Free business banking is just banking that doesn't come with fees.

You can set up a free business bank account knowing there won't be monthly or annual charges, and set-up itself is free too. But there will be other charges - it's not totally free like your personal current account might be.

If you've got a limited company, you're legally required to have a business bank account. If you're a sole trader, it's up to you whether you have one. But a business account might help you to keep your personal finances separate from your business finances.

How to get a free business bank account

Firstly, it's important to understand that not every free business bank account is available to every type of business. Some banks have specific criteria that your business must fit before they'll give you one of their free business banking accounts. So you'll need to do some groundwork to find the best free bank account, UK wide, for your business.

When it comes to finding the right free bank account for your business, our comparison table at the top of this page is a good place to start. It lets you compare free business banking accounts based on:

  • Annual turnover: With each free business account, there's a specific annual turnover that's accepted

  • Availability: Check if your business is eligible for each free business bank account. For example, an account may only be available for sole traders or limited companies.

  • Interest rate: This is how much interest you could earn on the money you keep in a no fee business account current account.

When you're choosing the best free business bank account for you, think about which features you need most from your free business banking. For example, a small business might only need UK-based payment facilities if they don't do any international business.

Here's more information about free business banking accounts

Who can get a free business account?

Before you can find the best free bank account or free online bank account, UK wide, you'll need to work out if you're eligible.

When it comes to your business bank account, free of charge ones tend to be reserved only for small businesses. So, if you're a startup or small business, you might be able to get a free bank account for your company.

The UK's Companies Act 2006 defines a small business as one that meets at least two of the following conditions:

  • Annual turnover of 5.6 million or less

  • Annual balance sheet 2.8 million or less

  • 50 or fewer employees.

If you're not sure whether your company counts as a 'small business', this definition might help you work it out.

If your company qualifies, use our table to help you find which free business bank account, UK wide, would be best for you.

Are there any charges with a free bank account?

All the free business bank accounts in our comparison table are free from monthly and annual charges, and setup charges.

But remember that even the very best free bank account options can come with charges for extra services.

These might include charges for:

  • Cash withdrawals: This charge varies depending on the free business banking account you choose. If you'll be taking cash out regularly, find an account with the lowest charge for cash withdrawals

  • Bank transfers: Sending money to another account in the UK can come with a charge. This varies depending on the free small business bank account you choose

  • Replacing cheques: If a cheque you send gets lost, or you make a mistake when writing one, most free business accounts charge you to cancel the first one

  • Sending money abroad: All business current accounts charge a fee if you need to do an international money transfer.

So when you find a business bank account, no fees is a big bonus, but there may well be lots of other charges to think about.

Compare the charges associated with each free business account, UK wide, to help you find the cheapest one.

Can I switch my no fee business account?

Your free business banking switch is simple with The Current Account Switch Service. It makes it hassle free to move your free business banking or free online business bank account elsewhere.

The Current Account Switch Service is free to use, and open to anyone with a UK bank account. It handles all the details involved with moving your free business bank account, such as standing orders and direct debits.

If you've got payments coming into your old account, they'll be redirected to your new account. And the person who made the payment will be told about the change, too.

What features should I look for in my free business banking?

When you're looking for the best free bank account, UK wide, it's important to know what you're looking for.

Whatever size your business is, your company's business account is an important tool. It helps you track your finances and manage day-to-day banking.

Free business banking, UK wide, can come with lots of different features and perks. These might include:

  • Overdraft: This is an efficient way to borrow money through your bank account, although it can be expensive

  • Debit cards: These mean you and other employees can spend in person, online or by phone

  • Online banking: With a free online business account you can manage your account and make payments through your bank's website or app. This is good for banking on the go

  • Post Office banking service: Businesses which deal in cash can use this service to deposit into their account

  • Interest: Some banks will pay you interest as a reward for keeping your business' money in their bank

  • Accounting software integration: Link third-party software and apps to your free company account. You can track transactions without putting them in manually.

Not all fee-free bank accounts, UK wide, offer the same services. Some of these features aren't available with some free business accounts. So it's important to shop around for the best free business account for your needs.

You can also explore options for a paid if you can't find the right free business current account for you.

What are the benefits of a free business account?

There are several perks of free business banking accounts. Here are some examples:

  • It's less confusing. For tax and accounts purposes, having separate accounts can make things much simpler. You'll save on admin time.

  • It looks professional. For the sake of your business, free banking is a good way to look more professional. It means your clients will see you have a business account, but you won't be spending out on an expensive paid-for business account

  • You can build up a credit rating for your business. This will make it much easier to get business loans and credit cards in future.

  • You can cash in cheques made out to your business. This can be helpful to you and your customers.

  • You might get extra support. Some banks offer additional help and advice to business account holders.

  • It's better if you get investigated by HMRC. They'd only need to look at your business account, rather than sifting through all your personal finances.

  • You won't be breaking your bank's terms and conditions. Some banks have a clause in the small print which says you can't use their personal accounts as business accounts.

Of course there are some cons to a fee-free business account, too. Free banking for small businesses is never completely fee-free, and a business account is still likely to cost you more.

Plus, with a fee free business bank account and a personal account, you'll have double the cards, cheque books, statements and passwords to take care of.

How do I open a free business bank account?

It's easy to open a free business checking account. As long as you're eligible to open one, you can do it in a bank branch, online, or over the telephone, depending on which free company bank account you've chosen.

You'll need to share business and personal details, as well as some ID and documents. Check with the bank what you'll need so you can gather the right information and documents before you apply.

Free business bank accounts FAQs

Q

How long does it take to get a business account?

A

It could take minutes if you apply online or in a branch, but it could take longer if the bank needs more information about your business.

Q

Can I switch my business account to another?

A

Yes, if you employ less than 50 employees you can use the Current Account Switch Service. For larger businesses, ask your new bank to arrange it.

Q

Can I use a personal current account instead?

A

Your bank may let you, but only if you are a sole trader or your business is a partnership. Check with your bank before you set up an account.

Q

How much can I pay into my business account?

A

Most accounts have a minimum and maximum balance set by the bank. You may be charged a fee if your balance gets too low or high.

About our free business bank accounts comparison

Q

Who do we include in this comparison?

A

We include business current accounts from our panel of UK banks and building societies. They are all regulated by the Financial Conduct Authority (FCA). Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.

Last updated: 17 November, 2020