7 of the best UK business bank accounts for startups 2017, compared

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 2017 business bank accounts.

We’ve only compared startup business accounts offered by some of the major banks offering over 12 months’ fee-free banking to successful applicants (although this year we’ve also included a section on ‘challenger’ 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 banks we’ve listed below all offer over 12 months of fee-free banking. Most of these accounts are designed for small to medium-sized businesses that are just getting started, so your turnover (or projected turnover) often 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.

We’ve focused mainly on bank accounts for startups in this article, but most of these include an option for switchers, and most banks will also offer a specific account for established businesses. Let us know in the comments if you’d like an article that focuses on bank accounts for businesses that have been trading for over a year or two, and check out the current account switch service if you’re looking to change banks but want a bit of help.

Remember to check the small print

Bear in mind that anything considered a ‘non-standard transaction’ like a Clearing House Automated Payment system (CHAPS) payment, a foreign transaction or use of an overdraft facility will usually 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 pay.

The other thing to watch out for is the tariff you’ll be paying once your fee period is over. Some banks will switch you automatically onto their standard tariff while others will offer you a choice. You may choose to shop around though, once your fee-free period is over, for a good switching deal. Many of the banks below offer the same sort of fee-free period to switchers, just take a look at their specific websites or visit in-branch and see what’s right for you.

A comparison of business bank accounts

Here they are, in no particular order.

RBS startup package

Who it’s for

Businesses that have been trading less than a year, with a projected (or existing) annual turnover under £1 million.

The best bits of the RBS account

It’s fee-free for 24 months, and there’s also no annual fee on their Business Credit Card for the first 12 months. You can also apply to arrange a fee-free £500 overdraft, subject to approval.

The small print

Unarranged borrowing, other additional services and “Bankline Charges”aren’t part of the offer. And remember, at the end of the two year no-fee period, you’ll automatically go onto their standard tariff. For the credit card, you’ll need to apply with six months of opening your business current account. The overdraft carries specific charges, too.

Santander Start-up Business Current Account

Who it’s for

Small to medium-sized businesses with up to two directors, owners (shareholders) or partners.

The best bits of the Santander account

There’s a 12-18 month fee-free period and you can also earn 0.10% gross/AER (variable) on any credit balances. It’s worth noting that Santander have been awarded Best Business Current Account Provider for the last 15 years by Moneyfacts, along with a couple of other business banking awards.

The small print

The 18 months fee-free period is only open to existing 123 World or Santander Select customers. For everyone else who qualifies, it’s 12 months. After your time’s up on the fee-free period, you’ll be moved onto their monthly £7.50 tariff.

TSB Start Up Account

Who it’s for

To start the application process you’ll need to confirm you’re a sole trader, partner or director, and that you’re using the account for business. There aren’t currently any advertised restrictions on annual turnover, or years trading, but it’s worth checking if you apply.

The best bits of the TSB account

TSB offer an 18 month fee-free period, and gives you some options about which tariff you then move on to.

The small print

As with most other accounts, there’s a fee-free period 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.

HSBC Business Bank Account

Who it’s for

Startups with an annual turnover of up to £2 million.

The best bits of the HSBC account

HSBC offer an 18 month fee-free period, and will give you 12 months at a fixed price after your free banking period ends (currently, this is £5.50 a month). They also have a ‘Best Tariff Promise’, which ensures you’ll be moved onto a standard tariff that suits your business, when the time comes.

The small print

The Best Tariff Promise is based on HSBC’s annual review of your account activity. And despite the fixed price period, you’ll still pay charges on certain services and transactions.

Yorkshire Bank Business Current Account

Who it’s for

Startup businesses opening their first account within 12 months of trading.

The best bits of the Yorkshire Bank account

You can get 25 months of fee-free banking with Yorkshire Bank. This is also open to established businesses, looking to switch.

The small print

As with most other accounts, there are additional services and borrowing charges which are not part of the free banking offer. At the end of the fee-free period, you’ll move onto Yorkshire Bank’s standard business banking tariff, which is currently £5.00 a month.

Lloyds New Business Current Account

Who’s it for?

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

The best bits of the Lloyds account

Lloyds offer a simple 18 month fee-free period, after which you’ll be moved on to their standard pricing plan.

The small print

The standard monthly fee you’ll be paying once your free banking period ends is currently set at £6.50 with Lloyds.

To qualify for free business banking you need to operate your account in credit, or within your agreed overdraft limit. Other banks may stipulate this, but Lloyds do flag it upfront.  

NatWest Startup Business Bank Account

Who’s it for?

Businesses that have been trading for less than a year and have an annual turnover under £1 million.

The best bits of the NatWest account

NatWest offer an 18 month fee-free period, along with no annual fees on their Business Credit Card for the first 12 months. You can also apply for an arranged fee-free £500 overdraft facility.

The small print

As with its parent company RBS (see above), NatWest stipulates that unarranged borrowing, other additional services and “Bankline Charges” aren’t part of the offer.

At the end of the two year no-fee period, you’ll automatically go onto their standard tariff. For the credit card, you’ll need to apply within six months of opening your business current account. The overdraft carries specific charges, too.

Which is the best challenger bank for small businesses?

Keen to try a new way of banking? ‘Challenger banks’ are becoming more and more mainstream, and often make entrepreneurship and small business management part of their core offering.

A challenger bank is usually a smaller retail bank, set up with the aim of competing with large, long-established national banks like the ones mentioned above. We did an in-depth study of the UK’s small business challenger banks, but as you’d expect, the list is constantly changing.

Alongside Tide’s mobile app and Metro Bank’s fast-growing high street presence, you could also check out Starling Bank (soon to be opening to business current account customers, and an interesting story in the meantime), and any others that catch your eye during research.

So, who offers the best deal for small business banking in the UK?

We’re non-advisory so this is just a list, but here’s an at-a-glance summary of the fee-free periods for our seven startup bank accounts. Remember, it’s in no particular order!

7 fee-free business banking offers for 2017

Bank Fee-free period
RBS 24 months
Santander 12-18 months
TSB 18 months
HSBC 18 months
Yorkshire Bank 25 months
Lloyds 18 months
NatWest 18 months

Have you found a business bank account you’re really pleased with? Tell us in the comments.

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