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Do I Really Need a Business Bank Account? Exploring the Benefits and Requirements (Updated for 2024)

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Do you really need a business bank account?

The need for a business bank account is a common and very important question and choosing the right business bank account for your business is equally as important. Below we’ll cover key aspects such as determining if you need a business bank account and things to consider when opening an account.

The requirement for a business bank account is very much determined upon the legal structure of your business. If you have a limited company then you must have a bank account in the name of your business and not you personally. This is because a limited company is considered a separate legal entity in the eyes of the law and so must be separate from you i.e. the business owner personally.

Whether you're legally obliged to or not, we think it good practice to keep your business and personal finances separate. Keeping your business and personal finances in separate accounts allows you to keep track of your business finances without personal savings or other transactions confusing matters.

As a sole trader you could opt to open a second personal bank account to transact all of your business dealings. However, many banks' terms and conditions state that personal accounts should be used for personal transactions only, not business transactions, and your bank could force you to close your account and open a separate business account.

How easy is it to open a business bank account?

The process of opening a business bank account is relatively straightforward and not dissimilar to opening a personal account. You will need ID and details about your business such as name and company number.

Dependent upon your choice of bank you may not even need to go into a branch to open an account. Online banks such as Starling Bank and Tide can be set up on your phone in a few easy steps.

Do I have to pay for a business bank account?

Many banks charge for access to a business bank account and charges can vary significantly from one bank to the next. The manner in which banks charge for a business bank account also vary from bank to bank.

Some banks may charge a monthly fee for holding the account and others may charge based on transactions, charging a small fee for every payment in and out of the account.

Many will charge both a monthly fee and charge for transactions in and out of your business bank account. It's important to understand all of the associated banking fees before opening an account.

Choosing the right business bank account for your business.

Every business will have its own requirements of a business bank account, and you will also have your own personal preferences on how you like to interact with your bank.

Multi-Currency Accounts

You should consider additional requirements such as foreign currency, for example; does your business require more than just a Sterling account? Many banks offer Euro and US Dollar accounts among other currencies. These accounts often come at an additional cost so you should investigate these at the outset if you are likely to need them.

Handling Cash

If your business is likely to handle physical cash, then you may want to opt for a bank with a physical presence close to where your business operates if you need to deposit cash on a regular basis. Many online banks offer the ability to deposit cash at a Post Office - you should check what charges apply as this may not be suitable if you are depositing cash on a regular basis.

Need an Overdraft?

You may also require an overdraft with your business bank account. An overdraft facility can provide a business with much needed working capital as it looks to grow or just to cover the ebbs and flows of day-to-day trading of the business. Almost all banks offer an overdraft facility, however you should check the eligibility requirements plus any guarantees that are likely to be required in addition to the fees for operating within your overdraft.

Accounting Integrations

While this may be a lesser consideration, you might want to check if your bank integrates with popular accounting software such as Xero, QuickBooks, Sage etc. If you’re managing your businesses bookkeeping requirements yourself, having your banking information integrate seamlessly with your accounting software can save valuable hours each week.

Other considerations for opening a business bank account

Having a bank account in your businesses name can help build up a credit history for your business. This may be useful should you require a business loan in the future as many banks will look at your credit history when considering your eligibility for business finance.

Another factor to consider is that generally, a business bank account will come across more professional to customers and clients than a personal account. Dependent on what your business does and how your financial transactions are undertaken with customers, this can help build confidence that they are dealing with a professional business.


Our TOP 5 business bank account recommendations

Starling Bank

Starling Bank business bank account website screenshot

Monthly Fee


Transaction Fees



Yes (EUR & USD)

Xero & Quickbooks Integration


Starling Bank offers accounts for both Limited Companies & Sole Traders and with no monthly fees or UK payment charges puts them in pole position as our number one recommended business bank account.

The Starling Bank business current accounts integrate with popular accounting packages such as Xero, Quickbooks & FreeAgent. 

Starling Bank does offer a paid for 'Business Toolkit' at £7 per month, where you can send invoices, calculate your tax liability and record and submit VAT returns.

