What UK business owners keep running into
Most problems start before anyone compares fees. A freelance illustrator in Bristol keeps taking client payments into a personal account, then wonders why the mortgage application gets awkward. Banks can and do question personal accounts used for trading, and some close them outright. Separating business money is not admin fussiness, it is the paper trail you will need at tax time.
The second recurring headache is cash. Online accounts are built for card and transfer payments, so a café, market trader or tradesperson taking notes and coins ends up paying to deposit them. Starling charges 0.7% on Post Office cash deposits with a £3 minimum. Monzo charges £1 per cash deposit at PayPoint and Post Office counters. Compare that against a high street branch where paying in cash is usually part of the monthly fee.
Eligibility catches people out too. Many digital providers only accept sole traders and directors of limited companies, which leaves partnerships, LLPs and community interest companies looking at traditional banks instead. And if you want an overdraft, most app-based accounts simply do not offer one, however good the app looks.
Then there is the international question. A business invoicing EU clients in euros, or paying a supplier in dollars, can lose more on conversion markup than on any monthly fee. That is the hidden cost nobody puts in the headline price.
How the main options compare
Prices below are the published monthly charges for the entry-level plans, checked against provider pages and independent UK comparison research.
| Provider | Monthly fee | Best suited to | Watch out for |
|---|
| Starling Business | No monthly fee | Solo traders and small limited companies wanting accounting tools built in | Cash deposits cost 0.7% (min £3); no overdraft on the standard account |
| Tide | £0 (Free), £12.49 (Smart), £27.49 (Pro), £69.99 (Max) | Businesses that want invoicing and company formation in one app | Free plan caps you at 5 transfers and 3 invoices a month, then 20p per transfer |
| Monzo Business | £0 (Lite), £5 (Pro) | Owners who live in the app and want tax pots and auto-exports | £1 per cash deposit; overseas ATM use outside the EEA costs 3% after a £200 allowance every 30 days |
| Mettle (NatWest) | £0, or £4 for Mettle+ | Sole traders wanting FreeAgent accounting at no extra cost | No branch access; limited support for complex company structures |
| Revolut Business | From around £10 to £90 depending on plan | Teams needing multi-currency, virtual cards and spend controls | E-money model, so balance protection works differently from a UK bank deposit |
| Wise Business | No monthly fee on the entry plan; one-off fee for the advanced tier | Exporters and importers focused on exchange rates | Not a full UK current account; no overdraft, no cheque book |
| High street banks (Lloyds, Santander and similar) | Often no fee for the first 12 months, then roughly £8.50 to £9.99 | Cash-heavy businesses, partnerships and anyone needing credit | Onboarding can take weeks, and paperwork is heavier |
FSCS cover matters here. Accounts held with a UK-authorised bank protect eligible deposits up to £85,000, though some providers advertise higher cover on accounts issued through a partner bank. Ask directly which entity holds your money before you rely on any protection figure.
Where the cheap accounts actually sting
The monthly fee is the least interesting number on the page. Usage charges decide the real cost.
Tide's entry plan looks unbeatable until you count transfers. Five outbound and inbound transfers a month, then 20p each. A business paying three suppliers and receiving ten client payments a week will spend more on transfer fees than on a mid-tier subscription. Tide's own paid tiers lift that cap: Smart at £12.49 a month gives 30 transfers, Pro at £27.49 removes the limit, and Max at £69.99 adds unlimited invoicing.
Monzo's £5 Pro plan is straightforward, but paying cash in at £1 a go adds up fast for anyone handling notes. Starling's free UK payments are genuinely useful for a service business that never touches cash, less so for a market stall.
Matching the account to your trade
A Manchester web developer billing overseas clients should weight exchange rates over monthly fees. Wise and Revolut both compete hard on conversion costs, and Starling sends payments to accounts in dozens of countries without charging for the transfer itself. Priya, a Manchester-based developer, moved her dollar invoicing to a Wise Business account after working out that the markup on her old bank was costing more each quarter than a paid plan would.
A Leeds building firm needs the opposite. Cash, cheques, a possible overdraft and the ability to walk into a branch when something goes wrong. A high street account with a fee of around £9 a month after an introductory period is often cheaper than paying 0.7% on several thousand pounds of weekly cash.
A Sheffield sole trader with modest turnover can stay at zero. Mettle or Starling, both with no monthly fee, plus a spreadsheet or the included accounting tools, covers most of what a one-person consultancy needs.
Opening an account without losing a week
Applications with digital providers usually take minutes to a couple of days. Traditional banks can stretch to several weeks if your business is newly formed, so start there first if you need branch services.
- Gather documents before you start: photo ID, proof of address, your business name and address, Companies House details for a limited company, and your Unique Taxpayer Reference if you are a sole trader.
- Decide your priority: lowest monthly cost, best exchange rate, cash handling, or credit access. Pick one, because no account wins on all four.
- Apply in the order that suits your risk. Digital accounts open fast, so you can start trading while a high street application grinds along.
- Set up the plumbing on day one: connect Xero, QuickBooks or FreeAgent, add your accountant with view-only access, create a tax pot, and order a card for anyone who spends on your behalf.
- Test the small stuff in week one. Send a payment, deposit cash if that is your model, and check how long a transfer takes to clear. Fees and delays show up early.
- Keep the personal account personal. Move subscriptions, direct debits and client billing across properly rather than running two sets of books.
One more prompt: Making Tax Digital for Income Tax is being phased in for sole traders and landlords above set income thresholds, and bank feeds are central to how that reporting works. An account that exports cleanly to accounting software saves an accountant's hourly rate several times over.
Cash-heavy businesses should also check local deposit points before committing. Post Office counters are the practical backbone for digital accounts, and a branch two streets away matters more than an app's design awards.
A short checklist before you sign up
Write down your monthly transfer count, your cash volume, your foreign currency exposure and whether you need credit. That single page of numbers rules most providers in or out within ten minutes.
Then read the fee schedule, not the homepage. Look for transfer caps, cash deposit charges, FX markup, ATM limits and the cost of additional cards. Set a calendar reminder to review the account after six months, because a business that starts exporting or hiring rarely fits the plan it chose at launch.
Finally, open a second account with a different provider once turnover grows. Two accounts cost little, protect you from a single frozen card, and give you leverage when you eventually ask for credit. The right online business bank account is the one whose worst fee is a fee your business will never trigger.
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