Branches are thinning out, cash has not disappeared
Most UK owners now start their search the same way: a search bar, a comparison page, and a signup form that promises a decision in ten minutes. Starling alone reports more than half a million business customers, and app-based providers have become the default for freelancers, contractors and small limited companies.
Yet the UK is not a cashless country in practice. A plumber in Leeds still takes payment for a boiler job in notes. A market stall in Cardiff still banks Saturday's takings on Monday. That is where online accounts diverge sharply, and where the cheap headline price stops being cheap.
The other local quirk is structure. A sole trader is not legally required to hold a separate business account, though keeping one makes HMRC queries and Making Tax Digital reporting considerably less painful. A limited company is a separate legal entity, and mixing its money with a director's personal spending is the kind of thing that turns an ordinary tax check into an uncomfortable one. Both routes are open to online applicants, but the documents differ.
What comparison tables tend to bury
Monthly fees get the attention. Usage fees do the damage. Industry research on UK business banking consistently finds that owners underestimate the cost of paying in cash, sending money abroad and withdrawing notes, because those charges sit in a separate tariff PDF rather than on the signup page.
Three things deserve a look before anything else. First, the cash deposit rate, usually a percentage with a minimum charge, and whether deposits go through a Post Office counter or a branch. Second, the per-transfer fee once any introductory allowance runs out. Third, whether accounting software connects directly, since a business account that cannot talk to Xero, QuickBooks, Sage or FreeAgent means somebody re-typing figures at month end.
A working comparison of the main options
| Provider | Monthly cost | Suits | Trade-offs |
|---|
| Starling Bank | £0 | Sole traders and limited companies wanting plain, low-cost banking | Cash deposits at the Post Office carry a 0.7% fee, minimum £3 |
| Tide | £0 on the entry plan; paid tiers around £9.99 and £49.99 | New businesses wanting invoicing inside the app | Free plan charges around 20p per transfer after the introductory period; cash deposits around 0.5% with a minimum |
| Monzo Business | Lite £0, Pro £5 | Sole traders who like pots, instant alerts and simple pricing | £1 per cash deposit; accounting connections sit on the paid tier |
| Mettle (NatWest) | £0 | Limited companies with one or two owners using FreeAgent | No branch access and no borrowing facility |
| Revolut Business | roughly £10 to £90 depending on plan | Businesses invoicing clients overseas | An e-money provider rather than a bank, with allowances that vary by tier |
| ANNA Money | £0 to about £49.90 | Owners who want admin help bundled in | Some administrative tasks attract separate charges |
Prices shift, so confirm the current tariff on each provider's pricing page before applying. Every figure above reflects published pricing rather than a quote.
Match the account to where the money comes from
Priya, a freelance illustrator in Bristol, spent her first year running business income through a personal account. Nothing broke, but her bookkeeping took a weekend every quarter. She moved to a free sole trader account with built-in invoicing and now files from the same app she gets paid in. Her weekly cash from a local gallery, roughly £200, costs her a small percentage to deposit, which she decided was cheaper than a monthly fee she would pay every month regardless.
Callum runs a two-van heating firm in Sheffield. He looked at the same free accounts and chose differently. His customers pay by card and bank transfer, but he still handles several hundred pounds in cash most weeks, plus occasional supplier payments in euros for parts. A bank with branch or Post Office deposit facilities and predictable international pricing mattered more to him than invoicing tools he already had through his accountant.
Both decisions were reasonable. The mistake is copying someone else's choice without checking your own deposit pattern.
For limited companies, one more factor enters: multi-director access. Providers differ on whether a second director can hold their own login and card, and whether that costs extra. A company with two active directors should confirm this before signing up rather than after.
Opening the account without losing a week
The application itself is short. The waiting is usually caused by paperwork.
- Confirm your business status. Sole traders need a UTR; limited companies need an active Companies House record.
- Gather identification: passport or driving licence, plus proof of UK address.
- Check the Companies House timing. Several banks will not process an application within a few days of a new incorporation or a register change.
- Have your estimated turnover and a plain description of what the business does ready. Vague answers slow manual reviews.
- Apply in the business name exactly as registered, then set up the app and order the card.
- If switching, use the Current Account Switch Service. It moves Direct Debits, standing orders and incoming payments, and most UK banks follow the same guarantee.
Cash-heavy businesses should also check the nearest Post Office counter that accepts business deposits, since some smaller branches limit amounts.
Costs that surface around month three
The first statement is usually clean. The third one is where the truth lives. Look for a transfer fee that started after an introductory window, an ATM charge per withdrawal, a cash deposit percentage that quietly outpaced the monthly fee you avoided, and a card issuance fee for additional team members.
None of these are hidden in a shady sense. They are published, just not on the page most people read. Ten minutes with the tariff document beats a year of guessing.
Pick the account that matches how your money actually arrives, not the one with the friendliest signup screen. Then check the deposit rate before you press submit. If you already bank somewhere, the pricing page is one click away, and a Sunday evening spent comparing two tariff PDFs is usually time well returned.
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