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Business current accounts are like personal current accounts. That means you can:
Carry out typical day-to-day banking, but on behalf of your business instead of yourself
Receive a business debit card and usually access to a business banking app
Make electronic payments
Withdraw and deposit money
Receive payments from any customers or clients
Cash cheques
You can also apply for an overdraft. Business accounts might authorise a larger overdraft facility than a personal account too.
Also, you can tailor your business account's features to meet your business needs. It keeps your business finances separate from your personal finances. You can track and manage your tax obligations by setting up an amount to be set aside on any income. You can manage your business cash flow and review detailed statements.
Most business current accounts offer the basics to meet your business banking needs. But some offer extra features.
For example, some business current accounts might let you earn interest on any money you have in your account. Some might offer an overdraft facility, with rates differing by provider. Some may have transaction limits too.
Some accounts on offer may charge a fee. This fee might be fine if it offers additional features that are useful for your business, such as interest rates or transfers. The bank might charge the fee monthly or annually. Or they might charge you by transaction. Not all providers charge a fee as soon as you open an account, some might offer a fee-free period.
Other business account providers may ask you to declare your business’s turnover to check you make a certain amount of profit. You need to make a certain amount of profit to be eligible for this type of account.
Some providers offer accounting software that can help with managing expenses, tax returns and tracking performance. This helps manage your business’s finances and could save you money, as you won’t need to buy it separately.
It’s also worth checking if the business current account you pick supports international payments, especially if your business trades with customers or clients overseas.
The process is similar to opening a current account. You usually apply online or in branch. Your bank asks you (and any company directors) for proof of ID, such as a passport or driving licence. You need to provide proof of both your address and your business’s registered address along with contact details.
Once your provider has checked and verified all your information, your account should be ready for you to use. Your bank can sometimes complete the checks on the same day, but some providers can take longer.
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Find out how to apply for your chosen business current account
You can switch your bank account by using the Current Account Switch Service (CASS). This service allows you to switch easily, and it comes backed with a guarantee that your old bank’s responsible for any payments missed during the switch. You just need to let your new bank know about your previous bank account.
You may want to switch for a number of reasons. Maybe it’s for an incentive offered by a new account provider, or you want a better interest rate. It could also be because you’re unhappy with the customer service offered by your current bank.
If you’re a limited company then you must use a business account. If you’re a sole trader then you can use your personal account if you wish. It can be confusing to separate business transactions from the personal though. A business account can help you with this.
Getting a business current account shouldn’t take too long. If you apply online or in branch, you can sometimes open it on the same day. It may take longer though if the bank requires further information or if there are any additional checks it needs to run.
It can cost you to have a business current account, but it depends on the type of account. Some accounts charge a monthly or annual fee, some don’t charge at all. Some accounts may charge after a period of time, following an initial fee-free period.
Yes, you can usually send and receive international payments from your business account. Your bank might charge you for non-sterling transactions and fees vary depending on your bank. It's worth looking at all account options, especially if your business regularly deals with foreign currency.
Yes, you can usually open a business account with a poor credit score, but you may find your options are limited to certain basic business accounts.
You may be limited in the number of transactions or deposits you can make, depending on the type of account you open. Some accounts may limit the number of free transactions, or apply fees if you go over a certain limit.
Yes, you can transfer money from a business current account to a personal account in the UK. This can make tax compliance tricky though, so it’s important to keep clear records.
Yes you can have more than one business account. It might be helpful, particularly if you have multiple businesses.
