Finding the correct bank for every financial transaction is essential. Moreover, it is essential for a business as it involves hundreds of transactions every day.
In The UK, many businesses today start their journey as startups. Therefore, it is now time to analyze the features of various banks to meet their needs.
I have compiled a list of the top 14 best small business bank accounts in the UK for the convenience of the users. A comprehensive comparison of these banks will help small businesses select the most suitable one.
Businesses must open a current account in a reliable bank for their organizational dealings. Most banks in the UK cover all types of businesses and give special benefits.
Furthermore, small business banks especially operate for the benefit of start-ups. The loans are also at a low rate.
So, learn about the incredible banking sector of the UK, strengthening the small businesses of the country.
Top 14 Bank Accounts in the UK
The best small business bank account in the UK is not a single bank. When you need the best, it must be qualified to support you at all times.
Whether for customers or advances, it is critical to have a trustworthy bank account.
I hope our research on the top 14 bank accounts will resolve most of your financial problems. The banks excel in their performances, including sanctioning loans for business, easy account access, and monthly charges.
They also provide innovative services to protect the lives of your workers. All your accounts will stay sound and secured through the framework of FSCS. (Financial Service Compensation Scheme).
The list of bank accounts is as follows:-
1. Starling Bank
Rating: 4.7 stars (NerdWallet)
This is a fabulous bank, topping the list. Moreover, you need not pay any additional fee per month.
It is an ideal bank for limited companies, LLPs, and sole traders. You will get the assurance of safe transactions through FSCS.
Starling Bank also has active mobile applications, having top reviews in the money market. The services are available 24/7, thus making it flexible to use.
Therefore, if you want a cheaper and more convenient way of banking, opt for this bank in the UK.
Pros
- Free transactions like Faster payments in the UK, direct debits, etc.
- FSCS protection for deposits till the limit of £85,000
- Online Account Management
- Post Office Cash deposits
- Free cheque deposits
Cons
- Non-management of account over your phone
- A minimum £3 fee is chargeable for cash deposits at the post office
2. HSBC UK (For Small Businesses)
Rating: 4.2 stars (NerdWallet)
Transactions are free in this bank if you operate through another HSBC Business Account.
The primary benefit of the bank is free banking facilities for the first 12 months.
You can access your bank account from anywhere through your phone, app, or at the branch. The average set-up time is 5.4 days.
Due to the high demand, we are keeping it in second place as the best small business account in the UK.
Pros:
- HSBC credit facilities are available in the form of term loans, credit cards, business overdrafts
- FSCS Security for deposits up to £85,000
- Introductory offer of 12-month free banking
- Everyday banking transactions with ease
Cons
- Service is not available 24/7
- Monthly maintenance fee after 12-months
- Longer time for opening the account
3. Virgin Money
Rating: 4.7 stars (NerdWallet)
You can open four accounts at a time in one branch. If your business is based in Great Britain, you will have several options.
The M Account of Virgin Money does not charge any fee for small businesses and startups.
However, this benefit applies to businesses with annual turnover below £1 million. The average set-up time is 4 days.
Pros
- Several account perks like discounts on various merchandise, cashback offers on purchases through business credit cards, etc.
- Free Cash deposits, but 90p per £100
- Free Cheque deposits, if done via an app
- Free day-to-day banking
- FSCS Security scheme available (up to £85,000 deposits)
Cons
- 24/7 support for banking services over the phone, but not a customer care facility
4. Monzo Business
Rating: 4.8 stars (NerdWallet)
According to NerdWallet’s experts, this bank should be at the top.
However, given its popularity and usage patterns, I have decided to keep it in fourth place. You can open a maximum of two bank accounts in a branch of this bank.
Monzo’s unique feature is its innovative software called “Tax Pots.” It offers the best facilities for financial services.
But, you have to pay a monthly to access its Pro Account. It will let you enjoy all the exclusive features to manage finances fruitfully.
Pros
- Free UK transfers for Monzo customers
- 24/7 Customer Support
- Quick set-up facility on the same day
- FSCS Facility available on all transactions
- Easy access to the account via app and online banking
Cons
- Business accounts are not applicable for partnerships and charitable organizations
- Managing the account is not possible over the phone
5. Bank of Scotland
Rating: 4.4 stars (NerdWallet)
The Bank of Scotland’s Small Business Account provides great support to startups. You will also get free services for the first 12 months of opening the Current Account.
The bank provides a diverse range of services, depending on your business size. Therefore, you can get amazing financial services for large businesses or start-ups.
The bank provides exclusive services for charities, businesses, and professional practices. 7 days is the set-up time for the bank account
Pros
- Introductory offer for 12-months free banking
- Transaction fees applicable to specific transactions
- £8.50 is the monthly fee, for transactions after the first 12 months
- Online access to the bank account
- FSCS Protection for eligible deposits up to £85,000
Cons
- Monthly fees applicable after the introductory period
- Very long time (7 days) to set up an account
6. TSB Business Plus Account
Rating: 4.3 stars (NerdWallet)
TSB Banking offers great facilities to any business registered in the UK. It is ideal for regular banking for private limited companies, sole traders, and general partnerships.
The bank has physical branches in various cities across England, Scotland, and Wales. For the first 12 months, customers can use the Revenue App for free.
It gives exclusive free services for 30 months. This makes it unique from the rest of the banks who offer only a 12-month free period.
However, after 30 days, a fee of £5 is payable.
Pros
- Waiver of monthly fee for account balance £10,000 or more
- No fee for 30 months
- Online access to the account through phone or app, and also at the bank
- FSCS protection until £85,000 worth of deposits
Cons
- No TSB branches are there in North Ireland, although they are eligible to open an account
- The slowest setting time as the average duration is 16 days
- Automated chat service is available, but no 24/7 customer service
- Transaction charges and monthly fees applicable after the 30 months
7. Allica Bank
Rating: 4.2 stars (NerdWallet)
This is a free bank, established especially for SMEs. Moreover, there are no transaction fees. So, startup businesses can undoubtedly consider it the best small business bank account in the UK.
