Best Free Business Bank Accounts in the UK

With a business bank account, you can manage your finances more effectively. While having one is not a definite requirement, most business directors benefit heavily from keeping money separate from their personal bank.

Better yet, most business accounts offer a range of benefits that have genuine benefits to running your business. Factors such as accountancy tools, invoice generators, payment card devices can really help to elevate one business bank account from another.

However, COVID-19 and the subsequent worldwide disruption have led to difficulties in business banking, particularly for new companies. Some banks are now limiting their new business account applicants to those who already hold current/personal accounts with them.

Luckily for new start-ups and small businesses, many free business banking providers offer a more modern way to open and maintain your business account.

What Is a 'Free' Business Bank Account?

Lots of business bank accounts incur a monthly fee just for having them. While many banks offer 'first x months' free, most will begin charging after a certain interval. These charges, though minimal, are yet another expense your business may not need.

Complicating things further, some business accounts also charge fees on card purchases and transactions. This can potentially lead to high costs if you're not aware of this charge.

Free business bank accounts are instead offered with no monthly fees and, often, very few charges. These accounts are typically offered by less established banks as a way to win customers from the big banks - but that just means you, the business owner, benefits from their competition.

Free Business Bank Account Offers and Comparison

We've taken a look at the business bank accounts with generous free periods and those which are 100% free forever to create a list of great free business accounts. Let's take a look at what these entail.

Summary of the Best Free Business Bank Accounts

Click the links to jump to the relevant section or read the full list below.

All figures below are taken from the listed provider's websites and are correct as of June 2021. Please note: many business banks offer different levels of access/benefits depending on the size of your business. The listings below are for accounts aimed at new & growing businesses.

Starling Business Bank Account

Starling Bank has excellent reviews across the internet, and it's easy to see why. For new businesses, their free business bank account provides everything you'll need - including the ability to apply for an overdraft.

Starling Bank accounts have no monthly fees and come with 24/7 support. The bank also offers a fully FSCS-backed financial guarantee. For those who need additional services, Starling's simple add-ons provide new services such as foreign currency holdings.

The entire experience is powered by a great mobile app that has integrations with common accountancy platforms, and also allows you to categorise spending, so you can track business finance better than ever.

• Powerful digital app for payments, invoicing and bookkeeping
• No fee business banking - zero monthly or e-payment fees
• FSCS-protected to £85,000

Monzo Business Bank Account

Monzo was one of the original 'game-changing' online banks that shook up personal banking when it launched in 2017. The app-based bank is known for its ability to track spending, assign budgets and generally help users control their spending.

For businesses, Monzo offers an exclusive business account that has two levels of access. Monzo Business Lite is totally free, with no monthly fees. It also includes lots of digital tools such as budgeting and separate 'pots' for funds. However, for just £5 per month, you can upgrade to Business Pro for more powerful accountancy features and in-app invoicing tools.

• No monthly fees at a basic level
• Free UK transfers and 24/7 support
• Digital receipt function

TSB Business Plus

Unlike most of the free accounts on our list, the TSB business bank account is a time-limited offer. However, due to the benefits of the account and length of free access, we have included it here.

TSB's Business Plus account offers a very generous 25 months of free usage, which, when considered alongside the reputation of TSB, is appealing to many UK businesses. After that free period, the cost goes to £5 per month.

TSB Business Plus also provides a free chip and pin reader enabling businesses to take card payments on their premises. If your company has any in-person sales elements, this makes TSB a great choice.

For those looking for a quick and easy way to set up a physical payment system and manage their business' funds, TSB Business Plus offers an appealing combination of two years of free banking with a free card reader.

• Free for 25 months - the longest limited 'free' period of any bank
• Free chip and pin reader for businesses
• 300 TSB branches across the UK for in-person support

Revolut

When you're looking for a free business bank account, the ability to send free bank transfers is a big bonus. While cutting monthly fees may seem more appealing, it is transaction-based fees that will add to considerable expense over time.

Revolut is an online bank that offers just that - free bank transfers in the UK and even internationally if you upgrade to their 'grow' plan. Their free account allows for five free payments per month and unlimited free payments to other Revolut accounts.

Revolut's free account may be limited in terms of transfers, but it has no monthly fees and allows for unlimited team members to be added to the account.

