A business bank account is a type of bank account specifically designed for businesses to manage their finances. It provides essential banking services such as receiving and making payments, managing cash flow, and keeping business and personal transactions separate.

How does a business current account work?

A business current account works similarly to a personal current account but with additional features tailored to meet the needs of businesses. It allows you to deposit and withdraw funds, write and cash cheques, make electronic payments, receive payments from customers, and access banking services online or through mobile apps.

Do I need to have a business bank account?

While it is not a legal requirement to have a business current account, it is highly recommended for several reasons.

Firstly, using a separate account for your business transactions helps keep your personal and business finances separate, which simplifies accounting and tax reporting.

It also enhances your professionalism and credibility, as customers and suppliers prefer dealing with businesses that have dedicated business accounts.

Additionally, many banking services and features are specifically designed for businesses, making it easier to manage finances efficiently.

Using an account for your business transactions helps keep your personal and business finances separate."

How to compare business current accounts

When comparing business current accounts, consider the following factors:

Look for any monthly account fees, transaction fees, overdraft fees, and charges for additional services.

Check if there are any limits on the number of transactions or cash deposits you can make without incurring extra charges.

Evaluate the quality and functionality of online banking platforms, mobile apps, and other digital services offered.

If you anticipate needing an overdraft, compare the terms, interest rates, and fees associated with overdraft facilities.

Consider any additional services provided, such as invoicing tools, integration with accounting software, or foreign currency services.

Our best business bank accounts

Our editors pick these deals by weighing several factors such as the set up time, software integration, fees and others for each product.

Editor’s pick

Our best business bank account

Tide Business Bank Account

Account Fee

No account fee

FSCS Protection

Yes

Account Management

App, Online, Phone

Set-up time

Instant decision

View deal

Show Details

Eligibility

Max. annual turnover

Unlimited

UK Resident

YES

“A great business bank account for SMEs. It’s quick to setup and offers everything you’d expect to manage your business' finances, such as accounting software integration. Plus you can manage it with their handy smartphone app. ”

Salman Haqqi

Senior Personal Finance Editor

Editor’s pick

Our best business bank account

Cashplus Bank Business Bank Account

Account Fee

No account fee

FSCS Protection

Yes

Account Management

App, Online, Phone

Set-up time

Instant decision

View deal

Show Details

Eligibility

Max. annual turnover

Unlimited

UK Resident

YES

“Another great option for businesses, especially if your business has a less than perfect credit history, because they don't require credit checks. It's quick to setup and offers a number of software integrations.”

Salman Haqqi

Senior Personal Finance Editor

Editor’s pick

Our best business bank account

Revolut Business Free Account

Account Fee

No account fee

FSCS Protection

Account Management

App, Online

Set-up time

Instant decision

View deal

Show Details

Eligibility

Max. annual turnover

Unlimited

UK Resident

YES

“If you open a bank account for your business with Revolut then you have the flexibility to change it or cancel at any time. It’s also completely free and it can be managed online with 24/7 support.”

Lucinda O'Brien

savings expert

How to open a business bank account

To open a business current account in the UK, you will typically need to provide the following:

Proof of identity: This can include your passport, driver's license, or national ID card.
Proof of address: Utility bills, bank statements, or official letters showing your name and address.
Business documentation: This may include your business registration certificate, partnership agreement, or articles of association.
Personal and business financial information: You may need to provide details of your personal and business income, assets, and liabilities.

How to switch to a new business bank account

Switching your business bank account can seem daunting. But if you're unhappy with your existing bank account, there's no reason not to look for a better option. Many banks and providers offer incentives for switching your business bank account.

The Current Account Switch Service (CASS) is a free service that allows you to switch your business bank account to a new bank quickly and easily. The service is backed by the Current Account Switch Guarantee, which means that your old bank will be responsible for any payments that are missed during the switch.

But before you use the CASS, do your research and compare different business current accounts. Make sure that the new bank offers the features and benefits that you need and make sure to read the terms and conditions carefully before you sign up for a new account.

Once you've found an account you like, just follow these simple steps.

Apply for a business account with the new bank.
When applying for the account, tell the new bank that you want to use the CASS.
The new bank will then contact your old bank to initiate the switch.
The switch should take place within 7 working days.

By following these tips, you can make the process of switching business bank accounts as smooth and stress-free as possible.

No. of account switches from Jan to Aug '23^[1]

16,077

FAQs

Can I have a business current account if I'm a sole trader?

Yes, business current accounts are available for sole traders as well as partnerships and limited companies.

Can I use a personal current account for my business transactions?

Unless you are a sole trader, it's generally not advisable to use a personal current account for business transactions, as it can lead to complications in managing finances and accounting.

What fees can I expect with a business current account?

Fees vary depending on the bank and the type of account. Common fees include monthly account fees, transaction fees, and charges for additional services

Can I get a business current account with bad credit?

It can be more challenging to get a business current account with bad credit, but some banks may offer options specifically designed for businesses with poor credit history.

Can I have multiple business current accounts?

Yes, you can have multiple business current accounts. It can be useful for separating different aspects of your business or if you have multiple businesses.

Are there any limitations on the number of transactions or cash deposits I can make?

Business current accounts may have limitations on the number of free transactions or cash deposits you can make each month. Additional fees may apply if you exceed the limits.

What happens if I close my business, can I close my business current account?

If you close your business, you should inform your bank and close your business current account. The bank will guide you through the process, and any remaining funds will be transferred to another account.