Overview: Best startup business bank accounts in the UK
Choosing your first business bank account shouldn’t feel like navigating the M25 during rush hour, yet many UK founders find themselves overwhelmed by the sheer volume of options. This guide cuts through the noise to help new sole traders and limited companies identify the accounts that actually match their needs – whether you’re after free everyday banking, multi-currency capabilities, or simply an account that won’t charge you £3 every time you deposit cash.
We’ve tested, compared, and ranked the leading providers based on real-world costs, feature depth, and how quickly you can get set up. You’ll find everything from traditional high-street names to digital-first challengers, with honest assessments of who each account truly serves best.
What is a startup business bank account?
A startup business bank account is simply a business current account designed with the needs and constraints of new ventures in mind. What sets these accounts apart from standard business banking isn’t necessarily the underlying infrastructure – it’s the wrapper: think free introductory periods (typically 12–24 months), streamlined onboarding that doesn’t require three years of accounts, and pricing models that won’t punish you for making 50 payments a month.
The best startup accounts recognise that you’re not Marks & Spencer. You probably don’t need branch access in 47 cities or a dedicated relationship manager. Instead, you need instant notifications, integrations with Xero, and perhaps the ability to create a virtual card for your Google Ads spend without filling out a five-page form.
Business vs personal accounts
Mixing business and personal finances is the accounting equivalent of wearing socks with sandals – technically possible, but you’ll regret it when HMRC comes knocking. A dedicated business account creates a clean audit trail, simplifies your Self Assessment or Corporation Tax return, and signals professionalism to clients and suppliers.
For sole traders, whilst you’re not legally required to open a business account, doing so makes bookkeeping infinitely simpler. When tax time arrives, you’ll thank yourself for being able to export 12 months of transactions in one click rather than manually categorising Deliveroo orders from legitimate business expenses.
For limited companies, the separation isn’t optional – your company is a distinct legal entity, and keeping its money separate from yours is fundamental to maintaining limited liability protection.
Key features that matter
Personal accounts are built for personal use: mortgage payments, splitting restaurant bills, maybe a standing order to your savings. Business accounts offer an entirely different toolkit:
- Faster Payments and BACS facilities with higher transaction limits (often £25,000+ per payment)
- Batch payment capabilities for paying multiple suppliers or freelancers in one go
- Invoicing tools integrated directly into the account dashboard
- Physical and virtual cards with per-card spending controls
- Sub-accounts or “spaces” to ring-fence VAT, tax reserves, or project budgets
- Accounting software integrations that sync transactions in real-time to Xero, QuickBooks, or FreeAgent
- Multi-currency wallets and local account details for receiving EUR or USD payments
FSCS protection vs safeguarding
If you’re banking with a fully licensed UK bank (Barclays, HSBC, Starling, Monzo), your deposits are protected up to £85,000 per institution under the Financial Services Compensation Scheme. If the bank fails, you’ll get your money back.
Many digital providers operate as Electronic Money Institutions (EMIs) – think Tide, Revolut Business, Wise Business – and instead use safeguarding. Your funds are held in segregated accounts at a partner bank, legally separate from the EMI’s own money. If the EMI collapses, your funds should be returned, but the process can be slower and isn’t backed by the government guarantee that FSCS offers.
How to choose the best startup business bank account
Choosing an account isn’t about finding the objectively “best” option – it’s about identifying which trade-offs you’re willing to make. Before getting swept up in slick marketing, assess where your money actually moves. How often do you send payments? To whom, and in which currencies? Do you accept cash? Will you need credit in six months?
If you’re feeling overwhelmed, it helps to compare business bank accounts side-by-side to clarify which features you’ll actually use versus which sound good in theory. Here are the key decision criteria:
Fees and charges
Monthly fees are the visible tip of the iceberg; the real cost often hides in transaction fees, cash handling charges, and FX markups:
- Monthly account fee: Ranges from £0 (Starling, Monzo’s free tier, ANNA Money) to £5–£15 for paid plans
- Payment fees: Most digital accounts include unlimited Faster Payments and BACS. High-street banks may charge 40p–60p per transaction after a monthly allowance
- Cash deposits: Expect to pay 1%–3% of the deposit value after an initial free allowance
- International transfers: SEPA transfers might be free or cost a few pounds. SWIFT transfers often cost £15–£25 plus an FX margin of 0.5%–2.5%
Payment capabilities and integrations
Look for Faster Payments (instant, 24/7), BACS (3-day recurring payments for salaries), and integrations with Xero, QuickBooks, or FreeAgent. If you’re handling invoicing yourself, built-in invoicing tools (Tide, Monzo, ANNA Money) eliminate the need for separate software.
