Our free business bank account recommendations:
Other contenders to consider:
Thanks to increased threat of competition from challenger or online-only banks, plus the court-mandated Business Banking Switch scheme, banks across the UK are offering great free deals — if you know what you are looking for.
Whether you’re searching for your first business bank account or looking to switch, we’ve dug up the details on 8 of the best free business bank account deals available today for UK business owners and sole traders.
Free Banking Period: Free plan available.
Fee Thereafter (if any): Free, depending on your needs.
Cash Transaction Limit: None but £3 charged per deposit of up to £1000. For amounts over £1000, there’s a fee of 0.3% of the amount deposited and a 50p charge per withdrawal.
Eligibility: The free plan requires businesses have fewer than 10 employees and less than £1.7m in annual turnover. But paid plans are available for larger businesses.
Starling is one of the newest challenger bankers to try and transform the way businesses back in the UK.
They offer a business bank account tied into a slick and secure app, with a generous free plan. Customers get free electronic payments and domestic transfers, and no monthly account fee.
As a new entry to the banking industry, Starling’s product range is limited — but if you need basic and cheap business banking and can cope without branches, this could be a good fit.
They are not currently accepting overdraft applications outside of the government-backed lending schemes.
Free Banking Period: Free plan available for smaller businesses.
Fee Thereafter (if any): Free plan available, then various plans from £25 p/month to £1000 p/month.
Cash Transaction Limit: Daily withdrawal limit of £3000 a day and £100,000 a month.
Eligibility: Company must be registered and physically present in the EEA and Switzerland.
Revolut is another alternative bank option and is ideal for multinational businesses due to its focus on international currencies.
It’s monthly fee starts from zero, but does grow depending on the size of your business, with monthly fees on a sliding scale from ‘Free’, to ‘Grow’, ‘Scale’ and lastly, ‘Enterprise’. Note: with a ‘Free’ account, you can add only 2 team members.
There are some interesting features, like expense cards for employees and a fantastic mobile application. However, if you are a cash-heavy business, Revolut won’t work for you — there is no support for cash and cheque deposits.
Free Banking Period: Zero monthly fee.
Fee Thereafter (if any): Free from monthly fees forever.
Cash Transaction Limit: All Tide accounts are subject to transaction limits, but these can be increased on request.
Eligibility: Business owners must be over 18 years old, running a limited company registered in the UK.
Tide proudly displays on its website that over 100,000 business owners have chosen this free ‘not-a-bank-but-better’ service.
However, they do charge on virtually all transactions, including transfers, cash transactions, direct debits and other payment types like CHAPS.
If your business relies on cash, this isn’t a good fit for you due to these high charges. For example, there’s a £1 charge on cash deposits through the Post Office — or 3% if done via PayPoint — and all ATM cash withdrawals are charged at £1.
There are some unique benefits of choosing this alternative bank: you’ll get the ability to make invoices, share your Tide account with your accountant and sync to accounting software automatically.
Free Banking Period: 18 months for new businesses or 12 months for Switchers.
Fee Thereafter (if any): £6.50 per month (for the 12 months following your free banking period).
Cash Transaction Limit: Up to £3,000 cash per month, then 0.50% fee of value deposited above £3,000.
Eligibility: Your business turnover must not exceed £2M annually.
HSBC is the 7th largest bank in the world and the largest in Europe, with reserves of over $2.55 trillion. But what does this banking heavyweight offer in terms of free business banking?
First of all, HSBCs free business banking offer is complex. If you pick this option, your account will transform over the first 3 years.
Your account will start in a free banking period, where all standard fees are covered. This lasts 18 months for new businesses and 12 months for Switchers. Next, you’ll enter a reduced fee period, paying a fixed price of £6.50 a month for 12 months which covers some account charges, notable excluding cash transactions over £3,000 per month. Finally, you’ll switch to either the Electronic Banking Tariff or Small Business Tariff.
HSBC also offers access to knowledge hub and various online tools, such as a business planner, with come included with your banking. It has also made a public commitment to support SMEs in the UK through Brexit, raising a £14 billion SME development fund and offering a dedicated telephone line for help and support.
Free Banking Period: No free banking period, but you’ll continue free of a monthly charge as long as your account balance stays above £5,000.
Fee Thereafter (if any): N/A
Cash Transaction Limit: 50 free transactions per month then £0.30 each.
Eligibility: Turnover of less than £2m and at least 50% of the business owners or directors (representing more than 25% of the shares) should be UK residents, and at least 50% of shares should be held by UK residents.
Metro Bank is a new name to the British banking industry, making them the only new high street bank to open in 150 years.
Metro’s unique approach is to combine best-in-class online banking with branches open 7 days a week across the UK. The result? This is one of the best free business banking offerings we’ve reviewed.
Metro Bank has simplified its fee structure, with no fees being payable if your balance remains above £5,000 throughout the month. For a business with low transaction volume, you’ll pay no additional fees, as transaction fees are waived on your first 50 transactions. Businesses with high transaction volume should review their charges carefully.
