Why the branch visit stopped being the default
Most UK high street banks now push business applications into an app or a web form, and the challengers never had branches to begin with. A sole trader in Sheffield can be up and running the same afternoon; a limited company needs its Companies House registration to match the name on the application, which is where a lot of Tuesday morning frustration starts.
Three frictions come up again and again.
Documents that don't match. You need photo ID plus two separate proofs of address, and they must all be different documents. Some providers still ask for paper statements or bills, which is awkward if everything you own arrives as a PDF.
Cash that costs money. Online accounts are built for card and transfer income. Deposit a few hundred pounds in coins and you meet percentage fees and minimum charges that a traditional business account used to absorb.
Fees buried in the exchange rate. A 2.5% FX markup sounds manageable until you are paying a European supplier every month. It is the single most common reason small firms move accounts a year after opening one.
What the pricing actually looks like
Published rates move around, so treat the table below as a starting map rather than a quote. Every provider listed is regulated in the UK and offers a full business current account with a debit card.
| Provider | Monthly fee | Cash deposit | Standout feature | Watch out for |
|---|
| Starling | Free | 0.7%, £3 minimum at Post Office | Free invoicing, real-time Xero/QuickBooks/FreeAgent sync | No interest on business balances; cash still costs |
| Monzo Business Lite | Free | £1 per deposit | Instant notifications, Pots for tax | Accounting integration only on the paid plan |
| Monzo Business Pro | £5 | £1 per deposit | Connect Xero, FreeAgent or QuickBooks in-app | Small monthly cost adds up for very light users |
| Tide (free plan) | Free | 0.5% (£2.50 min) at Post Office, 3% at PayPoint | Free transfers for the first 12 months | 20p per transfer afterwards; 2.5% FX |
| Mettle | Free | Free | FreeAgent built in, no owner limit issues for small firms | Suits companies with a small number of owners |
| ANNA Money | £0 / £14.90 + VAT / £49.90 + VAT | Percentage-based | Invoicing and tax reminders in one app | Not FSCS protected on the pay-as-you-go tier |
| Zempler Business Go | Free | 0.55%, £4 minimum | Cheap everyday transfers | Three free outgoing payments monthly, then 35p |
| Revolut Business Grow | £30 | Varies | Multi-currency, team cards, payment links | Pricier if you only need a basic account |
If your income is almost entirely card and bank transfer, a free business bank account UK comparison usually lands on Starling, Monzo Lite or Mettle. If cash is a real part of turnover, the percentage figure matters far more than the monthly fee.
Three businesses, three different answers
Priya is a freelance illustrator in Manchester. She invoices three clients a month, all by bank transfer, and never touches cash. She opened Monzo Business Lite on a Sunday evening, and the instant payment notification is what sold her: she knows within seconds when a late invoice finally lands. Sarah, who runs a small design studio in Leeds and pays a printer in the Netherlands, moved to a provider with transparent FX after working out that her old bank's markup was quietly costing her more than the monthly fee ever did. Tom sells coffee at a Saturday market in Bristol, deposits roughly £600 in notes each week, and found that Starling's 0.7% at the Post Office beat a 3% PayPoint rate once his volume climbed.
The pattern holds: the account that suits a service business rarely suits a cash-heavy one, and neither suits a company paying overseas suppliers every week.
Setting up in an afternoon
- Confirm your business structure. Sole traders apply with their own name and National Insurance number; limited companies need the company number and registered address exactly as filed at Companies House.
- Gather three documents. One photo ID (passport, biometric residence permit or photocard driving licence) plus two proofs of address issued recently. Keep them sharp and complete, since blurred or expired scans are the most common cause of delay.
- Check the ownership rules. Some accounts are limited to companies with one or two owners, so an equal partnership of three may need a different provider.
- Apply in the app, not over the phone. Identity checks are usually automated, and most decisions arrive within minutes to a couple of working days.
- Set up before you need it. Lenders and payment providers look at account history, so six months of clean records is worth more than a perfect business plan.
Details that catch people out
Cheques still arrive from older clients. Starling lets you photograph one under £1,000 for free, and posts anything larger through a freepost address. Cash withdrawals are capped daily at many providers, and the £1-per-withdrawal charge on Tide adds up fast for anyone paying a market trader in notes.
Deposits are protected up to £85,000 under the Financial Services Compensation Scheme at the regulated banks. ANNA's pay-as-you-go tier sits outside that protection, which is fine for a small float and less fine for a tax reserve.
One last thing worth doing before you commit: run last month's transactions through the fee table. Count cash deposits, outgoing payments and any foreign currency, then compare that total against the monthly fee. The cheapest headline account is rarely the cheapest account for your particular week.
Open one account this week, move a single client payment through it, and let the statement tell you whether it fits. Switching later is free and guaranteed under the Current Account Switch Service, so the first choice does not have to be the final one.
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