Why the branch is no longer the default
Walk down most British high streets and you will find fewer bank doors open than you did five years ago. In their place, a phone app does the work. Starling says more than 600,000 business owners bank with it, and Monzo puts its business customer base past 400,000. That shift is not just about convenience. It is about avoiding a two-week wait for an appointment, then a three-week wait for a decision, in the middle of a quarter when you need to pay a supplier.
Four problems come up again and again when owners apply for an online business bank account in the UK.
The first is cash. Plenty of businesses still take notes and coins, from market traders to barbers. Digital accounts usually handle this through Post Office counters, and the charge is a percentage rather than a flat fee. Starling takes 0.7% with a £3 minimum. Tide's no-fee plan charges £2.50 on deposits up to £500, then 0.99% above that.
The second is the licence. Not every provider calling itself a business bank is a bank. Tide's current accounts are supplied by ClearBank, with eligible deposits covered by the Financial Services Compensation Scheme. ANNA operates under e-money rules, where customer money is safeguarded but the £85,000 FSCS ceiling does not apply in the same way. If you tend to sit on VAT and payroll money for weeks, that distinction is worth two minutes of reading before you sign up.
The third is transfer allowances. A no-monthly-fee plan rarely means unlimited payments. Tide's entry tier includes five UK transfers a month, then 20p each. Model your real volume before assuming the cheapest plan is cheapest.
The fourth is eligibility. Starling's business account is built for limited companies and LLPs registered at Companies House, with UK-resident directors. Sole traders use its separate sole trader account. Monzo accepts UK sole traders and limited company directors. Non-resident directors, charities that are not limited companies, and general partnerships will find the field much narrower than the adverts suggest.
What the main options actually cost
Prices below are published rates for standard plans and can change, so confirm them on the provider's own pricing page before applying.
| Provider | Monthly fee on a GBP account | Deposit protection | Paying in cash | Suits |
|---|
| Starling Bank | No monthly fee | FSCS-protected, full UK bank | Post Office, 0.7% (minimum £3) | Limited companies and LLPs that want no monthly fee and 24/7 human support |
| Monzo Business | Lite has no monthly fee; Pro £5 a month | FSCS-protected up to £85,000, full UK bank | £1 at PayPoints and Post Office counters | Sole traders and directors who want tax pots and spending controls |
| Tide | £0 Free; £12.49 Smart; £27.49 Pro; £69.99 Max | Accounts via ClearBank; eligible deposits FSCS-protected | Post Office, £2.50 up to £500, then 0.99% | Owners who want invoicing, quotes and admin tools in one app |
| ANNA Money | No-fee tier plus paid plans | E-money safeguarding, not FSCS | Varies by plan | Startups and freelancers who want tax filing and invoice chasing built in |
| Revolut Business | £10 Basic; £35 Grow; £125 Scale | Safeguarded, not FSCS | Limited | Businesses with heavy multi-currency and international payment needs |
Wise Business sits in a slightly different category. It is a multi-currency payment account rather than a full current account, useful for receiving dollars or euros, less useful if you need Direct Debits and cash deposits under one roof.
Where the monthly fee hides
A free plan is rarely free once you use it. Take card spending abroad as one example. Spend £2,000 a month with Tide's entry plan and the 2.75% foreign exchange fee adds £55. Moving to Smart at £12.49 removes that fee on card spending, so the paid plan can be the cheaper one before you count anything else.
On the income side, watch the small charges. Starling charges nothing on UK payments in or out, gives six ATM withdrawals a day up to £300, and accepts cheques by post or in the app at no cost. Monzo charges £1 to pay cash in through the Post Office network. Tide charges for CHAPS payments beyond the allowance included in your plan. None of these will sink a business, but four of them across a month add up to a subscription you did not budget for.
Cash-heavy businesses need a different shortlist
If cash is more than a small slice of your turnover, check the deposit limits as carefully as the fees. Starling's sole trader account caps cash deposits at £5,000 a day and £100,000 a calendar year. Deposit charges are per transaction, so one £3,000 deposit costs far less than six £500 deposits.
International payments
Revolut Business tiered plans bundle local and international transfer allowances into each level. Starling sends payments to accounts in 34 countries and does not add its own fee for spending abroad, though the exchange rate still applies. If most of your customers pay in sterling from UK accounts, these differences rarely matter; if you invoice in euros, they define your monthly cost.
Getting approved without the back-and-forth
Applications are decided on documents, not on charm. Have ready: your certificate of incorporation and company number, a registered office address, details of people with significant control, and for each director a passport plus proof of address dated within three months. Director identity verification at Companies House now forms part of setting up a company, so complete it before you apply anywhere.
Digital providers often decide within days, sometimes faster for straightforward sole traders. Traditional banks still ask for branch appointments in some cases and can take weeks, particularly for regulated sectors or businesses with complex ownership. Whatever the provider, expect questions about where your money comes from and what volumes you anticipate; answering them plainly is the difference between a same-week decision and a stalled file.
If you already bank elsewhere, the Current Account Switch Service covers business accounts. It moves your balance, standing orders and Direct Debits, closes the old account and redirects payments for a period afterwards. Starling, for one, does not support partial switches, and any overdraft with the old bank has to be repaid separately before you move.
A practical order for choosing
- Write down three numbers: monthly cash deposited, monthly UK transfers out, and monthly card spend in foreign currencies. Almost every pricing decision follows from those.
- Check whether the provider is a bank or an e-money institution, then decide whether the balance you hold justifies FSCS coverage.
- Run the arithmetic on your own volumes rather than the headline plan price. A £12.49 plan that removes a £55 fee wins.
- Test the accounting connection. Xero, QuickBooks and FreeAgent links matter if your bookkeeper works in one of them, and Making Tax Digital tools are worth checking before your first VAT return.
- Keep the old account open for a month after the switch completes, so an unexpected Direct Debit does not bounce.
For free local guidance, the government-backed Growth Hubs in England, Business Wales, Scotland's Business Gateway and Invest NI all advise on banking and finance, and the FSCS website lets you check which brand your money is protected under.
Start with the numbers from step one, then open two applications rather than one. Comparing a real decision letter against another is faster than reading a tenth comparison page, and most online business bank accounts in the UK let you apply without closing anything first.
研究の知恵