Business bank account comparison (June 2026)

Choosing a business bank account shouldn’t mean settling for whatever you’re offered. The UK market has shifted significantly over the past five years, with traditional high street banks now competing alongside fast-growing digital providers. Some accounts are free while others carry a monthly fee, and the differences go well beyond price. This page compares the main options honestly, explains what actually matters when you’re choosing and helps you find the account that fits your business type and stage.

How to compare business bank accounts: what actually matters

The temptation is to focus on the monthly fee, and that could be a mistake for your business. Price is one factor of many, and the cheapest headline option is often not the cheapest once you account for a real month’s worth of activity. Compare based on how you actually use an account, not what looks cheapest on a provider’s homepage. Here are a few things to consider:

Monthly cost: This covers the account fee and the transaction charges. One account might cost £0 a month but charge per payment over a threshold. Another costs more but includes unlimited payments. Work the cost against your actual average usage, not a quiet month.

Transaction allowances: How many payments do you make in a normal month, and how many come in? If you receive hundreds of customer payments, an account capped at a low free transaction limit can quickly become expensive.

Cash deposits: Not every account offers free cash deposit access. Some charge per deposit, some per item, some require specific locations. If your business handles physical money, this may add up over time.

FSCS protection: The Financial Services Compensation Scheme protects eligible deposits up to £120,000 per legal entity per authorised bank. The limit rose from £85,000 on 1 December 2025. Some digital providers use FCA safeguarding rather than FSCS. We explain the difference below.

Overdraft availability: Some accounts offer arranged overdrafts. Many free digital accounts don’t. If you need a cash flow buffer, check before you commit.

Accounting integration: Can the account connect directly with Xero, FreeAgent, QuickBooks or Sage? Automatic transaction imports can save hours every month.

Customer support: Some providers offer only in-app messaging. Others have phone lines and branches. If something goes wrong at 4 pm on a Friday, which support type matters most to you?

Business bank account comparison table

The table below compares UK business bank accounts on the factors that matter most: monthly fee, transaction allowance, overdraft, FSCS or safeguarding status.

Best business bank account for sole traders

Sole traders need simplicity, low fees and fast setup. Running a business on your own means you don’t need multi-user access, payroll integration or complex lending products — you need an account that works without getting in the way.

Digital providers typically offer accounts to sole traders with no monthly fee and no minimum turnover, with most approvals completed within 24 to 48 hours. Many integrate directly with popular accounting software, keeping your records clean without extra admin.

Sole traders often ask whether they actually need a business account. Legally, no rule says you must hold one. In practice, most personal account terms don’t allow business use, so running takings through a personal account usually breaches your bank’s terms and can result in the account being closed. A dedicated business account also keeps your records clean at Self Assessment time. Making Tax Digital for Income Tax (MTD for ITSA) launched in April 2026, and having clean bank records from day one will make compliance considerably less painful.

→ Sole trader bank accounts

Best business bank account for limited companies

Limited companies have more complex banking needs. You might have employees, multiple directors or international clients, and you’ll likely want multi-user access, payroll integration and, in some cases, an overdraft facility.

High street banks are built around business growth. They offer relationship managers, arranged overdrafts and lending products such as invoice financing and asset finance. The trade-off is higher monthly fees after any introductory period, plus a slower onboarding process, typically one to two weeks.

Digital providers have also become a strong option for limited companies. Some have moved onto full UK banking licences in recent years, meaning eligible deposits now carry FSCS protection. Others still operate under e-money licences and use FCA safeguarding instead. Both models offer multi-user access, multi-currency holding and accounting integrations, but neither currently offers traditional lending products. If you expect to need an overdraft or loan, a high street bank is usually still the better fit for that.

If you plan to seek business lending in the next two years, starting a relationship with a traditional provider early can help when you apply.

Best free business bank account

Free accounts exist, and they come with transaction costs that are worth understanding before you commit.

Many digital providers and some high street banks offer accounts with no monthly fee. Transaction allowances are generous for most small businesses, but free accounts often don’t include overdrafts, and some charge for cash deposits or international payments.

The real question is whether a free account is actually cheaper than paying a monthly fee for more features. If a paid account includes unlimited transactions and free cash deposits, and you’d regularly hit the limits on a free plan, the paid option can work out cheaper overall. Run the numbers against a normal month, not a quiet one.

Free accounts tend to suit sole traders and early-stage businesses with straightforward finances and lower transaction volumes.