Personally, we wouldn't recommend using the Business Toolkit over the likes of Xero & Quickbooks who have been big players in the accounting software game for a long time. Accounting software packages typically have a lot more additional features and integrations to help your business run smoothly and allow your accountant to gain access to help and support you in real time.

Starling also offers multi-currency accounts in both Euro & US Dollar and £2 per month and £5 per month respectively.

For more information on Starling Bank business bank accounts, check out their website here.

Tide Bank

Tide Bank website screenshot

Monthly Fee


Transaction Fees

Yes - 20p



Xero & Quickbooks Integration


At face value, Tide also offers a free business bank account. However, while there isn't a monthly fee to have a Tide business bank account, they do charge you 20p for every transfer in and out of your business.

Depending on the number of transactions and the average value of your transactions that go through your business on a monthly basis, those fees could add up.

Tide Bank does offer a number of paid for accounts including the Plus, Pro & Cash back accounts. With the Pro back account you get unlimited bank transfers at no extra charge. The Pro account costs £18.99+VAT per month.

If you have more than 95 bank transactions in or out of your account each month then switching to the Pro account could save you money on transaction fees in the long run.

For non-VAT registered businesses, you'd need over 114 transaction in and out before you start to see a saving on fees.

For more information on Tide Bank business bank accounts, check out their website here.

Monzo Bank

Monzo Bank website screenshot

Monthly Fee


Transaction Fees




Xero & Quickbooks integration

Only with Pro account

Monzo offers a basic business bank account for free and if you need a no-frills bank

account then a Monzo business bank account will fit the bill.

For all the extra add-ons you'll need to upgrade to the Business Pro account which costs £5pm.

With the Pro version you'll get multi-use access, Xero & Quickbooks integration and the ability to raise and send invoices via the Monzo app.

Monzo also offers loans and overdrafts so if managing cashflow is going to be an important consideration for you and your business then it would be worth looking further into Monzo credit facilities.

For more information on Monzo Bank business bank accounts, check out their website here.


Revolut Bank website screenshot

Monthly Fee


Transaction Fees

Yes - 20p to send & 0.8% + 2p to receive


Yes - 25+ Currencies

Xero & Quickbooks integration


If your business operates internationally then Revolut may be the bank for you. With over 25 currencies available you'll be well placed to do business with your customers across the globe.

Be aware, with a Revolut business bank account, your money is not protected by the Financial Services Compensation Scheme.

That's not to say you shouldn't use Revolut, but you may want to consider having an additional bank account as a back-up where you deposit and save most of your cash and use Revolut as your 'day-to-day' account for business transactions.

For more information on Revolut business bank accounts, check out their website here.

Mettle by NatWest

Mettle Bank website screenshot

Monthly Fee


Transaction Fees

Not that we're aware of



Xero & Quickbooks Integration


Mettle is part of the NatWest banking group and while we're typically not big fans of the high street banks, we do think Mettle is a strong contender.

Here's one BIG reason to have an account with Mettle. You get FreeAgent accounting software included for free. NatWest owns FreeAgent and as a perk to its customers offers the accounting software for free.

While FreeAgent isn't at the top of our accounting software recommendations, we do absolutely recommend that every business owner uses something to keep on top of their accounting records.

With FreeAgent you can send custom invoices, record your expenses, mileage, VAT and it also has a handy calculator to keep a running estimate of your tax bill. Not bad for a freebie!

Mettle does impose limits on the amount of cash you can hold within your account, for Sole Traders it's £50,000 and for Limited Companies it's £100,000.

You could always have an account with another bank if you were getting close to the limit.

For more information on Mettle business bank accounts, check out their website here.

We hope you found this article useful and has given you some food for thought on what business bank account to choose for your business.

Let us know in the poll below if you already bank with or are thinking of banking with one of our recommended business bank accounts.

Which bank do you currently use or would consider switching to for your business?

  • 0%Starling Bank

  • 0%Tide

  • 0%Monzo

  • 0%Revolut

Duo Accountants can support you with your important business decisions such as choosing a business bank account, forming a limited company or registering for VAT.

For more information on how we can help you please browse our website and get in contact.


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