Why the branch model stopped fitting small firms
High street networks have thinned out. A joiner in mid-Devon or a consultant in Aberdeenshire can easily be an hour's drive from the nearest counter, and appointment slots for new business customers are limited. Waiting three weeks to invoice your first client is not a workable start.
Cash still matters. Plenty of UK trades, market traders and cafés take notes and coins daily, and a digital-only account with no deposit route forces a workaround. Cheques have not disappeared either, particularly in agriculture, legal work and older supply chains.
Cross-border work has become ordinary. A freelance designer invoicing a German agency, or an importer paying a supplier in dollars, needs currency handling that high street accounts often price badly. Poor exchange rates quietly eat margin on every payment.
Record keeping expectations have tightened too. VAT-registered firms work within Making Tax Digital, and accountants increasingly want bank feeds into Xero or QuickBooks rather than PDF statements emailed in January.
Credit is the last gap. App-based accounts are excellent for day-to-day operations but usually offer thinner overdrafts and lending in the first year, which matters if you carry stock or pay subcontractors before clients pay you.
How the main options compare
| Provider | Monthly fee | Suited to | Standout feature | Watch for |
|---|
| Monzo Business | £0 on Lite, £5 on Pro | Sole traders and small limited companies wanting clean app controls | Tax Pots for setting aside VAT and corporation tax, 24/7 support, spending abroad without card fees | Cash deposits cost £1 per transaction at Post Office and PayPoint |
| Starling Business | £0 for the GBP account | Businesses wanting a full UK current account with no fee | No charge for standard UK payments or ATM withdrawals; euro account at £2 a month | Post Office deposits cost 0.7% of the amount or £3, whichever is higher; CHAPS is £20 |
| Tide | £0 entry, £12.49, £24.99 and £69.99 plus VAT on paid tiers | New businesses that want to start today and add tools later | Fast sign-up, invoicing and expense cards built in | Foreign currency card spending is charged at 2.75% on the entry tier; cash deposits attract a percentage charge |
| ANNA Money | £0 pay-as-you-go, £22.90 and £59.90 on higher plans | Very small firms that want admin handled alongside banking | Invoicing and receipt capture in one app | 60 transfers included, then 20p each; ATM use beyond three withdrawals per month carries a commission |
| Revolut Business | £10 Basic, £35 Grow, £125 Scale (cheaper on annual billing) | Businesses with multi-currency income | Several currency balances and team cards under one login | Allowances differ sharply by plan, and some payment tools are add-ons |
| NatWest Start-up and Mettle | £0 | Firms in their first year, or those wanting a bank behind the app | Everyday transactions without charges for the first two years on the start-up account | After that period, automated payments are charged individually; eligibility depends on turnover and trading history |
Airwallex sits in a similar space for import and export heavy firms, with plans running from £0 to a few hundred pounds a month depending on volume.
Some of these names are banks and some are not. Monzo and Starling hold banking licences, and eligible deposits are covered up to £85,000 under the Financial Services Compensation Scheme. Tide describes itself as a business financial platform, with customer money held at a partner bank, so the protection route is different and worth reading before you commit. Revolut's UK entity holds a banking licence, but the terms attached to your specific account decide what applies.
Where the differences show up in daily use
Cash handling separates the field quickly. A shop taking £800 in notes each week will pay far more at a provider charging a percentage of each deposit than at one charging a flat pound. Run your own numbers before the pricing table convinces you.
Foreign payments need the same scrutiny. A 0.4% conversion fee and a percentage-based card charge look small until you are moving five figures. Firms that invoice in euros or dollars often keep a separate currency account rather than converting each payment back to sterling.
Bookkeeping integration is not a nice extra. If your accountant works in Xero, an account that exports cleanly each month saves several hours and possibly a fee. Several providers bundle a subscription period with accounting software when you open an account, which is worth checking rather than assuming.
Support quality varies in ways that only show up when something goes wrong. Branch-based banks give you a named contact, while app banks lean on chat. Both can work; the question is whether you are the sort of owner who wants a person on the phone at 8am on a Monday.
Three situations that repeat across the UK
A Manchester seller importing from Asia and selling on marketplaces needs two things above all: a sterling account that accepts card payouts, and a dollar or euro balance so supplier payments are not converted twice. A multi-currency platform account handles that better than a standard business current account, and the seller keeps a UK bank account alongside it for payroll.
A Bristol consultant with three overseas clients wants simple invoicing, tax pots and no monthly fee in the first year. The Lite tier at Monzo or the standard Starling account covers it, and the tax pot removes the January sting.
A joiner in Devon banking cheques and cash every Friday needs a branch or Post Office route and a card that works on site. Starling's Post Office arrangement or a NatWest start-up account with a local branch both workable. The percentage-based deposit charge is the detail that decides it over 12 months.
None of these people needed a single product. Most small firms end up with one main account and one specialist tool.
Opening, switching and avoiding the snags
- Have your documents ready: photo ID, proof of address, your Companies House number if you are incorporated, and a clear description of what the business does and expected turnover. Mismatched details between your Companies House record and the application is the most common reason for delay.
- Open the new account before closing the old one. Overlapping for a month costs little and prevents a gap in payments.
- Move direct debits and standing orders through the Current Account Switch Service where the provider supports it. Straightforward current account switches typically complete within about seven working days, and the old account is closed for you.
- Test the cash route in week one. Deposit a small amount at a Post Office or PayPoint and check what actually lands.
- Set up the accounting connection early, and label your first month's transactions properly. Retrofitting categories later is tedious.
Useful local starting points: the government's Business Support Helpline for general queries, the British Business Bank's finance pages for lending options, your local chamber of commerce for supplier and landlord references, and Post Office branch locators if cash deposits matter to you.
Banks change terms on notice, and monthly fees move. Check the provider's own pricing page on the day you apply rather than relying on any comparison, including this one.
Pick the account that matches how money actually moves through your business this month. Then give it ninety days, watch what annoys you, and adjust before the next tax deadline.
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