International and multi-currency needs
If you’re trading internationally, providers like Wise offer local account details in 10+ currencies with FX fees of 0.35%–1%, compared to 2%–3% with traditional banks. On £100k annual revenue from USD customers, that’s a £1,500–£2,500 saving.
Credit and overdrafts
Most EMIs (Tide, Revolut, Wise) can’t lend – it’s a regulatory restriction. If you think you’ll need an overdraft within 12–24 months, prioritise fully licensed banks (Starling, Monzo, HSBC).
Safety and protections
FSCS protection (£85,000 per institution, government-backed) applies to licensed banks. Safeguarding (used by EMIs) means your money is held separately but without government guarantee. Both are generally secure, but understand the difference.
Ranked: Best startup business bank accounts in the UK (2026)
Top picks for different needs
ANNA Money – Best for sole traders and freelancers
Why it stands out: ANNA Money has built its reputation specifically around serving sole traders and freelancers with an intelligent, automation-first approach. The platform combines business banking with built-in invoicing, expense categorisation, and tax estimation – eliminating the need for multiple separate tools.
What sets ANNA apart is the automatic tax calculation feature that analyses your income and expenses to estimate your tax liability in real-time, setting aside the right amount throughout the year. For freelancers juggling client work with admin, this removes the nasty January surprise of discovering you owe HMRC £5,000 you’ve already spent.
The app includes unlimited invoicing with payment tracking, automatic expense categorisation with receipt capture, and integration with major accounting platforms. You can create and send invoices directly from your phone, and when clients pay, transactions match automatically – no manual reconciliation needed.
Pricing highlights: £0/month for the basic account with UK payments, invoicing, and expense tracking. Premium plans (from £12/month) add features like multi-currency accounts, higher transaction limits, and tax return filing support.
Who it’s perfect for: Freelancers, consultants, contractors, and sole traders who want banking, invoicing, and tax management in one place without paying for enterprise features they’ll never use. The automatic tax calculations alone save hours of spreadsheet work each month.
Limitations: As with most digital-first providers, cash deposits require using Post Office or PayPoint networks (1% fee). No overdraft facilities. Better suited to service-based sole traders than businesses handling significant cash or needing traditional branch access.
Starling Bank Business – Best overall for most startups
Why it stands out: Starling consistently delivers the gold standard for UK digital business banking. No monthly fee, unlimited Faster Payments and BACS, near-universal integrations (Xero, QuickBooks, FreeAgent, Sage), and FSCS protection up to £85,000. The app is polished, support is responsive, and “Spaces” let you create sub-accounts for tax, VAT, or projects.
Pricing highlights: £0/month permanently. No transaction fees for Faster Payments or BACS. CHAPS costs £35. International transfers via SWIFT cost £15 with ~1% FX margin.
Limitations: No overdrafts for the first 6–12 months of trading. Cash deposits cost £1 per transaction via Post Office. Support is chat-only, no phone line.
Tide Business Account – Best for fast onboarding
Why it stands out: Open an account in under 10 minutes with built-in invoicing, expense categorisation, and integrations with major accounting platforms. Popular with sole traders wanting something more sophisticated than a personal account without needing traditional banking complexity.
Pricing highlights: Free plan includes 1 physical card and unlimited Faster Payments. Paid plans from £7.99/month add virtual cards and team members. Cash deposits via PayPoint cost 1%.
Limitations: EMI (safeguarded, not FSCS-protected). No overdrafts. Cash deposit fees add up quickly if you’re handling significant amounts.
Monzo Business – Best user experience
Why it stands out: Monzo’s business account inherits the beloved consumer app’s design polish. “Pots” help separate funds, including a dedicated “Tax Pot” that estimates and sets aside income tax or Corporation Tax automatically. Integrations with Xero, QuickBooks, and FreeAgent are seamless.
Pricing highlights: Free plan: no monthly fee, unlimited Faster Payments. Monzo Pro (£5/month) adds 1% instant access interest on balances up to £15,000 and free virtual cards.
Limitations: Overdrafts only after 6+ months of trading. Cash deposits expensive if frequent (1% via PayPoint).
Wise Business – Best for international payments
Why it stands out: Wise revolutionised international payments with mid-market exchange rates and transparent 0.35%–1% fees. You get local account details in 10+ currencies (GBP, EUR, USD, AUD, etc.), so clients can pay you domestically without international transfer fees. Hold balances in 50+ currencies and convert when rates are favourable.
