Best Banks in the UK for a Business Bank Account 

The easiest feat about starting a business is precisely just that - starting one. All the nitty-gritty comes after that. From managing payroll to handling inventory and beyond, a lot goes into keeping a business afloat. One of the most critical facets of business management is money. Money keeps the wheels turning and the lights on. And when it comes to managing money, you can’t keep the banks out for too long.

Businesses have evolved, but what about banking?

Luckily, business banking has come a long way since the days of waiting in line at the bank or having to fax over documents. With the emergence of neobanking between 2013 and 2015, business banking has been completely revolutionised.

According to Statista, there will be around 28.2 million neobanking users in the UK by 2027. Most of which are expected to be young adults and Gen Z’ers.

So, before opening up a business bank account, let’s look at what exactly neobanking is and how does it differ from the traditional banking experience?

What Is a Neobank?

Neobank translates to ‘new bank.’ And as the name suggests, neobanks are digital-only banking solutions that started to emerge in response to the changing needs of consumers. In an era where we’re used to getting what we want, when we want it—be it a taxi or our groceries—why should banking be any different?

Neobanks don’t have any physical branches. Instead, they exist purely online or through a mobile app. And this means that you can do your banking anytime, anywhere.

Some popular neobanks include

• Starling Bank,
• Revolut,
• Tide,
• and Monzo.

Some Popular Neobank Solutions

Each of the mentioned neobanks offers a unique set of features. But what they all have in common is that they’re convenient, user-friendly, and often more affordable than traditional banking solutions.

Starling Bank

Are you a sole trader or a business with multiple directors looking for a free business banking solution? Then, Starling Bank could be a good fit for you. Founded in 2014, Starling Bank is one of the leading neobanks in the UK.

Pros of Starling Business Bank Account

• No monthly fees
• Can send and receive international payments in over 30 currencies
• Integrates with Xero, FreeAgent, and QuickBooks
• No cost whilst spending internationally

Cons of Starling Business Bank Account

• You can’t take out a business loan with Starling
• There’s a 0.7% charge for cash deposits
• Doesn’t offer an overdraft facility

Revolut

Does your business deal in multi-currency payments? Are you a freelancer who works with clients abroad? If so, Revolut could be the neobank for you. Revolut was founded by Nikolay Storonsky and Vlad Yatsenko in 2015. And it has since amassed over 12 million users.

Pros of Revolut Business Bank Account

• Offers a range of accounts with varying fees from free to £100/month
• Strong 24/7 customer support
• Offers currency cards that can be used fee-free in over 150 countries

Cons of Revolut Business Bank Account

• Doesn’t support overdrafts and loans
• It charges a transfer fee within the UK
• You can’t deposit cash or cheque

Tide

Tide is an excellent option for people looking for various bank accounts, from basic to cashback. Tide was founded in 2015 by George Bevis and is ranked as the 7th largest digital banking solution for UK’s SEMs, with a customer satisfaction rating of 82 per cent.

Pros of Tide Business Bank Account

• A wide range of features like automated bookkeeping, business spending insights, and even branding
• Integrates with popular accounting software like FreeAgent, Xero, and QuickBooks
• There’s no monthly fee
• You can get 0.5% cashback with the Tide Cashback Business Account

Cons of Tide Business Bank Account

• You need to pay 20p to transfer money within the UK
• Charges £1 for every cash withdrawal
• Doesn’t provide overdrafts or loans facility

Monzo

The younger sibling of the neobanking world, Monzo, was founded in 2015 by Tom Blomfield. It offers two business accounts: Monzo Lite and Monzo Pro. From fee-free spending to integrated bookkeeping, Monzo has a lot to offer businesses of all shapes and sizes. However, whilst some features are free, others come at £5 per month.

Pros of Monzo Business Bank Account

• There are no monthly fees involved
• You can spend fee-free abroad
• Easily integrate with accounting tools

Cons of Monzo Business Bank Account

• It doesn’t offer overdrafts or loans
• Monzo Lite offers limited features
• Monzo Pro features like tax posts and invoicing are charged

What is a Traditional Bank?

A traditional bank is a brick-and-mortar institution offering digital and physical banking solutions. In addition, traditional banks offer various options for managing your finances, from in-person teller services to online banking and mobile apps.

When the user deposits money into their account, the bank will lend it to other individuals or businesses who have taken out loans. The bank charges interest on these loans to lend this money out.

There’s no shortage of traditional banks in the UK. Some of the most popular include

• Santander,
• HSBC,
• and Natwest.

