Bank Listings - Selecting the Best Small Business Bank Account

The Three Simple Steps to Selecting the Right Product

Below are the steps to take when choosing a business account for the first time. Most people and businesses stay with their bank for their lifetime so it's best to spend a few minutes deciding what priorities are critical for your business.

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1: Do you need access to a branch network?

For the majority of smaller businesses, the volume of transactions each month is quite low. You'll almost always start on the standard tier of pricing if you don't negotiate or access any promotional offers. However most costs associated with banking apply from depositing cash receipts into the branch network.

If you have cash that requires physical counting and depositing, then you need easy access to your local branch or the Post Office network. You may, therefore, have limited options available to you when deciding which is best for your circumstances.

2: What will be your turnover in three years?

Your turnover projections are important as tariffs increase as your turnover increases. If you're likely to remain under £500,000, then most start-up accounts will be sufficient. However, if your turnover is anticipated to increase beyond this then some banks won't service your business.

3: Is cost important when choosing an account?

Most banks offer low tariffs for businesses with low turnovers. Some such as Santander offer accounts with a fixed monthly fee of around £10 per month with no additional costs. Others offer lower fees with all costs inclusive. For most businesses, longer term banking will never be completely free, so it's important to decide what level of expenditure is right for you.

Banking Guides and Help

Below is more information about each of the major banks offering business accounts in the UK. If you're a larger organisation then bespoke tariffs are available.

All of the above will offer brand new business start-ups some form of fee free period. Once this expires you'll be placed on their standard tariffs.

The following business banking comparison is for small businesses generally with a turnover of less than £1 million per year although this definition varies by bank.

Accounts for Start-ups

Here's how the major banks compare for the business start-up banking accounts. Basically if you're a new business you can get day to day fee free banking for all regular transactions on your account. The free periods are as follows:

  • Barclays - up to 24 months (a).
  • Co-operative Bank - Free for life with an FSB membership.
  • Halifax Bank - 12 months via Bank of Scotland.
  • HSBC - 18 months.
  • Lloyds TSB - 18 months.
  • Natwest - 24 months.
  • Royal Bank of Scotland - Free transactions with a £3 monthly charge.
  • Santander - 18 months if you already have a personal account or 12 months without.
  • Check our recommendations here.

(a) - standard is 12 months but if you subscribe to some of their other services this can be extended to 24 months.

Other banks are available such as Abbey (soon to be rebranded Santander), Bank of Scotland, Cater Allen, Clydesdale Bank, Bank of Ireland and Allied Irish.

For Switching Accounts

If you want to switch your current banking account here are the free periods offered by the banks:

  • Barclays - none.
  • Co-operative Bank - free for life.
  • Halifax Bank - 12 months via Bank of Scotland.
  • HSBC - 18 months with business direct.
  • Lloyds TSB - 6 months.
  • Natwest - none.
  • Royal Bank of Scotland - none.
  • Santander - fixed monthly charge includes all banking fees.

Current Charging Tariff

Once your free period is over with some of the banks you'll be generally moved over to their standard bank account which incurs fees. Here's how those bank accounts compare.

Bank Account
Cheques
Auto Crs/Drs
Monthly Fee
Cash Deposit
Barclays standard
59p
54p
£5.50
0.55%
Barclays automated
79p
Free
£5.50
0.85%
HSBC Business Direct
£1(1)
Free
Free
2%
HSBC Small Biz Tariff
63p
32p
£3.15
0.53%
RBS Current Account
67p
37p
£3
0.65%
RBS Business Plus
84p
0p
£5
0.95%
RBS Business Banking Direct
0p
0p
0p
0p

(1) - 20 free cheques per month.