→ Read our full guide to free business bank accounts

Best business bank account for cash-handling businesses

If your business handles physical cash regularly, a standard business account often won’t be sufficient. Hospitality, retail, salons and market traders all need an account built around cash deposit access.

Branch access matters here. Several UK banks maintain walk-in locations where you can deposit cash directly, though branch networks have reduced in recent years. If you’re based in a rural area, check local availability before committing to a provider.

Post Office access is also worth considering. Several UK banks partner with the Post Office for cash deposits and withdrawals, which can be a practical alternative where local branches have closed.

One honest caveat: cash handling costs money. Providers face compliance and security costs and pass those on. If your business is heavily cash-based, budget for a realistic monthly figure in handling fees as part of your cost planning.

The providers: who’s in the comparison table

The accounts in our comparison table span two broad categories.

High street banks offer the reassurance of branch access, established lending products and relationship managers. They tend to suit limited companies that handle cash, plan to borrow or want the security of a long-standing institution behind them. Some are free, some offer introductory free periods for new business customers before moving to a standard monthly fee.

Digital providers have grown rapidly by offering app-based accounts with fast setup, low or no monthly fees and built-in tools for accounting and expense management. They suit sole traders, freelancers and businesses that operate primarily online. Some have now obtained full UK banking licences and carry FSCS protection; others still operate under e-money licences and use FCA safeguarding.

The table includes providers across both categories, with columns for monthly fee, transaction allowances, cash deposit options, overdraft availability, FSCS or safeguarding status and accounting integrations. Use it alongside your own usage patterns rather than sorting on price alone.

FSCS protection and business bank accounts

The FSCS logo in the comparison table tells you something important about what happens to your money if a provider fails.

The Financial Services Compensation Scheme protects eligible deposits held at UK-authorised banks and building societies. If an authorised bank fails, the FSCS compensates eligible depositors up to £120,000 per legal entity per institution. The limit rose from £85,000 on 1 December 2025. Small businesses that meet the micro-enterprise definition, fewer than 10 employees and an annual turnover under £2 million qualify for this protection.

Some digital providers operate under e-money licences rather than banking licences. These providers hold customer money in segregated safeguarding accounts at UK banks, but the providers themselves aren’t FSCS-covered. Money is safeguarded under FCA rules, which were updated in 2025 under Policy Statement PS25/12, with final changes which became effective from 7 May 2026. If the provider fails, an administrator returns your money minus costs, a different mechanism to FSCS.

For most small businesses, both models offer reasonable protection. If you regularly hold large balances, a fully authorised bank with FSCS cover gives you more certainty. You can verify any provider’s status on the FSCS register at fscs.org.uk.

How to switch your business bank account

Switching a business bank account is simpler than most people expect.

The Current Account Switch Service (CASS) is a free, industry-wide scheme that moves your account between participating banks in seven working days. You open your new account, tell your new bank you want to switch and they contact your old bank. All standing orders and direct debits transfer automatically, and any payments sent to your old account details are redirected to your new account for 36 months.

Both accounts run in parallel during the switch, so nothing gets missed. The CASS Guarantee covers any charges or lost interest you incur if something goes wrong because of a CASS error. Not every provider participates in CASS, so check the switcher list before you commit. We include a CASS logo in our comparison table for every provider that offers this service.

One practical tip: tell your main customers or clients you’re switching. Even with payment redirection in place, a heads-up prevents confusion. Give yourself a couple of weeks at the new account, first check it’s working, connect your accounting software and then make the move.

The psychological barrier to switching is usually bigger than the actual process. If your current bank isn’t serving you well, it’s worth making the change.

Business bank account comparison: free vs paid

The comparison table covers both free and paid accounts.

Free accounts suit specific situations: you’re a sole trader with simple finances, you make a modest number of payments each week, you don’t handle cash, and you don’t need an overdraft. In those circumstances, a free account gives you everything you need at zero monthly cost.

Paid accounts make sense when the included features save you money elsewhere. If you make a high volume of payments each month and the free account charges per transaction above a low threshold, a paid account with unlimited transactions can quickly become cheaper. The same logic applies to cash deposits, international payments and accounting integrations.

For each feature column in the comparison table, ask yourself: Do I use this? If yes, does the paid account include it, or would the free account charge extra? Your needs will also change over time. An account that fits a sole trader may not fit once you hire staff and transaction volumes climb. Start where you are and move up as the business grows.

Accounts in this comparison