Best Traditional Business Bank Accounts

Whilst traditional banks have been around for centuries, they’ve had to adapt to the changing needs of consumers in recent years. As a result, for example, in response to the rise of neobanking, many traditional banks have started to offer digital-only solutions, like online and mobile banking.

Santander

Ageing back to 1988, Santander is a British bank owned by the Spanish Santander Group. Santander offers its users a full range of banking services, from in-person teller service to an online app. The bank has over 150 million active customers and operates in 15 countries.

Pros of Santander Business Bank Account

• If you own the 1|2|3 business account, you’re entitled to £300 cashback annually
• There are no cash deposit charges for amounts up to £1,000
• Six-month discounted monthly maintenance charges for new 1|2|3 business account openers

Cons of Santander Business Bank Account

• Currently, the bank is only supporting the existing customer with their business banking needs
• The 1|2|3 Business account has a £12 monthly maintenance fee
• The features and benefits are limited when compared to its rivals on the market

HSBC

What’s now HSBC was first established in 1865 in Hong Kong. Over 150 years, it has grown to become a leading global bank with over 14.75 million UK-based customers. HSBC offers a wide range of banking services to individuals, small business owners, and large corporations. The Kinetic Business account is HSBC’s digital business bank account with a mobile app and online banking portal.

Pros of HSBC Kinetic Bank Account

• There is no monthly account fee for the first 12 months
• A dedicated Relationship Manager to help with your business banking needs
• Apply for an overdraft of £30,000

Cons of HSBC Kinetic Bank Account

• A £6.50 monthly fee once the 12-month period expires
• Requires an Android or an iPhone 6 or onward to access the online app
• Charges a 2.75% fee for international spending

NatWest

The National Westminster Bank, now called NatWest, was established in 1968. It is among the most popular banks in the United Kingdom, with over 16 million customers. The bank offers digital and physical banking solutions to individuals and small businesses. NatWest’s startup account is a feasible option for new accounts with only 12-month trading history and a turnover of less than £1m.

Pros of NatWest’s Startup Account

• No monthly account management fees
• You can use a mobile app to manage your finances
• Users can have access to a free accounting tool

Cons of NatWest’s Startup Account

• Charges transaction fees after 18 month
• There’s an ATM withdrawal fee after the first 18 months
• There’s a non-sterling transaction fee

How is Neobanking Different from Traditional Banking?

For the longest time, business banking was synonymous with high street banks. Whilst there’s nothing wrong with that, the traditional banking experience often left much to be desired—especially for small businesses.

Let’s explore some of the key ways in which neobanking is different from traditional banking.

Maximum Deposit Amounts

• Traditional banks: There’s usually a limit on how much money you can deposit into your account per day. However, please note that FCA regulations don’t impose limits. Instead, it is a limit that the bank sets on its customers.
• Neobanks: Since neobanks don’t have any physical branches, their costs are often lower than traditional banks. And as a result, they don’t need to place restrictions on how much money their customers can deposit.

Banking Licence

• Traditional banks: Licensed and chartered banks guarantee the safety of your deposits up to a certain amount. In the UK, this amount is £85,000 under the Financial Services Compensation Scheme (FSCS).
• Neobanks: Since neobanks don’t have any physical branches, they are not required to obtain a banking license. So, neobanks might not be licensed.

Target Markets

• Traditional banks: Traditional banks often target both individuals and businesses. However, their business products are usually an afterthought.
• Neobanks: Neobanks, on the other hand, are focused exclusively on SME business banking. And this focus allows them to offer products and services tailored to the needs of small businesses.

Customer Service

• Traditional banks: If you’re comfortable with one-on-one interactions, traditional banks might be a good fit. However, the long lines and waiting times can be frustrating.
• Neobanks: Neobanks offer customer service through various channels, including live chat, email, and social media. So, you can get the help you need when it’s convenient for you.

Utilise Debite for Optimising Your Business Banking Experience

Businesses have a lot of options when it comes to choosing a bank. And whilst some great traditional banks are out there, neobanks are quickly becoming popular. 

However, if you, as a growing business, want to optimise your financial management, it might be time to reap Debite’s benefits.

Debite supports the growth of early-stage companies by offering fast and affordable funding via Debite’s Business Credit Card, which brings a ray of sunshine to the dark world of business expenses. 

Businesses can reduce costs with no subscription, FX, or card fees. Plus, the cashback feature allows companies to get up to 4% cash back on all their spending.

You don’t have to wait days to get your Debite Business Credit Card; just apply online, and we will send your card within a day. 

And if you need to pay for your transactions in instalments—we’ve got you covered there, too. So, apply now and be a part of Debite’s network.

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