What is the cheapest business bank account? Comparing top low-cost current accounts

Last updated on 24 January 2024

In the dynamic landscape of UK business, managing finances efficiently is paramount. For small and medium enterprises (SMEs) and entrepreneurs, finding a cost-effective business bank account is crucial to optimise cash flow and minimise overheads. But what are the cheapest business bank accounts? And is cheap always better?

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This article delves into the cheapest business bank accounts available, comparing their features, fees, and functionalities to aid UK business owners in making an informed decision.

Video: Getting started with business bank accounts

Understanding business bank accounts

Before comparing accounts, it’s essential to grasp what business bank accounts offer and why they’re necessary.

Unlike personal accounts, business accounts are designed to handle higher transaction volumes and more complex financial activities, such as payroll, invoicing, and tax management.

They often come with additional services like business loans, overdraft facilities, and merchant services.

Explore business banking

Revolut Business
✓ Business Current Account
✓ Award-Winning Mobile App
✓ Quick & Easy Application Process
Pricing Trial period Contact

Tide Business Bank Accounts
✓ Free, Plus, or Pro Account
✓ iOS & Android Mobile App
✓ Upload & Auto-Match Receipts
Pricing Trial period Contact

Card One Money
✓ No Credit Checks
✓ Simple Fees
✓ Up to 3.5% Cashback
Pricing Trial period Contact

ANNA Money
✓ Apply in 10 minutes
✓ Bookkeeping & Payroll Tools
✓ User-Friendly Mobile App
Pricing Trial period Contact

Co-Op Business Banking
✓ Business Current Account
✓ Online, App & High Street Banking
✓ Quick & Easy Application Process
Pricing Trial period Contact

HSBC Business Banking
✓ Business Current Account
✓ In-Branch, Online & App Banking
✓ FSCS Protected
Pricing Trial period Contact

Metro Business Banking
✓ Business Current Account
✓ High Street Presence
✓ FSCS Protected
Pricing Trial period Contact

Mettle Business Banking
✓ Business Bank Account
✓ Online & App
✓ Quick & Easy Application Process
Pricing Trial period Contact

Monzo Business Banking
✓ Business Current Account
✓ Dedicated mobile app experience
✓ FSCS Protected
Pricing Trial period Contact

Virgin Money
✓ Business M Account
✓ In-Store, Online & App Banking
✓ Insights & Forecasting Platform
Pricing Trial period Contact

Factors to consider

When searching for a low-cost business bank account, consider the following factors:

  • Fees and charges: Look beyond the headline figures to understand the fee structure, including monthly fees, transaction charges, and any hidden costs.
  • Online and mobile banking: Ensure the account offers robust online and mobile banking facilities, crucial for real-time financial management.
  • Customer service: Reliable customer support is vital, especially for businesses that handle a large volume of transactions.
  • Overdraft and loan facilities: Some businesses might require access to credit facilities. Check the terms and interest rates.
  • Additional features: Consider whether the account offers value-added services such as accounting software integration, expense cards, and international payment support.

Cheapest business bank accounts compared

Bank/ProviderAccount TypeMonthly FeeIntroductory OfferKey FeaturesOverdraft FacilityInternational Payments
MonzoBusiness Lite£0NoneInstant notifications, integrated accounting, multi-user accessNoYes, with fees
StarlingBusiness Account£0NoneNo charges for electronic payments, domestic transfers, ATM withdrawalsYesYes
RevolutBusiness Free£0NoneFree local transfers, cryptocurrency exchangesNoLimited free transfers
HSBCKineticVariableNo fees for the first 12 monthsCash flow insights, overdraft applicationsYesYes
BarclaysStart-up Business AccountVariable12 months free bankingAccess to a business manager, support servicesYesYes
NatWestBusiness Current AccountVariableFee-free period for start-upsTailored support, access to business specialistsYesYes
The Co-operative BankFSB Account£0 for FSB membersNoneOnline and mobile banking, ethical banking practicesYesYes
Metro BankSmall Business AccountVariableNoneSuitable for in-branch banking, competitive fee structureYesYes
Comparing the features and fees of the cheapest UK business bank accounts

This table provides an overview, and it’s essential to check directly with the banks for the most current information, as offerings and fees can change.

Comparing low-cost business bank accounts – What’s cheapest?

Several banks and financial institutions in the UK offer competitive business bank accounts. Here’s a comparison of some of the top low-cost options:

1. Cheapest challenger banks

Challenger banks, such as Monzo, Starling, and Revolut, have disrupted the traditional banking sector by offering digital-first solutions with transparent fee structures.

Monzo Business Lite

Monzo offers no monthly fee with features like instant notifications, integrated accounting, and multi-user access. However, cash deposits and international payments may incur fees.

Starling Business Account

Known for its award-winning app, Starling offers a fee-free account with no charges for electronic payments, domestic transfers, or ATM withdrawals. It’s an excellent option for businesses looking for comprehensive digital banking services without hidden costs.

Revolut Business Free

Revolut‘s entry-level business account comes with no monthly fee and includes perks like free local transfers and access to cryptocurrency exchanges. However, there are limits on the number of free international transfers.

