Telephone iconCall UsTelephone icon0333 0146 683
Our opening hours
Chevron left icon
Knowledge centre

Which bank has the best business bank account?

6-minute read

Which bank has the best business bank account?
Simply Business Editorial Team

Simply Business Editorial Team

21 June 2021

Facebook iconTwitter iconLinkedIn icon

A survey of 16,800 small business banking customers carried out between January and December 2020 ranks 14 banks. Which bank has the best business bank account?

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. Later in the article, 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

Get your free guide to the best business bank accounts

Get a PDF version of our guide, with easy-to-reference tables that rank different business banks by the quality of various services.

Your email address will be used by Simply Business to keep you posted with the latest news, offers and tips. You can unsubscribe from these emails at any time. Simply Business Privacy policy.

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

BankPercentage of customers who would recommend
Handelsbanken76 per cent
Metro Bank66 per cent
Santander63 per cent
Barclays60 per cent
Natwest59 per cent

Nine other banks round out the rest of the ranking:

  • Lloyds Bank (57 per cent)
  • Yorkshire Bank (55 per cent)
  • Bank of Scotland (53 per cent)
  • Clydesdale Bank (53 per cent)
  • HSBC UK (52 per cent)
  • TSB (48 per cent)
  • The Co-operative Bank (48 per cent)
  • Royal Bank of Scotland (47 per cent)
  • Allied Irish Bank (46 per cent)

The best business bank based on online and mobile banking services

BankPercentage of customers who would recommend
Barclays75 per cent
NatWest73 per cent
Metro Bank72 per cent
Lloyds Bank70 per cent
Santander70 per cent

Here’s where the other banks placed:

  • Bank of Scotland (68 per cent)
  • Royal Bank of Scotland (65 per cent)
  • HSBC UK (63 per cent)
  • Yorkshire Bank (62 per cent)
  • Clydesdale Bank (59 per cent)
  • Handelsbanken (59 per cent)
  • TSB (52 per cent)
  • Allied Irish Bank (44 per cent)
  • The Co-operative Bank (37 per cent)

The best business bank based on overdraft and loan services

BankPercentage of customers who would recommend
Handelsbanken73 per cent
Metro Bank66 per cent
Yorkshire Bank65 per cent
Santander63 per cent
NatWest62 per cent

Here are the results for the remaining nine banks:

  • Clydesdale Bank (60 per cent)
  • HSBC UK (59 per cent)
  • Bank of Scotland (59 per cent)
  • Barclays (57 per cent)
  • Lloyds Bank (57 per cent)
  • The Co-operative Bank (57 per cent)
  • TSB (53 per cent)
  • Allied Irish Bank (52 per cent)
  • Royal Bank of Scotland (51 per cent)

The best business bank based on relationship and account management

BankPercentage of customers who would recommend
Handelsbanken86 per cent
Santander64 per cent
Metro Bank63 per cent
Natwest60 per cent
Barclays58 per cent

This is how the rest of the banks fared:

  • Bank of Scotland (57 per cent)
  • Clydesdale Bank (56 per cent)
  • Allied Irish Bank (56 per cent)
  • Yorkshire Bank (55 per cent)
  • Lloyds Bank (55 per cent)
  • TSB (53 per cent)
  • HSBC UK (50 per cent)
  • The Co-operative Bank (50 per cent)
  • Royal Bank of Scotland (48 per cent)

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

BankPercentage of customers who would recommend
Metro Bank72 per cent
Handelsbanken69 per cent
Bank of Scotland58 per cent
TSB58 per cent
Lloyds Bank58 per cent
Clydesdale Bank58 per cent

Here's how the other eight banks ranked:

  • Santander (55 per cent)
  • Yorkshire Bank (54 per cent)
  • Barclays (54 per cent)
  • NatWest (53 per cent)
  • HSBC UK (53 per cent)
  • The Co-operative Bank (48 per cent)
  • Royal Bank of Scotland (41 per cent)
  • Allied Irish Bank (39 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 branch and business centre service

Metro Bank came second for overall service quality, but top for service in branches and business centres.

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. From September 2021, the monthly fee will rise to £6 for balances under £6,000.

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). From September 2021, the number of free transactions is being reduced to 30 for accounts with a balance of £6,000 or more. This means accounts with a balance of less than £6,000 won’t get any free transactions.

Santander: business bank account for startups

Santander business banking came third in the survey for overall service quality and second for relationship management. 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, which recently rebranded to Virgin Money, 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 £6.5 million switching your main business bank account to Yorkshire Bank.

After the fee-free period you switch to the business tariff – it’s £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, which topped the rankings for online and mobile banking services, 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

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 has 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 a business-only bank, which lets you connect all your accounts and card to the app to see everything easily, or take out a current account directly

There’s also been a rise in the number of sustainable banks, such as Triodos, which only finances projects and organisations that have a positive impact on society, culture, and the environment.

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.

Want to find out more about small business finance? Read our guides on the best accounting software and the best invoice apps.

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

Ready to set up your cover?

As one of the UK's biggest business insurance providers, we specialise in public liability insurance and protect more trades than anybody else. Why not take a look now and build a quick, tailored quote?

Start your quote

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.

Facebook icon
Share
Twitter icon
Tweet
LinkedIn icon
Post

People also liked

Landlords could be targeted in new Capital Gains Tax raid.

19 November 20202-minute read

Landlords could be targeted in new Capital Gains Tax raid

Landlords could be hit by another massive tax raid, as the Office of Tax Simplification outlines its recommendations for an overhaul of…

Read more

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter

Categories

Popular articlesBusiness resources from FarillioGeneral businessGuestInsuranceLandlordLandlord resources from FarillioLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19 business support hub

Address

6th Floor99 Gresham StreetLondonEC2V 7NG

Sol House29 St Katherine's StreetNorthamptonNN1 2QZ

© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.