Free business banking – this is a welcome development that’s been a long time coming. We’re so used to free personal banking in the UK that, when most of us open a business bank account for the first time, we are surprised to find out that we had to pay a monthly fee (and much more) for the service.
The rapid recent growth of free business accounts has been fuelled by the rise of challenger banks following the Great Crash of 2007-2008, the transformative technology and connectivity of the internet, and the rise of the smartphone.
On this page, we look at the business bank accounts that are truly free but what do we mean by free? The bank accounts we consider below do not charge you a monthly fee for having an account. They charge you for a lot of other things but they don’t charge you a subscription.
There are many banks which offer an initial period of free banking to start-up business and to current account switchers but we’re not covering them in this article.
Free business banking comparison
There are currently 10 banks in the UK offering business accounts with no monthly subscription. Eight of them are new challenger banks and two of them are brand names belonging to one of Britain’s biggest financial institutions.
|Bank name||Free introductory period?||Cost per transaction||Monthly fee?|
|Amaiz business bank account||1 month trial||20p||Free or £9.99|
|Anna Bank business bank account||3 month free trial then Free for as long as your monthly income is less than £500 and your maximum balance is less than £5,000||Free||Free to £24.90 a month|
|Coconut business bank account||Free service unless you upgrade to £5 per month||Free||Free|
|Counting Up business bank account||First 6 months free for standard and premium package. Free forever on Starter Package||0.2||Free|
|Holvi business bank account||No||Free||Free|
|Mettle business bank account||Free||Free||Free|
|NatWest business bank account||18 months’ free business banking for start-ups||£0.35||Free|
|Royal Bank of Scotland business bank account||24 months’ free banking for companies of <£1m T/O trading for less than a year||0.35||Free|
|Starling Bank business bank account||Free||Free||Free|
|Tide business bank account||No fees. Get £50 when you open an account||0.2||Free|
More on the free business banking options listed
Amaiz free business bank account
Amaiz describes itself as the “premium banking service for small businesses, freelancers, and start-ups”.
They’re currently offering a 30-day free trial to clients but, if it’s a free trial, why is it appearing in an article about free-forever business bank accounts?
It’s because they have two accounts – a free package (the “Starter”) and a £9.99 a month package (the “Advanced”). The only apparent differences between them is that the Advanced package gives you access to their in-house team of accountants, a self assessment tax calculator, and a Making Tax Digital-compliant suite for VAT calculation and payments.
The Starter Package seems very generous and comes complete with:
- a contactless business MasterCard,
- a separate Jar account,
- free cash withdrawals,
- free cash top-ups at the post office, and
- integration with leading online bookkeeping and accounting packages like FreeAgent.
Anna free business bank account
Anna offers a free bank account with a lot of interesting features to British companies.
Anna is one of the new wave of financial institutions combining the best parts of a traditional business bank account with the best parts of an online bookkeeping and accounting app.
An Anna bank account comes with free local transfers, a free debit card, free direct debit payments, instant payment notifications, and free ATM withdrawals (up to £100 a month). With its app, you can send out custom invoices and invoice payment reminders to clients from your mobile phone.
Pretty soon, their app will be able to link with popular accounting packages like Xero and Quickbooks – they’re not quite ready with that or their international transfers service just yet though.
The Anna free business account is free for life but it’s only free as long as you turn over less than £500 a month and/or your bank balance is £5,000 or less. Otherwise, the service costs between £4.90 and £24.90 a month.
Anna has no branch network yet and no way of allowing customers to pay cash or cheques in at the Post Office or other retail outlets.
Coconut free business bank account
Coconut’s offering is very much in the same vain as Anna’s – a joint banking and bookkeeping app and bank account. And, like Anna, they’re targeting freelancers, contractors, side hustlers, the self-employed, and microbusinesses (less than 10 people).
Their account is free of charge however, if you want to switch on the bookkeeping services on their app, there is a charge of £5.
The bookkeeping app:
- keeps track of your expenses,
- constantly updates its estimate on the tax you’re accruing, and
- allows you to create and send invoices
Coconut has no branch network but you are able to use the UK’s 11,500 Post Office counters to pay in cash and cheques.