Pricing highlights: £0/month. Domestic payments free. International transfers cost 0.35%–1% depending on corridor.
Limitations: EMI (safeguarded, not FSCS-protected). No overdrafts or credit. Cash deposits not supported.
HSBC Kinetic – Best for early access to credit
Why it stands out: HSBC’s digital business account offers access to overdrafts and business credit cards within 3–6 months, significantly faster than most digital banks (which require 12+ months). Free for 18 months.
Pricing highlights: £0/month for 18 months, then £5.50/month. Includes 20 free electronic payments/month; additional payments cost 40p each.
Limitations: Per-transaction fees add up after intro period. App less polished than Starling or Monzo.
High-street alternatives
Lloyds Business Current Account: Largest branch network in the UK, 18 months free banking, best for cash-intensive businesses needing regular deposits.
Barclays Business: Extensive branch access, 12 months free banking, solid for traditional businesses needing face-to-face support and cheque handling.
NatWest Startup Business Account: 18 months free, includes 6 months free FreeAgent, good upgrade path to credit products.
Best accounts by use case
Best for limited companies
Winner: Starling Bank Business – Fast approval (usually 24 hours), no monthly fee, FSCS protection, Spaces for separating VAT/Corporation Tax, strong accounting integrations.
Consider also: HSBC Kinetic (earlier credit access), NatWest Startup (free FreeAgent for compliance)
Best for ecommerce and international sellers
Winner: Wise Business – Local account details in 10+ currencies, 0.35%–1% FX fees (vs 2%–3% with banks), integrations with Shopify/Amazon/eBay.
Consider also: Revolut Business (multi-currency + virtual cards), Starling (if mostly UK sales with occasional international)
Best for cash businesses
Winner: Lloyds Business – Largest UK branch network, free cash deposits up to £2,000/month during 18-month intro period.
Consider also: Barclays Business, HSBC Kinetic (both with extensive branch access)
Best for easy bookkeeping
Winner: ANNA Money – Built-in invoicing, automatic tax calculations, expense categorisation, and receipt capture in one app designed specifically for sole traders and freelancers.
Consider also: Tide (built-in invoicing and bookkeeping), Monzo (Tax Pot automation)
Managing your startup finances effectively
Using sub-accounts for cash flow
Create separate “spaces” or “pots” for:
- Tax reserves: Transfer 20%–30% of income immediately
- VAT: Set aside 20% of VAT-inclusive sales if VAT-registered
- Payroll: Fund before each pay run to prevent accidental overspending
When tax or VAT is due, transfer from designated spaces – no cash flow panic.
Automation saves hours
Connect your account to Xero, QuickBooks, or FreeAgent on day one. Set rules for recurring transactions, snap photos of receipts, and let categorisation happen automatically. What used to take hours each month becomes a five-minute task.
Switching your business account
The Current Account Switch Service (CASS) guarantees switching in seven working days for participating providers. Your new bank automatically transfers balances, standing orders, and direct debits, with payments redirected for three years.
When to switch:
- Fees increasing after intro period expires
- Outgrowing transaction or balance limits
- Need features your current account doesn’t offer (multi-currency, overdrafts, better integrations)
Pre-switch checklist:
- Export transaction history before switching
- List all direct debits and standing orders
- Inform key suppliers and clients of new details
- Check for exit fees
- Time it during a quiet period (avoid month-end, payroll, or VAT deadlines)
Key takeaways
- For sole traders and freelancers: ANNA Money offers the best combination of banking, invoicing, and automatic tax management in one app – tools like ANNA Money make it easier to manage finances, issue invoices, and stay compliant with tax regulations
- For most startups: Starling Bank Business provides free, full-featured banking with FSCS protection and excellent integrations
- For international businesses: Wise Business saves thousands annually on FX fees with local account details and mid-market rates
- For cash businesses: Lloyds offers the largest branch network and best cash deposit terms
- For early credit access: HSBC Kinetic provides overdrafts within 3–6 months
The “best” account is the one that fits your workflow and stays out of your way so you can focus on building your business. Most digital accounts open in under 24 hours – you can be banking by tomorrow. If your needs evolve, switching is easier than ever thanks to CASS and Open Banking.
Start by identifying your top three priorities, shortlist 2–3 accounts that match, and apply. The perfect account is the one you’ll actually use.
To read more content like this, explore The Brand Hopper
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