Best Business Bank Account For Startups

best business bank account for startups
Make the right choice for your business. Check out this guide to the best business bank account for startups.

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With so many to choose from, which is the best business bank account for startups? This guide will give you our 5 most recommended.

Don’t forget to compare business accounts offered by digital banks for an alternative to traditional banking.

If you’re starting a new business, make sure you take a look at our checklist for starting a business so you don’t miss anything.

Check out these guides if you’re thinking about applying for small business loan or a startup business loan. More information and advice can also be provided by the banks listed below.

In this guide to the best business bank account for startups

  1. HSBC Kinetic Current Account
  2. Lloyds Startup and Small Business Account
  3. NatWest Startup Account
  4. Barclays Startup Business Account
  5. Cooperative Banking Business Current Account

1. HSBC Kinetic Current Account

Our top pick is the HSBC Kinetic Current Account. This is a the best startup business bank account in our opinion, due to its introductory offer, low fee structure, and solid banking features.

The introductory offer lasts for 18 months. During this period, you get free banking – this means no transaction fees and no monthly service fee. After this, there is a relatively low monthly service fee of £6.50.

Most of the important transaction types also remain free – including automated credits, internal transfers, debit card transactions, direct debits, and standing orders. This makes it one of the most cost-effective accounts for startups.

We also like the quick application process. You can actually apply via the mobile banking app and it is a quick process. The Kinetic app itself is also packed with features such as cash flow and spending insights to help keep track of your spending during those all-important first months.

There is also the option to apply for an overdraft of up to £30,000 via the app – subject to approval, with a representative EAR of 10.91%.

Features

  • Full payment management including direct debits and standing orders
  • Includes a Kinetic Debit Card which you can easily freeze and unfreeze
  • Overdraft application available via the mobile app
  • Supports daily payments of up to £25,000 in-app
  • Detailed spending and cashflow insight analysis

Pros

  • Can also apply for an instant savings account
  • 18-month introductory offer with free banking
  • Most types of payments and receipts are free to process
  • The mobile app gives great control and is easy to use

Cons

  • After the initial introductory period, there is a £6.50 monthly fee

2. Lloyds Startup and Small Business Account

Lloyds regularly ranks as having one of the best startup business bank account, as it has a good selection of business accounts. It is important to note that currently, Lloyds is not accepting switching business accounts – you can only apply for a new account.

Their Start-Up and Small Business Account has a decent introductory offer of 12-months. During this period, you get free day-to-day business banking. This is vital during your initial period of operation as costs will need to be monitored tightly.

Once the introductory offer has expired, there is a reasonable monthly service fee of £7.00. You also still get free electronics payments in and out. However, there are some charges for other transactions. Cash payments in or out are subject to a £1 fee per £100, and both cheques and credit in payments are subject to an £0.85 fee.

We like the versatility of the Lloyds mobile banking app. This allows you to manage your business finances effectively on the go. We also like that the application process is quick and the approval times are generally fast too, making it one of the best business bank account for startups.

Features

  • UK-based 24/7 expert customer support available
  • Includes desktop and mobile business banking apps
  • Gives access to a range of other business services such as business insurance
  • Supports payments from Cashpoints and via debit card
  • Simple application process with quick approval times

Pros

  • Has a 12-month introductory offer which includes free banking
  • All electronic payments in or out continue to be free afterwards
  • The mobile business banking app is easy to use and gives good control
  • You can gain access to a range of business training tools

Cons

  • Cheques and credits are also subject to £0.85 processing fee
  • Cash payments in or out are subject to small fees after the introductory period

3. NatWest Startup Account

NatWest is one of the most trusted building societies in the UK. They benefit from a great network of high street branches, but also have excellent online banking services too. Their NatWest Start Up Account could be a good choice for new businesses due to its FSCS protection, and absence of a monthly service fee.

On a successful application, you get 18-months of free banking. This is one of the better offers available and will give your new business stability. After 18 months, there is still no monthly service fee. However, there are other charges. These include £0.35 for automated payments, £0.70 per £100 for cash payments, and £0.70 for manual payments.