There is one special bank account for small and medium-sized businesses called Business Rewards Account, which offers fabulous facilities.
Pros
- 1% cashback for aggregate debit card purchases up to £10,000 per month and 1.5% cash back for aggregate purchases exceeding £10,000
- FSCS facility up to £85,000 worth of deposits
- 4.33% AER earning on bank savings, giving facility to withdrawals and deposits
- No transaction or monthly fee
- Access to local relationship managers in England and Scotland for tailored solutions
Cons
- Customer service is from the UK not giving 24/7 support
- No option for cash or cheque deposits to the Business Rewards account
- No management of bank account via phone or app
- Not possible to send money outside the UK
8. Lloyds Bank
Lloyds Bank offers the facility to open a Small Businesses and Start-ups Account for extra benefits. Every month, customers are eligible to make 100 electronic payments for free.
Furthermore, Non-profit organisations and schools can take special benefits from the Community Bank Account.
The monthly maintenance fee is NIL for the first 12 months. However, after that, the fee is £8.50 per month. The average set-up time is 7 days.
Pros
- Multiple access points from branch, phone, or app
- The bank has branches in England and Wales
- Credit facilities available
- Community account for schools, non-profit organisations, and credit unions
- FSCS protection up to deposits of £85,000
Cons
- No branches in Northern Ireland or Scotland
- Transaction fees applicable for moment accounts, electronic payments for more than £100 a month
9. The Cooperative Bank
Rating: 4.3 stars (NerdWallet)
Small businesses can open a DirectPlus Business Account for all the facilities. This bank is a specialist in handling sustainable and ethical issues.
Therefore, when such problems persist in your business, this is the perfect option. You will also have a wide range of accounts.
Every business, including charities, has the facility to open a maximum of six business accounts in a branch.
Pros
- 6 accounts at a time
- FSCS eligibility for deposits up to £85,000
- A cooperative business account provides facilities for credit cards, variable rate business loans, arranged overdrafts, and charge cards for expenses
Cons
- Non-availability of 24/7 customer support
- Average 14 days for setting up
10. HSBC Kinetic Account
Rating: 4.4 stars (NerdWallet)
This is a specially designed account from HSBC UK for limited company shareholders, sole proprietors, and sole directors.
It has the advantages of a traditional bank and online app services. The average set-up time is only 2 days.
Pros
- Fee period of 12 months
- Free transactions for direct debits, payments, and standing orders
- Low setup time
- Cash and cheque deposits are available
- Credit facilities present
- FSCS up to £85,000 deposit
Cons
- Maintenance fee of £6.50 per month after 12 months
- International payments are not possible through an pp
- Kinetic Account is only applicable to sole traders and sole directors with a maximum annual turnover of £6.5 million or less.
11. Shawbrook Bank
Rating: 4.7 stars (Trustpilot)
The physical branches are located in limited areas of the UK. They provide excellent web-based support through emails and mobiles.
However app-based support is not available. Although overdraft facilities are available, you can make only a Business Savings account here. A current Account is not allowed.
Pros
- Special accounts for startups and small businesses
- Unlimited withdrawals
- Low opening balance
- Suitable for sole traders, partnerships, and limited companies, but not applicable for LLPs
- FSCS is available for deposits up to £85,000
Cons
- No current account facility for businesses
- No fixed rate of interest
- No savings allowed more than £85,000
12. Oak North
Rating: 3.1 stars (Ambition Box)
This is a bank with an online transaction facility. It gives an option to open both Current and Saving account for businesses.
However, in this list of best small business bank account UK, this is not much recommendable. It can be costly, as the bank offers a transaction fee and monthly charges of £25.
Pros
- Electronic payment is free
- FSCS protection applicable to deposits up to £85,000
- Online and phone services available to operate an account
- Commercial mortgage and business loans are available
- Smart secure banking
Cons
- Transactions are not free
13. United Trust Bank
Rating: 3.7 stars (Google Reviews)
The bank comes with strict regulations to protect the interests of the customers. Therefore, it is a safe bank for the businesses, with years of experience.
Pros
- High maximum loan amount
- Email and Phone banking support
- Fixed and Tracker rate options are there
- Wide range of loan terms
Cons
- Loan size is minimum
14. Mettle Bank
Rating: 4.5 stars (TrustPilot)
This bank is exclusively for self-employed business owners. Limited Companies can also take benefits of it. Moreover, the bank also offers business banking through specific app. I am keeping it at the end, because of its popularity in compared to the others.
Pros
- Completely Free account
- Cash payment facility at post office or PayPoint
- FSCS Protection
Cons
- No access via phone or at a branch
- no international transactions
- No access to loans or business overdrafts
- Not available to partnerships or charities
FAQs
Is it mandatory to open a bank account for a business in the UK?
No. If you are sole trader in the UK, it is not mandatory. However, it is a must for companies
Who are eligible to open Business Bank accounts?
Limited companies, partnerships, sole traders, LLPs, charities, societies, and clubs are eligible to open Business Bank accounts.
Conclusion
The comparison shows that the best small business bank account UK has a number of options. However, if you need a secured transaction system for free, go for Sterling Bank or HSBC Small Business Accounts. However, TSB is recommendable if you want a better free period. HSBC Kinetic and Monzo also offers excellent services, but for a fee.
For online facilities, OakNorth is a viable option. Other options are also good, if that meets your criteria. So, sort out the requirements and choose the best one for maximum benefits for business transactions.