Another key benefit is its branch service. If you run a business that needs to make regular cash deposits throughout the week, this is a huge benefit. Metro’s branches are open 7 days a week, 362 days a year, from 8 AM to 8 PM Monday to Friday, 8 AM to 6 PM on Saturday and 11 AM to 5 PM on Sundays and Bank Holidays.
If you are a switcher, Metro Bank will switch your account within 7 days, so long as you have less than 50 employers and turnover under £6.5m. All payments, including direct debits and standing orders, will continue at your new bank and they promise no payments will be lost as a result of the switch. If you are switching from RBS via the Business Banking Switch programme, you might be eligible for a cash incentive.
If your business grows to over £2m in size, Metro Bank offers a ‘Commercial Current Account’ with no monthly account fee.
Free Banking Period: 18 months for new businesses, 6 months for Switchers.
Fee Thereafter (if any): £6.50 per month.
Cash Transaction Limit: £1 per £100 for the first £1500 each month, and 80p per £100 for amounts over that amount.
Eligibility: Turnover expected to be less than £3m.
Lloyds Bank has over 30 million customers and 1 million SME customers in the UK, making them one of the so-called ‘Big Four’ banks.
Like the other ‘Big Four’ reviewed in this article, HSBC’s offer is very similar to others on the high street. They offer a standard 18 months of free business banking to new businesses, but only 6 months to Switchers. This free period includes electronic payments, cheques and cash withdrawals/deposits, with transparent and competitive fees for other transaction types.
So, why should you choose Lloyds Bank for your business banking? Firstly, they have one of the largest branch networks in the UK, making it easier for businesses to make cash deposits. Secondly, they have a comprehensive product offering if you prefer to bank all in one place, offering business loans, insurance, overdrafts and charge cards. Finally, HSBC’s business banking app is one of the best we’ve tried, with biometric login via fingerprint or face ID and a full set of features to help you manage your business on the go.
Free Banking Period: 25 months for new businesses and Switchers
Fee Thereafter (if any): £6.50 a month.
Cash Transaction Limit: £250,000 per annum limit and fees of 65p per £100 once the free banking period has ended.
Eligibility: Turnover less than £2m, and within the first 12 months of trading to access 25 months free banking.
At the time of writing, Yorkshire Bank is rebranding as Virgin Money. We reached out to the bank for comment on whether the existing products will continue to be available but didn’t hear back, so you should take advantage of this generous package now.
Yorkshire Bank offers an incredible 25 months of free banking to businesses trading less than 12 months and business Switchers. However, not all charges are included in this offer — there are fees for additional services or borrowing charges (it’s worth having a good read of this business banking tariff if you’re considering Yorkshire).
What’s more: if digital banking is important to you, then buyer beware! Yorkshire Bank doesn’t currently offer a business app for iPhone or Android and the online offering is currently being replaced, meaning certain features are unavailable at the time of writing such as a salary runs, CHAPS and international payments.
Free Banking Period: 25 months for Switchers and new businesses
Fee Thereafter (if any): Monthly fee of £5, waived if the average balance in the month is £10,000 or more.
Cash Transaction Limit: 70p per £100.
Eligibility: Over 18 years old and a sole trader, partner or director.
TSB has over 4.6 million customers in the UK and was created as a result of the banking crisis when a European Commission ruling required that Lloyds Banking Group sold a portion of its business. It’s now part of the Spanish bank Sabadell.
Just like Metro Bank, TSB has an innovative and transparent fee structure. During the first 25 months, you also won’t be charged for cash, cheques, standing orders, direct debits and there is no monthly fee. After that, if your balance is over £10,000, you won’t pay a monthly fee. We were impressed by how clearly listed TSB’s charges are, and how competitive they are for most business types.
TSB also has some unique account benefits, such as a free Square card reader plus no fees on your first £1,000 of sales, enabling you to take credit card payments on day 1. They also provide specialist business support through Enterprise Nation.
Choosing the best free business bank account for your company can be easier said than done; the business finance market is rapidly expanding, as banks try to persuade Britain’s 5.7 million business owners to partner with them. Sifting through the various free banking period T&Cs can feel like a mammoth task — the simpler alternative being to select a bank brand you’re familiar with, or keep your money where it is today. Indeed, when it comes to switching, research shows that some people would prefer a trip to the dentist over trying to change banks.
Truth is, though, that new businesses and Switchers alike stand to gain a lot from free banking deals. What’s more, as 99% of switches complete within 7 working days, it’s really not as complex as it sounds — and the benefits far outweigh potential pain-points.
What is the difference between paid and free business bank accounts?
Before you jump into your search for the perfect free business account, it’s important to understand the difference between paid and free accounts.
Let’s be honest — there’s rarely such thing as a free lunch, especially in business. And banking is never free because banks make money from customers in more covert ways than monthly charges. For example, the bank might offer lower interest rates on credit balances, but demand higher fees for certain types of transactions, such as cash withdrawals or money transfers.
The trick with free business banking is to pick a bank that works for your business, by carefully comparing the tariffs side-by-side. If you are a cash-first business, pick a bank with low-to-no ATM charges. If you are a digital-only global business, choose a bank with low currency conversion charges. That way, you’ll avoid paying more in fees in the long-run.
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