2. Cheapest traditional banks

Traditional banks such as HSBC, Barclays, and NatWest offer business accounts with more extensive branch networks and additional services.

HSBC Kinetic

Designed for small businesses, HSBC Kinetic offers a digital account with no monthly fee for the first 12 months. It provides features like cash flow insights and the ability to apply for an overdraft.

Barclays Start-up Business Account

Barclays offers 12 months of free banking for start-ups, with access to a dedicated business manager and support services. After the initial period, fees depend on the account usage.

NatWest Business Current Account

NatWest provides a tailored approach with a fee-free period for start-ups and support from a network of business specialists. Post the introductory offer, fees are based on account activity.

3. Building societies and niche providers

Some building societies and niche providers offer competitive business accounts, catering to specific industries or community-based businesses.

The Co-operative Bank FSB Account

In partnership with the Federation of Small Businesses, The Co-op account offers free banking for FSB members, including online and mobile banking, with a focus on ethical banking practices.

Metro Bank Small Business Account

Metro Bank offers a straightforward business account with a competitive fee structure, particularly suitable for businesses that prefer in-branch banking alongside digital services.

Making the choice

Selecting the cheapest business bank account depends on your business needs.

  • For digitally savvy businesses with fewer cash transactions, challenger banks might offer the most cost-effective solutions.
  • Traditional banks could be more suitable for businesses valuing face-to-face interactions and a broader range of financial products.

Conclusion – Choosing a cheap business bank account

The UK business banking sector is rich with options catering to the diverse needs of SMEs and entrepreneurs. By carefully assessing fees, features, and the specific needs of your business, you can identify the most cost-effective business bank account.

Remember, the cheapest option isn’t always the best in terms of value. Consider the overall package, including customer service, digital tools, and additional services, to ensure your business banking supports your company’s growth and operational efficiency.

FAQ – Cheapest business bank accounts compared

What is the cheapest business bank account available in the UK?

The cheapest business bank account can vary based on your business needs, but digital-first banks like Starling and Monzo offer competitive, low-cost accounts with no monthly fees for basic services.

How do I find the cheapest business bank account for a start-up?

Compare digital banks such as Revolut and traditional banks offering introductory deals like Barclays, focusing on start-up friendly features and fee waivers.

Are there any hidden fees in the cheapest business bank accounts?

Always read the terms and conditions. Even the cheapest accounts might have fees for additional services like overseas transactions or cash deposits.

Can I get a cheap business bank account with an overdraft facility?

Yes, some accounts like HSBC Kinetic offer overdraft facilities, but the terms and interest rates can vary, so it’s important to compare options.

Is it possible to switch to the cheapest business bank account easily?

Most banks participate in the Current Account Switch Service, making it easy to switch business accounts within seven working days.

What features come with the cheapest business bank accounts?

Features vary but often include online banking, instant notifications, invoicing tools, and integration with accounting software.

Are the cheapest business bank accounts only available to small businesses?

While they are often aimed at SMEs, sole traders and freelancers can also benefit from these accounts, depending on their banking needs.

Do the cheapest business bank accounts offer international banking features?

Some, like Revolut Business, offer international payment options with competitive fees, but it’s essential to check for any limitations.

How do customer service options compare in the cheapest business bank accounts?

Digital banks often provide robust online support, while traditional banks may offer a mix of in-branch and digital support services.

Can I deposit cash and cheques with the cheapest business bank accounts?

Options vary; digital banks might have limitations or fees for cash and cheque handling, unlike traditional banks with branch networks.

Are there any cheap business bank accounts that integrate with accounting software?

Many, including Starling and Monzo, offer direct integration with popular accounting software like Xero and QuickBooks.

What is the best way to compare the cheapest business bank accounts?

Use comparison websites and check out each bank’s official site for the most up-to-date information on fees, features, and eligibility criteria.

Can the cheapest business bank accounts help with tax preparation?

Some accounts offer features like categorising transactions for tax purposes, but it’s best to consult with a tax professional for comprehensive tax support.

Are cheap business bank accounts secure?

Yes, both digital and traditional banks are regulated and must adhere to strict security standards to protect customers’ funds and data.

Do any of the cheapest business bank accounts offer perks or rewards?

While rare, some accounts may offer rewards or discounts on business services, so it’s worth checking the account details.

How quickly can I open the cheapest business bank account?

Digital banks can often offer quick online account opening, sometimes within minutes, whereas traditional banks may take a few days.

Is there a minimum balance requirement for the cheapest business bank accounts?

Many low-cost accounts do not have a minimum balance requirement, but it’s important to verify this before opening an account.

Can I get a business credit card with the cheapest business bank account?

Some banks may offer a business credit card, but eligibility and fees can vary, so it’s important to inquire directly.

How do I know if the cheapest business bank account is right for my business?

Consider your business’s specific banking needs, such as transaction volume, the need for physical banking, and additional banking services, to determine the best fit.

What happens if my business grows beyond the cheapest business bank account’s limits?

Most banks offer a range of business banking products and can work with you to transition to an account that better suits your expanded needs.

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Reviewed by , Managing Director

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