Resource Updated November 2024
Whether you’re just starting out on a new business venture or you’re looking to make changes to your existing business banking, choosing the right business bank account is crucial in managing your small business’ finances effectively.
Finding the right business bank account can be time-consuming and overwhelming. That’s why we have put together this handy guide to help you make up your mind when it comes to choosing a business current account.
Consider your needs when choosing a business bank account
Understanding your business needs, and how a business bank account can cater to them, can help you choose the right bank account.
When it comes to business banking, different banks will often provide different services – and businesses can have different requirements depending on their current size, goals and long-term plans.
For example, start-ups are often looking to keep costs to a minimum, so free banking services for the first few months or years can be a very helpful feature. More established businesses might be looking for a trustworthy bank with a good ethical stance, to maintain their reputation.
In deciding which business bank account is suitable for your business, you should be aware that external factors i.e. supplier costs are ever-changing and therefore it is important that the business’ finances are forecasted and well planned.
Cash flow is important to every business and a good way of maintaining it is by having a bank account that you can rely on, and that meets your business banking needs. This in turn can help you to manage your finances better and help your business to excel.
Feel more prepared to make a choice
There are many things to consider but here are some important business banking features you should look out for in your search for the right business current account.
Online and mobile banking
Think about the ways you prefer to bank. If you like to manage your finances on the go, make sure you can access online or mobile banking with your business bank account.
Having 24-hour access to a bank account is important when you need easy access to funds to help with the everyday running of your business. Online and mobile banking can also offer many other benefits, like secure transactions, automated payments and minimised overheads.
Customer support
If you prefer to speak in person, look out for bank providers with local branches and helpful customer phone lines. This can make a real difference to your banking experience and help put your mind at ease if you ever need support.
Consider the help available for the business banking accounts you’re interested in and check that the customer service and support is efficient and easily accessible.
Monthly fees
Compare costs like monthly account charges, cash deposit fees and withdrawal fees when researching your account. With all the costs involved in running your own business, many business owners are looking for free business banking and low or no charges, wherever possible.
On average, UK banks offer free banking services to businesses for a period of 12 to 24 months. After this free period, monthly fees can range from £5 to £25, and sometimes higher. Not all bank providers offer a free period, so look out for that, too.
Free everyday banking
Look out for introductory offers from banks such as free everyday business banking for new business customers. This can make your journey as a business owner less stressful, especially if the introductory period is over a year – some even go beyond two years.
However, business current accounts can require a minimum balance and place limits on certain transactions to get full free banking. Also, remember to check what a bank means by free everyday banking to avoid unexpected charges.
Transaction limits
Many banks place limits on the cash deposits and transactions you can make in a given period. When choosing a business bank account, keep in mind the volume and sizes of cash deposits and transactions that your business is likely to make.
Whether you’re a start-up or an established small business, you might want to consider an account that allows more transactions. You may feel more able to focus on the day-to-day when you’re less restricted by transaction limits.
Card payments
It’s more important than ever for businesses to accept card payments, in a world heading towards being cash-free. Not all business bank accounts accept card payments, so check if the account offers card payment services that you’ll be able to access.
Business savings accounts
Look out for bank accounts that offer business savings accounts if you’re looking for somewhere to put spare pots of money. Your hard-earned cash can earn interest whilst you take care of growing your business.
There are different types of savings account. Some savings accounts are instant access, so you can earn interest but still get to your money whenever you need it. Others might give you a higher interest rate, but you have to give notice to the bank if you want to make a withdrawal.
Ethical stance
Most banks with an ethical stance will be transparent about what makes them different. If your business prides itself on being ethical or socially responsible, consider choosing an ethical business banking account that shares similar values.
Forming a good relationship with your bank
Ultimately, having a good relationship with your bank is going to be one of the most important aspects of your business banking. Aside from the typical services and features a bank can offer, many businesses look for a bank that they can turn to when they need help and support to expand and succeed.
A bank shouldn’t just be a place to keep your money, they should be with you throughout your business journey, offering expert guidance and support whenever you need it. Should you ever face financial difficulty whilst running your business, it’s important to know that your bank can offer the support you need to give you that peace of mind.
Manage your money your way for less
With FSB Business Banking, you can choose a bank account that works for your small business, and get discounts and deals negotiated just for FSB members.
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Manage your money your way for less
With FSB Business Banking, you can choose a bank account that works for your small business, and get discounts and deals negotiated just for FSB members.
Find out more