your name. Many personal bank accounts therefore offer features to help you manage your personal finances.

A business bank account allows you to receive and pay out money in your company’s name. The account features will be designed with business use – such as payroll and invoicing – in mind, and will often have fees attached. Many business current accounts also have monthly fees.

How do I open a business bank account?

You can generally open a business bank account online or in your local branch. How you open your account will depend on the type of bank you choose. Some high street banks may prefer you to open an account in person; digital banks operate solely online, so the application process is online too.

What do I need to set up a business account?

The type of documents and proof you need to open a business account will depend on the type of company you have, but you’ll always have to provide your business details, as well as personal details for anybody included in the application.

If you have a private limited company or a limited liability partnership, you’ll also need your company’s registered name and address, date of incorporation and company registration number when applying.

Can you open a business account with bad credit?

If you have a bad credit history then you will probably find it more difficult to open a business bank account, especially if you’ve been bankrupt in the past five years or have a County Court Judgement (CCJ). If this is the case, you might find it easier to open a business account with your current account provider. Alternatively, you can apply for a business bank account with a provider that does not run credit checks.

Taking steps such as paying back any credit you owe on time and making sure you’re registered on the electoral roll can help to improve your credit score, which can increase your chances of being approved for a business account in the future.


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