• No monthly fee
• Unlimited team members
• Merchant API/Payment platform for websites

Mettle

Mettle, offered by Natwest, is a bit of a 'best of both worlds' free business bank. It offers the stability and reassurance of the Natwest brand coupled with innovative digital features such as in-app bookkeeping tools and invoicing.

Mettle is about as 'free' as a business bank gets, with no account charges, no ATM charge and no charges on transactions. The limits are instead that the account is only for those with a maximum account balance of £100,000 for limited companies and £50,000 for sole traders.

With those limits in mind, it's clear that Mettle has been designed to support small businesses who want a fast, free business banking account that comes with its own intuitive app and has an array of features to make doing business easier.

Unlike many of our list, Mettle is not FSCS-protected which may be a factor for you when choosing which free business account is right for you.

• No monthly fees
• No payment fees
• Limited to certain maximum account thresholds

Tide

Tide's business bank account is a straightforward offering - with no monthly fees at its basic 'free' level. At that level, transfers in and out are charged at 20p per transfer. However, if you choose to upgrade your account to the 'plus' level you'll get 20 included each month for £9.99.

Remaining at the free tier still offers great benefits. Tide is offered by ClearBank and is, therefore, FSCS protected for added peace of mind. The free tier is designed for freelancers and sole traders, a simple way to open a free business account that facilitates the most basic banking necessities - but you'll need to pay extra if you want anything fancy.

• No monthly fees
• FSCS protected
• Accountancy integrations with apps such as Xero, Sage and Quickbooks

Anna

Anna Bank's free account is so limited that it is hard to recommend for any full-time sole traders or LTD businesses. Capped at a maximum income of £500 per month, Anna Bank's free tier is better for people running side businesses in addition to their full-time job.

At that free tier, you'll get a business account, card and two free UK transfers per month. Crucially, the free tier also includes an invoice creation and tracking tool, which makes it easier for you to get paid.

However, at such a low-income limit, this account isn't truly 'free' - most businesses will exceed the limit and have to pay for further access. Tiers include £4.90 per month for up to £2000 income, £9.90 for between £2,000-20,000 and £19.90 for £20,000-100,000.

• Free banking for low-income business (no fees and 2 free transfers)
• Free invoicing tools
• Tax reminders and VAT estimation

CashPlus Bank

CashPlus Bank offers an appealing business bank account to UK businesses. While it is not 'free' due to its annual £69 fee, this account has a range of benefits that other providers charge a lot more for. For example, CashPlus offers free UK purchases and three free e-payments/transfers each month.

Unfortunately, the bank also charges £2 per ATM withdrawal and charges £0.99 on each e-payment/transfer after the three included each month. Considering you're paying an annual fee, having to pay further fees when other banks offer similar benefits without the cost may be hard to justify.

• Annual £69 fee to unlock three free e-payments each month
• Fast application, instant decision online
• Tax reminders and VAT estimation

Business Bank Account FAQs

Do you need a business bank account?

Sole traders do not legally 'need' a business account. Instead, you can use your personal current account for business finances. However, doing so means you will struggle to keep track of your business/personal finances. Business accounts also integrate with accountancy platforms and offer tools such as invoice generation - all of which are essential for growing your business.

With free business bank accounts, you can enjoy a banking experience designed specifically for your requirements. This means you'll be able to keep your business money in one place, track expenses, manage spending and stay on top of clients and payments.

How to open a free business bank account

Traditional bank accounts require an in-person appointment at the bank itself. This can be a time-consuming activity and, due to COVID-19, will often be cancelled or reserved solely for existing customers.

Every bank is different, but generally, digitally-based free business bank accounts are slightly easier to close than traditional ones. Most can be closed online, but you'll need to destroy any cards and return them to the bank. But realistically, every bank is different so closure is unique to which you've chosen.

How to switch a business bank account

Most free business bank accounts are aimed at new businesses - so switching from an existing business account may be tricky. However, it always pays to look into what is available, and to contact a bank if you like the sound of their services. Switching starts by contacting the bank you're interested in and asking if they offer switching.

Conclusion: Which Is the Best Free Business Bank Account?

Free business bank accounts are hit and miss for most businesses. Those which don't charge monthly fees OR payment charges are the 'cheapest' - but some of the other options have great features such as card-readers, invoice tools etc.

Like all business decisions, it comes down to what is best for you. If you'd rather upgrade to access higher tiers of services, read our best business bank accounts article to see a detailed comparison of the banks that offer monthly-fee.