FinancesChoosing the best business bank account

Choosing the best business bank account

As a business owner, one of the most important decisions you will make is choosing the right bank account for your company. A business bank account is essential for managing your finances, processing transactions, and keeping your business organized. A well-chosen account can provide you with a range of benefits, including improved cash flow management, access to business loans and credit facilities, and streamlined financial operations. On the other hand, a poor choice can lead to unnecessary fees, limited banking services, and frustration. By taking the time to evaluate your options and select the best business bank account for your needs, you can set your business up for long-term success.

What to look for

  1. Fees and Charges: One of the first things to consider when choosing a business bank account is the fees and charges associated with the account. Different banks have different fee structures, so it is important to compare and evaluate the costs involved. Look for accounts that offer free or low-cost transactions, reasonable monthly maintenance fees, and competitive overdraft charges.
  2. Online Banking Services: In today’s digital age, online banking services are a must-have for any business. Look for a bank that offers a user-friendly online banking platform with features such as mobile banking, real-time transaction monitoring, and the ability to make payments and transfers online. These services will make managing your finances much more convenient and efficient.
  3. Customer Support: Good customer support is essential when it comes to business banking. You want a bank that is responsive, helpful, and available when you need assistance. Look for banks that offer dedicated business customer support, with extended hours and multiple contact channels such as phone, email, and live chat.
  4. Local branches: Do you need a local branch of your bank, for example to deposit cash?
  5. Accounting software integration: If you use accounting software to manage your business finances, look at the list of banks it supports for direct integration. This feature lets you automatically download transaction details from your bank without having to type in all the details manually.
  6. Multi-director support: Does your business have several directors who need access to the bank account? If so, this will limit the number of banks on your list – for example, several of the online-only banks only support access by one director.
  7. Currencies and cash: Do you need to accept payments in multiple currencies or deposit cash? If so, you’ll find several banks only support UK-Pound sterling and many of the newer online-only banks have strict limits on cash deposits.

Traditional banks and online banks – what’s the difference?

When it comes to choosing a business bank account in the UK, you have two main options: traditional banks and online banks. Traditional banks are the well-established high street banks that have physical branches and a long history in the industry. Online banks, on the other hand, are newer digital-only banks that operate solely through online platforms and mobile apps.

Traditional banks offer the advantage of a physical presence, which can be beneficial for businesses that require face-to-face interaction or cash handling services. They often have a wide range of banking products and services, including business loans and credit facilities. However, traditional banks may have higher fees and more complex account opening processes.

On the other hand, online banks offer convenience and lower fees. They typically have streamlined account opening processes and user-friendly online platforms. Online banks are a great option for businesses that prioritize digital banking services and do not require physical branch access. However, online banks may have limited product offerings and may not offer in-person customer support.

How to open a business bank account in the UK

Opening a business bank account in the UK is a relatively straightforward process, but it does require some preparation. Here are the general steps involved:

  1. Choose a bank: Research and compare different banks to find the one that best suits your needs. Consider factors such as fees, services, and customer reviews.
  2. Gather the required documents: Banks typically require certain documents to open a business bank account. These normally include proof of your identity, proof of address, business registration documents, and financial statements. Contact your chosen bank to find out exactly what documents you need to provide but expect to have to provide:
    • Full passport or driving licence to prove your identity
    • A driving licence, bank statement, council tax bill, or utilities bill to provide proof of your address
    • Your business registration details – for example your Companies House number
    • The details of your business’ registered directors including their name, address, date of birth and NI number
    • The financial details about your business – for example, turnover, budgets, and tax information
  3. Complete the application: Once you have gathered the necessary documents, you can proceed with the account application. This can usually be done online or in-person, depending on the bank.
  4. Verification and approval: The bank will review your application and may request additional information or documentation for verification purposes. Once your application is approved, you will be notified and provided with the necessary account details.

Opening a business bank account is an important step for any business owner. By following these steps and providing the required information, you can open a business bank account in the UK and start managing your finances effectively.

Comparison of the best business bank accounts in the UK

To help you make an informed decision, let’s compare some of the best business bank accounts available in the UK. Please note that the following list is not exhaustive, and it is important to conduct your own research and evaluate each account based on your specific needs and requirements.

Traditional banks offering business banking accounts in the UK

  1. Barclays Bank
  2. Co-operative Bank
  3. HSBC Bank
  4. Lloyds Business Banking
  5. Metro Bank
  6. Natwest Bank
  7. RBS Bank
  8. Santander
  9. TSB

Online banks offering business banking in the UK

  1. ANNA
  2. Mettle
  3. Monzo
  4. Revolut
  5. Starling
  6. Tide

These are just a few examples, and there are many other options available. Take the time to research and compare different banks, their fees, features, and customer reviews to find the best business bank account for your needs.

Avoiding common mistakes

When choosing a business bank account, it is important to avoid common mistakes that can lead to unnecessary fees or limitations. Here are some mistakes to watch out for:

  1. Failing to compare fees: Different banks have different fee structures, and failing to compare fees can result in higher costs for your business. Take the time to understand the fees and charges associated with each account and choose one that offers competitive rates.
  2. Not considering future needs: While it is important to choose a bank account that meets your current needs, it is also important to consider your future needs. Think about factors such as scalability, international transactions, and access to credit facilities when selecting a business bank account.
  3. Overlooking customer support: Good customer support is crucial when it comes to business banking. Overlooking customer support can lead to frustration and delays when you need assistance. Choose a bank that offers dedicated business support and multiple contact channels.

Avoiding these common mistakes will help you choose a business bank account that is well-suited to your needs and provides a positive banking experience.

Summary

Choosing the best business bank account in the UK is a decision that should not be taken lightly. By carefully considering factors such as fees, online banking services, and customer support, you can select an account that meets your specific needs and helps you achieve your business goals. Remember to evaluate different banks, compare their features and benefits, and consider customer reviews before making a final decision.

Opening a business bank account is just the first step. Once you have chosen an account, it is important to manage it effectively and stay on top of your finances. Keep accurate records, regularly review your account, and monitor your cash flow to ensure the financial health of your business.

Remember, this guide is just the starting point. Conduct your own research, seek advice from professionals, and make an informed decision based on your unique business requirements. With the right business bank account, you can set your business up for success and focus on what you do best.

Written by

Anna Thornhill
Anna Thornhillhttps://gosmallbusiness.co.uk
Anna Thornhill is one of our expert writers. Anna is our specialist editor covering business growth and marketing and makes it her mission to provide small business owners with practical guides that help you step-by-step to grow your business. Anna’s an experienced sales and marketing professional who moved to writing and editorial and helps startups and small business owners with practical advice in growing their business with the latest sales and marketing techniques plus guides to choosing and using sales and marketing technology.

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