Which bank has the best business bank account?

A survey of 16,800 small business banking customers carried out between January and December 2019 ranks 14 banks. Which bank has the best business bank account?

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Consumer insight consultancy BVA BDRC conducts a regular independent survey for the Competition and Markets Authority (CMA). In this survey, people with a business bank account are asked how likely they are to recommend their provider.

We’ve used the latest survey to list the best business banks. At the bottom of the article, we also compare business accounts that the top providers offer.

Which is the best bank for a business account?

Respondents are asked about their provider’s:

• overall service quality
• online and mobile banking services
• small business overdraft and loan services
• relationship and account management
• service in branches and business centres

BVA BDRC say the results show “the proportion of customers of each provider who said they were ‘extremely likely’ or ‘very likely’ to recommend each service” to other SMEs.

The best business bank based on overall service quality

Nine other banks round out the rest of the ranking:

• Lloyds Bank (56 per cent)
• HSBC UK (51 per cent)
• Clydesdale Bank (51 per cent)
• Natwest (51 per cent)
• Bank of Scotland (49 per cent)
• The Co-operative Bank (48 per cent)
• Allied Irish Bank (45 per cent)
• TSB (44 per cent)
• Royal Bank of Scotland (41 per cent)

The best business bank based on online and mobile banking services

Here’s where the other banks placed:

• HSBC UK (62 per cent)
• Handelsbanken (62 per cent)
• Royal Bank of Scotland (62 per cent)
• Yorkshire Bank (60 per cent)
• Bank of Scotland (58 per cent)
• Clydesdale Bank (54 per cent)
• Allied Irish Bank (43 per cent)
• TSB (43 per cent)
• The Co-operative Bank (41 per cent)

The best business bank based on overdraft and loan services

Only seven other banks round out the rankings here, because fewer than 100 of Metro Bank’s and The Co-operative Bank’s customers provided an eligible score for overdraft and loan services:

• Barclays (58 per cent)
• Allied Irish Bank (55 per cent)
• Natwest (55 per cent)
• Bank of Scotland (53 per cent)
• Clydesdale Bank (51 per cent)
• Royal Bank of Scotland (50 per cent)
• TSB (47 per cent)

The best business bank based on relationship and account management

This is how the rest of the banks fared:

• Lloyds Bank (57 per cent)
• Allied Irish Bank (55 per cent)
• Clydesdale Bank (55 per cent)
• Natwest (54 per cent)
• HSBC UK (53 per cent)
• Bank of Scotland (48 per cent)
• The Co-Operative Bank (46 per cent)
• Royal Bank of Scotland (46 per cent)
• TSB (46 per cent)

The best business bank based on service in branches and business centres

Here are how the other nine banks ranked:

• Santander (56 per cent)
• Bank of Scotland (52 per cent)
• Clydesdale Bank (51 per cent)
• HSBC UK (50 per cent)
• Barclays (50 per cent)
• Natwest (47 per cent)
• The Co-operative Bank (43 per cent)
• Royal Bank of Scotland (38 per cent)
• Allied Irish Bank (35 per cent)

Compare business bank accounts from the top providers

Here are more details on the products themselves, letting you compare business bank accounts from the top providers.

Handelsbanken: best bank for business account

Handelsbanken came top in the survey for overall service, as well as for relationship management and overdraft and loan services.

It calls itself a local relationship bank, where each branch works as a local business. Handelsbanken say this helps them better understand their customers, the local market and the community.

The bank offers a direct line to an account manager and team at your local branch, as well as current accounts in a range of currencies, and overdrafts (subject to status).

There aren’t any details about fees on their website, so you’ll need to get in touch with your local branch to find out what fees they might charge your business.

Metro Bank: best business account for online and mobile banking

Metro Bank came second for overall service quality, but top for online and mobile banking.

Its USP is that its branches are open outside of usual working hours, seven days a week.

To open a business bank account with Metro Bank, you need to have an annual turnover or balance sheet of up to £2 million. There’s further eligibility criteria around business owners being UK residents.

When it comes to fees, there’s no monthly charge for daily balances above £5,000. If your daily balance ends at below £5,000 in the month, you'll pay the monthly fee of £5.

You'll also get 50 free UK transactions each month, but if you exceed this limit, a fee kicks in at 30p for each transaction (balances below £5,000 don’t get the free transactions however). There are other charges too, for non-standard transactions.

Santander: business bank account for startups

Santander came third in the survey for overall service quality. It offers free and discounted banking for startups, and two business bank accounts.

The Business Current Account offers:

• 18 months of fee-free banking for startups (the standard monthly fee is £7.50)
• an arranged overdraft with an interest rate at 5.10 per cent EAR (variable) and an annual fee of 1 per cent of the agreed overdraft
• standard day-to-day banking with access online, at Santander ATMs and Post Office branches

The 123 Current Account offers:

• up to £300 cashback each year (the rate of cashback depends on how much money is paid into your account)
• monthly interest of 0.10 per cent on credit balances
• £5 monthly fee for startups for 18 months and switchers for 12 months (with a £12.50 monthly standard fee)

Yorkshire Bank: long fee-free period

If you’re a new business or even just switching to Yorkshire Bank, you’ll get 25 months of fee-free banking.

To be eligible, you need to be a new business opening an account within 12 months of starting up, or a small business with a turnover of less than £2 million switching your main business bank account to Yorkshire Bank.

After the fee-free period you switch to the business tariff – £6.50 a month, with charges for other transactions like Direct Debits and cash paid in.

Yorkshire Bank also offers specialist relationship management and an optional overdraft.

Barclays: accounts for different-sized business

Barclays has specialised products for businesses of different sizes.

• the start-up business account is free for the first 12 months and you get access to Barclays’ Business Direct team, which offers support on growing your business
• the business account for turnover up to £400,000 is for established business – there are two price plans depending on whether you use mixed payments or electronic payments only (with a £6 and £6.50 monthly fee respectively)
• the business account for £400,000-£6.5 million turnover is for larger businesses, which also get their own relationship manager
• the community account is for small not-for-profit organisations

What’s the best business account from other banks?

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. There’s been a rise in the popularity of online-only and mobile-first banks like Monzo in recent years.

Here are three challenger banks you could take a look at for your business:

• Tide is a dedicated mobile-first business current account with three different price plans, depending on your needs – from free to £49.99 a month
• Starling Bank has a free account with options for both limited companies and sole traders
• Coconut is another business-only bank like Tide, which lets you connect all your accounts and card to the app to see everything easily, or take out a current account directly

Whichever bank you choose, it’s important to research all of your options carefully and decide what’s best for you. Please only use this article as a guide, as part of your research.

How do you rate your business bank account? Let us know in the comments below.