Business bank accounts for startups: free months versus free forever
Important: This guide provides general information, not personalised financial advice. Financial products, rates and eligibility rules can change, so check the provider’s current terms before applying. You can check a firm’s details on the FCA Register.
Quick answer
Startups usually choose between an app-led account that’s free with no end date, and a high-street account that’s free for a set period and then charges a monthly fee. The right choice depends on whether you’ll use branches, lending and relationship support in your first couple of years.
Our pick for a startup that wants no monthly fee from day one: Starling or Monzo Business Lite. Our pick for a startup that wants a high-street bank: compare Barclays (12 months free, then £8.50 a month) and Santander (12 months free, then £9.99 a month).
Startup options compared
| Provider | Monthly fee | Extras for startups | Protection |
|---|---|---|---|
| Starling | No monthly fee | Xero, QuickBooks and FreeAgent feeds via Starling Marketplace | Bank — FSCS protected |
| Monzo Business | Lite: free. Pro: £9 a month (first month free). Team: from £25 a month | Xero, QuickBooks, FreeAgent and Sage on Pro and Team | Bank — FSCS protected |
| Tide | Free plan: no plan fee. Smart £12.49, Pro £27.49, Max £69.99 a month | Direct Xero feed (updates every 24 hours) | Tide isn’t a bank. Most accounts are held with ClearBank (FSCS); some older e-money accounts aren’t FSCS covered |
| Barclays | No monthly fee for 12 months, then £8.50 a month; transaction charges apply | 12 months of Sage free, then 50% off | Bank — FSCS protected |
| Santander (Business Current Account – Classic) | 12 months’ free everyday banking for start-ups and switchers, then £9.99 a month | 6 months of Xero free (offer, T&Cs apply) | Bank — FSCS protected |
| HSBC | Small Business Banking Account: no monthly fee. Business Banking Account: £10 a month (12 months free for start-ups and switchers) | Check HSBC | Bank — FSCS protected |
Figures as of 3 October 2026, taken from each provider’s own website. Fees, plans and eligibility change, so check the provider before applying.
Who it’s for
- New businesses opening their first account
- Founders planning to apply for a loan or overdraft later
- Startups that want to open an account quickly and start trading
- Founders comparing introductory offers from high-street banks
Who should skip it
These are general points to weigh up, not advice. You may want to look elsewhere if:
- You’ve traded for years and are switching — see switching offers instead
- You need an account with no monthly fee long term but want a high-street bank — check what you’ll pay after the free period
- Your business will hold large balances early — check protection and savings options
- You want advice on funding — speak to an adviser
Full explanation
Free forever or free for now?
Work out your likely monthly cost after year one. If you’ll mostly use an app and rarely need a branch, a no-fee app account may cost less over time. If you expect to borrow, value a relationship manager or need branch counters for cash, a high-street account’s monthly fee may be worth it.
Opening order
Register your business first — with HMRC as a sole trader, or at Companies House for a limited company — then open the account. Our startup guide sets out the steps, including tools to set up alongside your bank.
Planning for later
Lenders often look at your trading history with them. If you expect to need a loan, it may help to bank with a provider that lends to businesses like yours. See Business loans.
Compare more: Business bank accounts compared, Business accounts with no monthly fee and Which business bank account should I choose?.
The catch
Free periods end. Barclays charges no monthly fee for 12 months, then £8.50 a month.
Santander’s Classic account gives start-ups 12 months of free everyday banking, then charges £9.99 a month. HSBC’s Business Banking Account is free for 12 months for start-ups, then £10 a month.
“Free banking” has limits. Free periods usually cover everyday transactions only; some services are still charged.
Introductory extras are offers. Software trials and gift cards can be withdrawn. Check the terms on the day you apply.
Check a provider’s current startup terms:
These go straight to each provider’s own website. They aren’t referral links and we don’t earn from them.
FAQs
What happens when a free banking period ends?
You start paying the standard monthly fee and charges. Barclays moves to £8.50 a month after 12 months; Santander’s Classic account moves to £9.99 a month.
Can I open a business account before I start trading?
Yes. Many providers accept newly registered businesses that haven’t traded yet.
Do startups get overdrafts?
Sometimes, subject to status. With no trading history, lenders may ask for forecasts or personal guarantees.
Is a startup bank account different from a normal business account?
Often it’s the same account with an introductory free period or extras for new businesses.
Can I move banks after the free period?
Yes. Many business accounts support the Current Account Switch Service, and some banks offer incentives to switchers.
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