6 of the best UK business bank accounts for startups in 2016

By Jessie Day, Simply Business


If you’re trying to compare business bank accounts to figure out which one offers the best package for your startup, check out our guide to 2016 business bank accounts.

We’ve only compared business accounts offered by some of the major banks. Remember that other providers are available and you should do your own research before choosing an account.

Fee-free business accounts

Business accounts tend to come with annual fees, but the six banks we’ve listed below all offer fee-free periods when you first sign up. Most of these accounts are designed for small to medium sized businesses that are just getting started, so your turnover (or projected turnover) needs to be under a certain amount.

The bank accounts we’re comparing tend to come with the perks you’d expect, so we haven’t listed them all for each account. For example, most of them offer an online banking portal, some sort of in-branch support, a debit card, and you’ll be able to use the account for deposits and withdrawals, cheques, standing orders and direct debits.

Remember to check the small print

Bear in mind, though, that anything considered a ‘non-standard transaction’ like a CHAPS payment, a foreign transaction or use of an overdraft facility will still be subject to charges, even during the fee-free period. Check the terms and conditions carefully to see which services incur a charge and how much you’ll be charged.

The other thing to watch out for is the tariff you’ll be paying once your fee-free period is over. Some of the banks will switch you automatically onto their standard tariff while others will offer you a choice of tariffs.

A comparison of business bank accounts

1. RBS business account for startups

Who it’s for

Start-ups who have been trading for less than a year, with an annual projected turnover of less than £1 million.

The best bits of the RBS account

The account is free for two years, and account holders can also get the RBS business credit card without paying the annual fee. You can also apply for an overdraft facility of £500 without paying the set-up fee (although you will still pay if you use the overdraft).

The small print

Although there’s no service charge for the account, remember that you’ll still be charged for any unarranged borrowing and additional services. At the end of the two years, you’ll automatically be switched onto the bank’s standard tariff.

2. Santander startup business current account

Who it’s for

Small businesses in the first year of trading with up to two directors, owners or partners. For access to the fee-free period, this needs to be your first business current account with Santander.

The best bits of the Santander account

The Santander account offers free business banking for 12 or 18 months. Until the end of October you can earn 0.25 per cent interest on your balance, going down to 0.1 per cent after this date. Santander has been awarded Best Business Current Account Provider by Moneyfacts for the last 14 years.

The small print

Day-to-day banking is free but you’ll be charged for ‘non-standard transactions’ like CHAPS payments and foreign currency transactions. Once the fee-free period is over, you’ll go onto the standard £7.50 per month tariff.

3. TSB business account for startups

Who it’s for

To open an account you need to confirm you’re a sole trader, partner or director using the account for business.

The good bits

An 18 month fee-free period, after which time you can choose which tariff to move to.

The small print

As with the other accounts, the account itself is free but you’ll be charged for certain services. Once the initial 18 months is up, you’ll have to move to an account with a tariff.

4. HSBC business bank account

Who it’s for

Start-ups with a projected turnover of up to £500k.

The best bits of the HSBC account

You get your business bank account without a fee for 18 months, and you then get 12 months at a fixed price, with a choice of two tariffs. There’s also some offline and online support available for your business.

The small print

You’ll be liable to pay fees for any ‘non standard’ transactions, and when your free period is over you’ll pay an account maintenance fee of £5.50 a month. Charges for other services will depend on which tariff you’ve chosen.

5. Yorkshire Bank business current account

Who it’s for

Startups opening their first account or established business looking to switch banks. You must have a turnover or projected turnover of less than £2 million.

The best bits of the Yorkshire Bank account

The account is free for over just two years – 25 months, to be precise! You can also apply for an agreed overdraft.

The small print

The ‘free banking’ service doesn’t include additional services and borrowing charges. There’s a cash limit of money paid in, out or exchanged of £250,000 per annum. Once your free banking period has ended, you’ll move to the business banking tariff.

6. Lloyds new business current account

Who it’s for

New businesses with a projected turnover of up to £1 million.

The best bits of the Yorkshire Bank account

You get 18 months of free day-to-day banking, including all the bits and bobs you’d expect from an account, including mobile business banking, support from a business account team, and online guides and tools for running your business.

The small print

When your free period has finished, you’re moved onto a tariff of £6.50 per month plus fees for other services. During your fee-free period you’ll be liable for fees for anything non-standard.

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