Open a business bank account and simplify your finances
Compare deals from award-winning providers
Consider key features and costs involved
Choose the best business bank account tailored to your small business
Compare deals from award-winning providers
Consider key features and costs involved
Choose the best business bank account tailored to your small business
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Maximum balance | £500,000 |
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A business bank account is specifically designed for managing business finances, so you can keep your personal finances separate. This is important for accounting and tax purposes, plus it helps businesses pay expenses, receive payments and manage cash flow.
A business bank account works in a similar way to a personal bank account, but it’s tailored to meet the needs of businesses including startups, sole traders and other types of organisations such as sports clubs and charities.
Limited companies are required to have a business bank to comply with the legal duties of running a limited company. This is because a limited company is a separate legal entity, so the money belongs to the business rather than a personal individual. This means it must be separated.
Sole traders aren’t required to have a business bank account, but it’s always worth exploring if you’re struggling to manage your finances. It also promotes professionalism and builds your business credit history.
Here are some reasons why getting a business bank account is important:
Separation of personal and business finances: It simplifies accounting, bookkeeping and tax reporting. This makes it easier to track business expenses, income, and profits.
Legal and liability protection: In the event of legal issues, having a distinct business bank account can help as your personal assets are separate.
Access to business-specific banking services: Business bank accounts often come with business overdrafts, lines of credit, payroll processing, accounting software and cash management tools.
Compliance with financial regulations: Accounts typically come with features such as account statements, transaction tracking and integration with accounting software. This simplifies regulatory compliance and auditing processes.
Scalability and growth: As your business grows, having a dedicated business bank account provides a foundation for expansion. It offers the necessary financial infrastructure to support growth.
With digital banks it only takes a few minutes to apply for a business bank account, but the steps will differ depending on the provider. Here’s a brief overview of what to expect:
Choose the right business bank account for your small business
Get the required documents ready for application, including a valid ID
Apply online via the bank’s website
Set up online banking and payment methods
Add the minimum deposit if required
Start using your account
In some cases, you may be asked for specific documentation to confirm your identity but this is decided on a case by case basis. The types of documents you could be asked for include:
A valid identity document such as your passport or driving licence
A valid proof of address for both you and your business – if this is something like a utility bill it will need to be less than three months old
Companies House registration documents for your business
It’s always a good idea to compare deals and make sure you are getting the best deal. There are many reasons for switching, for example you might be frustrated with your current provider’s customer service or you could have found an account with lower fees and more rewards.
You’re not legally required to have a business bank account if you’re self-employed or a sole trader. However, many people choose to, as it helps keep business and personal finances completely separate and easier to manage.
Yes, if you’re self-employed or a sole trader. But you cannot use a personal current account if you are running a limited company as this would not be compliant with the legal expectations of running a limited company.
It’s possible to open a business account with bad credit but it may be difficult, especially if you’ve been declared bankrupt or had a county court judgement (CCJ) against you in the last five years. If you're struggling it might be worth speaking to a financial advisor.
Yes, although you may be charged a handling fee and sometimes a surcharge over and above the base currency exchange rate – and those charges will vary depending on the bank, so you should check first.
For international transactions you’ll need your bank’s Business Identifier Code (BIC) and your unique International Bank Account Number (IBAN), which come with every business bank account.
Fraud and financial crime are happening more often, with fraudsters and scammer tactics getting more sophisticated by the day. A responsible bank account provider will have the security of your funds as their top priority, however there are also things you should do to protect yourself:
Make sure you keep your contact details up to date so your bank account provider can reach you if suspicious activity is seen on your account
Never share your online banking username or password with anyone over the phone, by text or email, even if the caller claims to be from your bank or the police
Never share the answers to your memorable questions linked to your bank account
Never share any unique verification codes or your one time passcode with anyone. Create passwords that are difficult to guess and don’t use personal information. It pays to use a mix of upper and lowercase letters, numbers and symbols
Always use different passwords for your online accounts
If you’re ever contacted by your bank via the phone, SMS or email and you’re not sure it is them, don’t hesitate to end the interaction and call them back on their official customer service phone line to ensure the communication is genuine.
There isn’t a minimum balance requirement for business bank accounts because each provider sets its own eligibility criteria. Always check the terms and conditions before applying for a business bank account.
Yes, although if you want more than one account you’ll have to apply for each separately.