Which business bank account should I choose?
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
Answer five questions in order: what type of business you are, how you handle cash, whether you trade in other currencies, which accounting software you use, and whether you’ll want to borrow. Most people end up with a shortlist of two or three accounts after that.
Our pick for most simple sole traders and small companies with little cash: a no-monthly-fee app account with UK bank protection, such as Starling or Mettle. Our pick if you handle lots of cash or want to borrow soon: a high-street bank, compared on what you’ll pay after any free period.
Five questions, five routes
| Question | If your answer is… | Where to look |
|---|---|---|
| 1. Sole trader or limited company? | Sole trader | Accounts for sole traders |
| 1. Sole trader or limited company? | Limited company | Accounts for limited companies |
| 2. Do you handle much cash? | Yes, regularly | High-street banks with branch counters; check deposit fees in fees explained |
| 3. Do you trade in other currencies? | Yes | Accounts for online sellers |
| 4. Which accounting software do you use? | Xero, QuickBooks, FreeAgent or Sage | Integrations comparison |
| 5. Will you want to borrow soon? | Yes | A bank that lends to businesses like yours; see business loans |
| None of the above apply | Keep costs low | Accounts with no monthly fee |
General guide only. Provider details on linked pages are as of 3 October 2026.
Who it’s for
- First-time business owners overwhelmed by choice
- Owners reviewing an account they opened years ago
- Anyone who wants a method rather than a list
- Businesses about to switch
Who should skip it
These are general points to weigh up, not advice. You may want to look elsewhere if:
- You already have a shortlist — go straight to the comparison table
- Your needs are specialist (charity, client money, trusts)
- You want someone to choose for you — speak to an accountant
- You’re choosing a personal account — see Banking
Full explanation
Why the order matters
Business type comes first because it rules providers in or out — for example, Mettle is for sole traders and companies with up to two owners, and Allica wants businesses trading 12 months with £50,000 or more to deposit. Cash comes second because it’s the costliest thing app accounts do.
Then price a typical month
Once you have two or three names, price last month’s activity on each. Monthly fee plus per-use charges is your real cost. Our Business account fees explained guide lists the usual charges.
Don’t forget protection
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). E-money accounts are safeguarded instead. See FSCS protection limits.
Still deciding? Read The catch with “free” business accounts and the Business banking FAQs.
What to look for in a business bank account
Once you’ve narrowed it down with the five questions above, run your shortlist through this checklist.
- Eligibility — whether the account accepts your business structure, ownership and trading history.
- Monthly fee and per-use charges — price a typical month, as explained in business account fees explained.
- Cash deposits — where you can pay cash in and what it costs.
- Payments — card payments, Faster Payments and international transfers if you need them.
- Accounting integrations — a reliable feed into your software; see the integrations comparison.
- Protection — whether it’s a bank account covered by the FSCS or an e-money account that’s safeguarded instead.
- Borrowing and support — access to overdrafts or loans later, and how you can contact the provider.
The catch
There’s no single right answer. The account that suits a cash-heavy café is different from the one that suits a freelance developer.
Your needs change. Revisit your choice when you take on staff, start trading abroad or your balance grows past £120,000 (source: FSCS).
Switching is easier than people think. Business.gov.uk says businesses with turnover under £6.5 million and fewer than 50 employees can use the Current Account Switch Service.
FAQs
What’s the first thing to decide?
Whether you’re a sole trader or a limited company. It decides which accounts you can open and how protection works.
Should I choose an app bank or a high-street bank?
App banks suit simple, digital businesses. High-street banks suit cash handling, branch visits and relationship lending. Business.gov.uk sets out similar trade-offs.
How many business accounts should I have?
One is enough for most small businesses. Some add a second to spread large balances across banking licences.
Can I change my mind later?
Yes. Many business accounts support the Current Account Switch Service.
Is this advice?
No. It’s a general method to help you choose. Check provider terms and get professional advice if you need it.
What business bank account do I need?
Start with your structure: sole traders can often use a sole trader account, while limited companies need an account in the company’s name. Then match fees, cash handling, integrations and support to how you trade. The checklist on this page covers what to look for when choosing a business bank account.
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