Sole trader bank accounts

For those in the UK looking to go into business for themselves, setting up sole trader bank accounts is an important step.

As soon as you become self-employed, your existing personal and current accounts will no longer suffice. Having the right tools in place – like a suitable business banking solution – can make all the difference when it comes to staying organised and making sure your finances are compliant with applicable regulations.

Read on to find out exactly why it’s so important to open up a dedicated bank account for sole trading purposes, as well as which ones offer good value for money.

Best sole trader bank accounts

Bank	Lowest monthly fee	Offers current account	Offers savings account	Overdraft available
Acorn Account	£12.50	Yes	No	No
Aldermore	Free	No	Yes	No
Allied Irish Bank	£2.50	Yes	Yes	Yes
Amaiz	£9.99	Yes	No	No
Anna Bank	£14.90	Yes	No	No
Bank of Scotland	Free	Yes	Yes	Yes
Barclays	£8.50	Yes	No	No
Bunq	€ 4.99	Yes	No	No
Cambridge Building Society	Free	No	Yes	No
CardOneMoney	£12.50	Yes	No	No
Cashplus	Free	Yes	No	No
Co-operative Bank	£7	Yes	Yes	Yes
Countingup	Free	Yes	No	No
Cumberland Building Society	Free	Yes	Yes	Yes
Cynergy Bank	£5	Yes	Yes	Yes
Fair Everywhere	£12.50	Yes	No	No
Holvi	€ 9	Yes	No	No
HSBC	£6.50	Yes	Yes	Yes
Lloyds Bank	Free	Yes	Yes	Yes
Masthaven	Free	No	Yes	No
Metro Bank	£6	Yes	Yes	Yes
Mettle	Free	Yes	No	No
Monese	£9.95	Yes	No	No
Monzo	Ask	Yes	Yes	No
Nationwide	Free	No	Yes	No
NatWest	Free	Yes	Yes	Yes
Redwood Bank	Free	No	Yes	No
Revolut Business	£7	Yes	No	No
Royal Bank of Scotland	Free	Yes	Yes	Yes
Santander	£7.50	Yes	Yes	Yes
Shawbrook Bank	Free	No	Yes	No
Starling Bank	Free	Yes	No	No
Tide	£9.99	Yes	No	No
TSB	£5	Yes	Yes	Yes
Ulster Bank	£2.67	Yes	Yes	Yes
Virgin Money	£6.50	No	Yes	No
Wise	Free	Yes	No	No

Does a sole trader need a business bank account?

Yes, a sole trader or freelancer should have a business bank account to make it easier to keep track of their business finances. This separate account will also help ensure that personal and business transactions are not confused or mixed up.

A sole trader can open a dedicated business bank account at many UK banks, building societies or credit unions – they may need to provide information such as their name and address, business name (if applicable) and National Insurance number.

Most banks will offer a range of services to sole traders, including:

• A dedicated account for business transactions
• Business banking cards for easy payments and withdrawals
• Online banking facilities
• Overdrafts or loans tailored to businesses
• Business credit and debit cards
• Access to business savings accounts

Which business bank account is best for a sole trader?

There is no definitive answer as to which business bank account is best for a sole trader, as it will depend on their individual needs and circumstances. The most important factor when selecting the right business bank account is determining if the account has all the features that are necessary to support the specific requirements of running a sole trader business.

Features to look for in a sole trader bank account

Choosing the right business bank account for a sole trader is key to running their business successfully. The best bank account for sole traders will depend on their individual needs and preferences, but there are certain features that all small businesses should look out for when selecting an account.

Sole trader banking services

First, consider the types of banking services offered by each potential account. A basic current account may be suitable for a sole trader who only needs to make small payments and withdrawals, but more complex transactions may require an account with more features, such as overdraft facilities or merchant services.

Tailored bank accounts

Additionally, some banks offer accounts tailored specifically towards sole traders, so it’s worth researching all the options before making a decision. These accounts may offer different levels of interest on balances, as well as other benefits such as access to customer support and exclusive offers for sole traders.

Account fees and charges

It’s also important to consider the fees associated with each account. Some accounts may come with a monthly fee or minimum balance requirement, so make sure you read through the terms and conditions to determine which account best suits your needs. The fees may vary depending on the type of account you choose, so compare across all the options to get the right deal for your business.

How to open a sole trader bank account

Once you have selected the right account for your sole trader business, the next step is to open it. Most banks will require some documentation in order to open a business bank account, but the exact requirements may vary from institution to institution.

1. Gather the necessary documents

To get started with opening an account as a sole trader, first gather your necessary documents such as proof of identity and address. Depending on the institution, you may need to present a passport or driver’s license as well as proof of address such as a utility bill or bank statement.

You should also be prepared with information about your sole trader business, such as its registered name, purpose, and any relevant financial data including cash flow projections and profit and loss statements.

2. Fill out the application form

Once you have gathered all of the necessary documents, contact your chosen bank to request an application form for a business account. You can usually do this online or in person at the bank’s branch. Then fill out the required information on the form and send it back to the bank, along with any other supporting documents that might be required.

3. Activate the account

Once your application has been approved, you’ll receive a confirmation email or letter from the bank with instructions on how to activate your new account. You can then start using it immediately for all of your banking needs.