Counting Up free business bank account
Counting Up launched its joint bookkeeping app and bank account service to contractors, freelancers, micro businesses, consultants, construction professionals, and drivers in September 2017. It now has 10,000 account holders on its books.
Like the Anna account, the service is completely free…until you start turning over £500 a month or more. Then, you’ll be charged £4.95 a month rising to £9.95 a month when your monthly turnover surpasses £4,000.
With the Counting Up service, you benefit from:
- automated bookkeeping via the app
- bill management (including receipt capture with your mobile phone camera)
- a Mastercard you can use at ATMs
- pay cash into your account at the Post office or at a PayPoint retailer
- foreign currency transactions priced at 3%
New customers benefit from six months’ worth of free inbound and outbound transactions. After the six months has expired, you get 3 free a month and any transactions after that are charged at 20p.
Holvi free business bank account
Holvi also marries up a business bank account with a bookkeeping app. Its self-stated mission is their service is “Simple. Powerful. Holvi is digital banking for freelancers and small business owners like you.”
Compared with the other new banks we’re listing, you actually do get quite a lot free with Holvi including unlimited bank transfers in the UK and Europe, a Business MasterCard, receipt storage, and bookkeeping report preparation. All for nothing.
There are some things you have to pay for including a 2.5% withdrawal fee at ATMs and there is a monthly fee levied on any additional MasterCards you give to other members of staff.
There is a paid-for “Basic” service at £9 a month but the only real difference we can see is that the basic service includes the ability to create, send, and track invoices.
Mettle free business bank account
Part of NatWest, Mettle is an attempt by the banking giant to create its own disrupting force. The service is aimed at the rapidly expanding number of self-employed people in the UK – sole traders and limited companies with 2 owners.
Mettle is, as with many of the other services here, a hybrid bank account and bookkeeping app. There is no monthly charge for their service and all electronic payments are currently free too.
Despite it being part of NatWest, you can’t actually use any of their branches currently to pay cash or cheques in. They have no arrangements either with the Post Office or PayPoint so there is literally no branch network to speak of with Holvi.
Although still in development, its app seems to be a lot more advanced than its competitors with bookkeeping tasks like payment categorisation and the addition of receipts to items of expenditure.
This is the main webpage showcasing the Mettle business bank account. There is currently no pricing tariff on their website.
NatWest business free bank account and Royal Bank of Scotland free business bank account
We have joined these two banks together because they are owned by the same parent company and their offers are essentially identical to each other.
NatWest (960 branches) and RBS (700 branches) offer an extended period of free banking to start-up businesses (but not to switchers). NatWest offer 18 months whereas RBS offer 24 months.
After the period has ended, their normal monthly subscription of £5 applies.
So why are we including them in this article? It’s because they waive the charge completely if your transaction charges are more than £5. It will only take you a few transactions to get over that in a month so we think that it’s justifiable to include them for that reason.
Starling Bank free business bank account
Starling is another bank account-cum-bookkeeping app competitor in the free business bank account market.
They are currently developing a comprehensive app-based “Business Toolkit” which they are getting excited about promoting on their website – with the functionality they say it is going to have, Starling may become a leader in its target market of freelancers, contractors, the self-employed, and small businesses.
Starling charge no monthly fees and they make no charge either for Faster Payments, Direct Debits, and Standing Orders.
Unusual among the newer banks, they also man their phones taking calls and enquiries from customers 24 hours a day. Even more unusual is that, subject to status, they offer an overdraft.
Starling have signed an agreement with the Post Office which allows its members to pay cash and cheques in at any of the 11,500 counters across the UK.
This is the Starling Bank webpage about their business account offering. There is currently no pricing tariff page or download on their site.
Tide free business bank account
Tide is now used by 100,000 freelancers, contractors, small businesses, and businesses scaling up in the UK on their mission to “give owners their time back”.
The Tide app allows you to manage cards linked to your business account and to sync to your existing online bookkeeping and accounting package.
