What’s the catch with “free” business bank accounts?
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
“Free” usually means no monthly fee — not no fees. The common catches are capped transfers, charges on money coming in, cash deposit fees, currency fees, free periods that end, and accounts that are e-money rather than bank accounts.
Our pick for a free account with the fewest catches we found: Starling — no monthly fee and no fees on UK payments in or out, with cash deposits the main charge (0.7%, minimum £3).
Free accounts and their catches
| Account | What’s free | The catch |
|---|---|---|
| Tide Free plan | No plan fee | 5 bank transfers a month; 2.75% on card spending abroad; some older accounts are e-money |
| ANNA Free plan | £0 a month | 0.95% on incoming payments above £1,000 a month; e-money, not FSCS protected |
| Monzo Business Lite | Free | Accounting integrations need Pro (£9 a month) or Team (from £25) |
| Mettle | No monthly fee | FreeAgent included only if you make one transaction a month; up to two owners |
| Starling | No monthly fee; no fees on UK payments | Post Office cash deposits 0.7% (minimum £3) |
| Barclays (start-up/switcher period) | No monthly fee for 12 months | Then £8.50 a month; transaction charges apply |
| Santander Classic (start-up/switcher period) | 12 months’ free everyday banking | Then £9.99 a month |
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
- Anyone attracted by a “free business account” headline
- Businesses growing out of a free plan
- Owners comparing free app accounts with high-street offers
- Bookkeepers reviewing clients’ bank costs
Who should skip it
These are general points to weigh up, not advice. You may want to look elsewhere if:
- You already pay for a plan whose features you use
- You need branch and relationship support more than low costs
- You want a straight comparison table — see the comparison table
- You need advice on a charge dispute — contact your bank first
Full explanation
Why free accounts have catches
Providers have to earn money somewhere — interchange on card spending, paid upgrades, lending and charges for extras. None of that is sinister, but it means the cheapest account depends on how you use it.
E-money versus bank
Some free accounts are e-money accounts. Your money is safeguarded — kept separate from the provider’s own funds — but it isn’t covered by the FSCS.
ANNA’s main account is e-money. Money held with a UK-authorised bank is usually protected by the Financial Services Compensation Scheme (FSCS) up to £120,000 per eligible depositor, per banking licence (source: FSCS).
Free periods
High-street free periods are genuinely free for everyday transactions, but they end. Put a reminder in your calendar a month before, then compare.
More: Business fees FAQs, Which business bank account should I choose? and FSCS protection limits.
The catch
The biggest catch: some “free” business accounts become expensive once you start growing — more transfers, more cash or more currency can turn a free plan into the costliest option.
Price your own month across accounts:
FAQs
Are free business bank accounts really free?
Usually they have no monthly fee, but charges can apply for transfers beyond an allowance, cash, currency or incoming payments.
Which free business account has the fewest charges?
Of those we checked, Starling charges no monthly fee and nothing on UK payments in or out; cash deposits are the main charge.
Are free accounts FSCS protected?
Bank accounts usually are, up to £120,000. E-money accounts, such as ANNA’s main account, aren’t.
What happens when a free period ends?
You start paying the standard fee — £8.50 a month at Barclays, £9.99 a month on Santander’s Classic account.
Should I avoid free accounts?
Not at all. Just check the charges you’d actually trigger.
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