For great peace of mind for your new business, all deposits are protected by the FSCS up to £85,000. If needed, you can also apply for an overdraft. To manage your business banking, there is a mobile banking app, and you can visit branches too. We also like that the application approval can take as little as 10 minutes.

Features

  • Includes online banking via the desktop or mobile app
  • Various tools for small businesses such as Business Builder
  • Specialist services such as BACS processing are available too
  • Includes a NatWest business debit card
  • Available to new businesses with a turnover of less than £1 million

Pros

  • All deposits up to a value of £85,000 are protected by the FSCS
  • Has an introductory offer for 18 months which includes free banking
  • There is no monthly charge after the 18-months either
  • A quick application process that can be approved in as little as 10 minutes
  • Overdraft application available (subject to approval)

Cons

  • Does have various payment fees for automated payments, cash payments, and manual payments after the introductory period

4. Barclays Startup Business Account

Barclays is one of the few banks to offer two different payment plans for its startup business bank account. The Start-Up Business Account can be tailored to suit your type of business. This is via the Mixed Payments Plan or the e-Payments Plan. We like this and feel that it allows you to choose an account with no redundant features.

Regardless of the payment plan you choose, you get 12-months of free banking initially. After this, you can then go onto the mixed plan or e-payments plan. 

The Mixed Payments Plan is suitable if your business uses electronic payments, cash, and cheques. This includes lower average fees. Electronic payments have a fee of £0.35, while cash costs £0.90 per £100, and cheques £0.65 each. 

In contrast, the e-Payments plan has higher fees for non-electronic payments. Electronic payments are free, while cash payments cost £1.50 per £100, and cheques cost £1.50 each. There is also a monthly service fee of £8.00 and £8.50 respectively for each plan.

Features

  • Secure online banking via a web browser or smartphone app
  • UK-based customer support and business managers
  • Two different plans are available which give greater flexibility
  • Various account application methods including branch, phone, and online
  • Great support for accepting payments and tracking invoices

Pros

  • The mobile app allows for making payments with cash or cheques
  • The app also has a useful invoice tracker which gives various notifications
  • 12-month introductory period which includes free banking
  • ATM use and internal transfers are always free
  • Fantastic UK-based customer support

Cons

  • The monthly fee is higher than other startup accounts at £8.50 per month
  • There are charges per transaction after the introductory period

5. Co-operative Banking Business Current Account

The Co-operative Banking Business Current Account has one of the best introductory offers. This lasts for 30-months and entitles you to free banking. After this, there is a higher monthly service charge of £10.00 per month.

The debit and credit card charges remain low-cost, however after the introductory period. Automated credits, debits, ATM withdrawals, debit card purchases, and manual credits are all free. There is a £1 charge per £100 for cash withdrawals, however.

This startup business bank account also offers excellent customer support, a quality mobile banking app, and access to a range of business tools and services.

Features

  • Supports payments at various outlets including the Post Office
  • Gives access to various business, human resources, and legal tools/services
  • UK-based 24/7 customer support for registered account holders
  • Various banking either online, via mobile app, or via branch
  • Account available for sole traders and single directors

Pros

  • Excellent 30-month free banking introductory offer
  • Automated debits, ATM withdrawals, and debit card purchases remain free
  • Includes a free PVC debit card
  • A great mobile app that is easy to use and allows you to manage finances

Cons

  • The monthly service fee is much higher at £10 per month
  • Per-transaction charges for cash withdrawals and cheques

The Best Business Bank Account for Startups – Our Verdict

Any of the above 5 best business bank account for startups are all great choices for new businesses. However, our number 1 best business bank account for startups is the HSBC Kinetic account.

This startup business bank account has a slight edge. It has some of the lowest transaction fees, a great introductory offer of free banking, and some excellent features that will allow new businesses to effectively manage their money. For an alternative, check out our guide to the top 7 digital banks.

Did this guide to the best business bank account for startups help you? If so please recommend DigitalSupermarket.

Compare The Best Business Bank Account For Startups

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