Which is the best bank account for your UK business in 2018?
Finding the right bank account can be an incredibly important decision for your business. All UK businesses (unless you are a sole trader) are legally required to have a dedicated business bank account and each of the major banks, along with some lesser known names, have a range of specialised business bank accounts on offer. However not all business bank accounts are created equal, so it is important to compare accounts before choosing the right one for your business.
What to look for in a business bank account
There are several key features which most business bank accounts will include, but the specifics of these can vary from account to account.
Fees
Most business bank accounts come with a monthly fee. This usually ranges from around £5 to £15, but can be much higher for larger businesses with higher turnovers and more complex banking requirements. To entice new customers many banks offer an initial period of fee free banking for between 12 to 25 months, although it is important not to get carried away with the length of the fee free term and to check what the standard fees will be after this.
Transaction charges
These are variable charges that are additional to the monthly fee that may be levied on certain operations such as foreign currency transactions, overdraft fees, CHAPS payments and change-giving fees. If you are likely to be doing any of these regularly it is important to find a bank account that either provides these services for free or for a lower charge.
Interest rates
Hopefully your business will be doing so well that your account will be in credit, in which case you will want to earn interest, so check the potential interest rates of different accounts. You may also want to move any surplus cash into a dedicated savings account. This is usually much easier to do within the same bank or banking group, so check out the rates and terms of your chosen bank’s business savings accounts too.
Location or online banking
Depending on how your business will be operating you will need to compare the location of your bank’s branches, their online services, or both. If you are running a shop or otherwise handling cash sales having a convenient and local branch is a must, whereas a good online banking provision is vital if you expect most of your business to be electronic. Most banks provide online banking services for free, but some may charge so ensure that you read the fine print.
The best UK business bank accounts in 2018
So taking all of the above points into consideration, which are some of the best business bank accounts? In no particular order:
Santander Start-up Business Current Account
| Fee Free Period 12-18 Months |
Available to: Limited companies, partnerships and sole traders with up to 2 owners/directors in their first year of trading |
Annual Turnover Unlimited |
Other features Fees apply to non-standard services such as change-giving, CHAPS payments and foreign currency transactions |
| Standard Fee £7.50 per month |
Interest Rate 0.1% on credit balances |
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| Overdraft Rate 5.5% EAR (variable) |
HSBC Start-up Business Account
| Fee Free Period 18 months |
Available to: Limited companies, partnerships, sole traders and charities |
Annual Turnover Up to £2,000,000 |
Other features Choose either their Small Business or Electronic Banking Tariff. Fees apply for some services |
| Standard Fee £5.50 fixed for 12 months |
Interest Rate 0% AER |
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| Overdraft Rate Negotiable |
Clydesdale Bank Business Current Account
| Fee Free Period 25 months |
Available to: Companies, partnerships, sole traders, clubs and societies, charities and schools |
Annual Turnover Up to £2,000,000 |
Other features Borrowing charges and charges for additional services e.g. CHAPS & international payments, apply during the fee free period |
| Standard Fee £5.00 per month |
Interest Rate 0% AER |
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| Overdraft Rate Negotiable |
Barclays Start-up Business Account
| Fee Free Period 12 months |
Available to: Limited companies, sole traders and partnerships |
Annual Turnover Unlimited |
Other features Choose either the Mixed Payments or e-Payment Plan depending on your business needs |
| Standard Fee £6.00 or £6.50 per month |
Interest Rate 0% AER |
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| Overdraft Rate Negotiable |
Yorkshire Bank Start-up Business Account
| Fee Free Period 25 months |
Available to: Limited companies, sole traders and partnerships |
Annual Turnover Up to £2,000,000 |
Other features Borrowing charges and charges for additional services e.g. CHAPS & international payments, apply during the fee free period |
| Standard Fee £5.00 per month |
Interest Rate 0% AER |
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| Overdraft Rate Negotiable |
Natwest Business Current Account
| Fee Free Period 18 months |
Available to: Limited companies, sole traders and partnerships |
Annual Turnover Up to £1,000,000 |
Other features Award winning mobile app and complimentary FreeAgent accounting software which links to your bank account |
| Standard Fee £5 Monthly account fee waived if transaction charges are over £5 |
Interest Rate 0% AER |
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| Overdraft Rate Variable rate, fee free for 12 months |
Cashplus Business Current Account
| Fee Free Period N/A |
Available to: Limited companies, sole traders, partnerships and charities |
Annual Turnover Unlimited |
Other features Online alternative to high street banks, apply instantly online with no credit check. Counter services available at Post Offices |
| Standard Fee £69 per annum |
Interest Rate 0% AER |
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| Overdraft Rate Upon application |
Royal Bank of Scotland Start-up Business Account
| Fee Free Period 24 months |
Available to: Limited companies, sole traders and partnerships |
Annual Turnover Up to £1,000,000 |
Other features Charges for unarranged borrowing, additional services & Bankline charges are excluded from the free banking offer |
| Standard Fee £5 Monthly account fee waived if transaction charges are over £5 |
Interest Rate 0% AER |
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| Overdraft Rate Variable rate, fee free for 12 months |
CardOneBanking Small Business Account
| Fee Free Period 0 months |
Available to: Limited companies, sole traders and partnerships |
Annual Turnover Up to £2,000,000 |
Other features Online service available with no credit checks. £55 application fee applicable |
| Standard Fee £12.50 per month |
Interest Rate 0% AER |
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| Overdraft Rate Not available |
Cumberland Building Society Business Bank Accounts
| Fee Free Period 12 Months |
Available to: Limited companies, sole traders, partnerships and charities |
Annual Turnover Unlimited |
Other features 2 options (A & B) to suit your business needs |
| Standard Fee £3.00 - £5.00 per month |
Interest Rate 0.1% AER |
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| Overdraft Rate 12.73% variable EAR |
You’ve found your perfect business bank account, what next?
Once you have found your perfect bank account, the next thing to do is to make sure that you are working with your perfect accountant. A great accountant will not only ensure that your annual accounts are filed on time, but they will also ensure that your business is running efficiently as well as sourcing numerous ways to add value to your business.
Handpicked Accountants specialises in connecting small business owners and company directors with their perfect local accountant. Each firm featured on Handpicked Accountants has been thoroughly vetted prior to their inclusion so you know that you will be working with an accountant that you can rely to do a great job, putting the needs of your company first and for a fair price. Contact Handpicked Accountants to find your perfect accountant today.