Tide do not charge a monthly fee nor do they charge for card usage. They do charge you for making or receiving a transfer from a non-Tide account, for cash deposits (at the Post Office or a PayPoint retailer), and for cash withdrawals.
Unlike Starling, they don’t offer an overdraft but customers can apply for a revolving credit facility via specialist lender Iwoca for up to £150,000.
Free business bank account FAQ
Why are some bank accounts free and others not?
The decision on whether to charge a monthly or annual fee for a business bank account is a commercial decision for each bank. For larger and more established banking organisations, it may not be financially viable for them to offer bank accounts with no ongoing fees because of their overheads.
How should I choose between the accounts on offer?
The absence of a monthly or annual fee does not necessarily mean that your costs will be cheaper. If your business is responsible for a high number of transactions, the fees you pay on those transactions may be higher than the fees you’d pay to a bank which charges to keep an account open for you.
If yours is a new business, there will be a certain amount of guesswork on the volume of transactions you make. This will mean that it’s harder to accurately assess in advance which bank account might offer you the best value for money.
If yours is an established business, you may be able to work out using your historical financial records which one is cheaper than the other.
Is it easy to switch from one account to another?
The Current Account Switch Guarantee makes changing from one bank to another much easier. You simply pick the bank and the account you want together with a preferred date of switching (subject to a minimum period of 7 days after applying to the scheme).
Once you have done that, your current and your new bank handle the switching process for you including the transfer of any existing direct debits and standing orders to your new account.
Not all banks listed in this article are members of the Current Account Switch Guarantee scheme.
Can larger businesses get free business bank accounts?
Most banks separate their commercial banking into “business banking” for companies with small turnovers (usually £2m or less) and “corporate banking” for companies with larger turnovers.
The free business bank accounts listed in this article are for companies with smaller turnovers.
There are currently no advertised offers for free corporate banking services. You may find it difficult to negotiate free corporate banking services because of the relative complexity of the financial structure of your company and the amount of work that this complexity creates for your bank.
What charges should I expect
to pay on a free business bank account?
Because your bank is not collecting a monthly account fee from you, it will generally have to charge you for services that might cost no extra with other banks.
You may be charged for some or all of the following selection of transactions:
- ATM withdrawals
- Faster Payments
- CHAPS payments
- direct debits
- standing orders
- debit card payments
- branch faster payments
- online banking
- mobile banking
- telephone banking
- paying a cheque or cash into a branch
- international transactions
- foreign exchange transactions
- duplicate statements
- bank drafts
- special cheque clearances
You may have to pay higher fees for the services on offer by competitor banks which do charge a monthly fee. These may include annual card fees, overdraft set-up charges, merchant service accounts (allowing you to take card payments from clients), and unauthorised borrowing fees.
Should I use my personal
account to do business with?
If you can avoid it, you should not use your personal account to transact business.
The two main reasons for this are:
- lack of credibility – some customers and suppliers may choose not to deal with you if they are making payments to or receiving payments from a personal bank account, and
- difficulties in bookkeeping and accounting – a business bank account allows you to keep your company’s expenditure apart from your own making financial recordkeeping easier. If personal and business transactions are carried out from one account, your accountant will have to spend time separating and classifying them. The additional time your accountant spends doing this will cost you money.
Do free business bank accounts pay interest?
Generally, free business bank accounts do not pay interest.
You will have to apply to a bank for a separate business savings account. Most high street banks offer savings accounts with either instant access or with delayed access (you have to give a certain amount of notice to withdraw money). Delayed access accounts generally pay a higher interest rate to savers.
At time of writing, Bunq is the only bank listed in this account which pays interest on its accounts.
Free business bank account – in conclusion
Please remember that price should not be the sole determinant of the bank you eventually decide to choose.
Many of the banks listed in this article are unable to offer overdrafts, business finance, and other services which may be of use to you.
Before you come to a decision, make a list of every banking and financial product you think you might need over the coming months and years as your business grows and develops.
However, please also bear in mind that you should not automatically select any financial product to you offered by your bank – there may be cheaper and more suitable alternatives out there for you. For example, your bank might offer invoice factoring but there are dozens of other companies out there which also do and which might do a better job for you and your business.