Why the branch is no longer the default
Most UK businesses now open their account on a phone, not in a high street queue. Sole traders register with HMRC, limited companies register at Companies House, and both can apply to a digital provider the same afternoon. Approval often lands within one working day, sometimes minutes. For a freelancer in Bristol or a market trader in Leeds, that speed matters more than a marble lobby.
The trade-off is that online accounts behave differently from the old branch model. Some are full banks with deposit protection. Others are payment institutions that safeguard your money instead of holding a banking licence. Both are legal and both work. They simply carry different protections, and knowing which one you are opening is the first real decision.
Three checks before you compare anything
Check the protection, not the logo. Accounts from Starling, Monzo, NatWest, Barclays, HSBC and Lloyds sit inside the Financial Services Compensation Scheme, so balances are protected up to the standard limit per eligible business. Tide holds customer money through a partner bank, which gives similar cover. Providers such as Mettle, ANNA, Revolut and Wise safeguard client funds in segregated accounts. That is a different legal structure. If your balance regularly runs high, ring-fence the surplus somewhere protected.
Check your business type. A sole trader needs proof of trading and a UK address. A limited company needs its registration number and usually a director's identity check. A mismatch between your trading name and your registered name is the single most common reason an application stalls. Sort that before you apply, not after.
Check where your cash lands. App-only accounts are excellent for card and bank transfers and awkward for notes and coins. If takings arrive in cash, ask about Post Office or PayPoint deposit routes at the start. A Bradford convenience store or a Cardiff barber will feel this constraint within a week.
What the main options cost
Fees below are drawn from provider pricing pages and a November 2026 comparison published by Starling. Treat them as a starting range and confirm current charges before applying.
| Provider | Monthly charge | International use | Cash in | Protection | Suits |
|---|
| Starling Business | £0 | Low FX cost, no monthly fee for euro payments | Post Office deposits | FSCS | Freelancers and small limited companies |
| Tide (base plan) | £0 | 20p per transfer plus FX margin | Post Office and PayPoint | Via partner bank | New businesses wanting optional add-ons |
| Tide paid plans | Roughly £12 to £70 plus VAT | Lower FX as the plan rises | Same | Via partner bank | Teams invoicing heavily |
| Mettle | £0 | Limited, no SWIFT | Not supported | Safeguarded | Sole traders happy with FreeAgent-style tools |
| Monzo Business Lite | £0 | Standard card FX | PayPoint | FSCS | Very small operations |
| ANNA | £0, £14.90 or £49.90 plus VAT | Card payments abroad | Limited | Safeguarded | Owners who want invoicing and tax reminders |
| NatWest, Barclays, HSBC, Lloyds | £0 to roughly £10 effective monthly cost | Full SWIFT and trade services | Branch and Post Office | FSCS | Businesses needing lending or cash |
Two patterns stand out. Monthly charges are rarely the biggest cost. Transaction fees, FX margins and cash handling quietly set the real bill. And the accounts with the lowest headline price usually offer the least lending.
The gaps that catch people out
Overdrafts are where digital accounts thin out. Starling offers one subject to approval. Mettle offers none. Tide's lending sits in separate products. A seasonal business in Aberdeen that needs a £10,000 buffer in January should start with a relationship bank rather than assume the app will flex.
Multi-director access is the second gap. Some plans give one enhanced user, others five. A Glasgow agency with three directors and a bookkeeper needs to verify this before signing, not after payroll day.
Cash deposit limits are the third. Post Office arrangements usually cap daily amounts and carry a small charge per deposit. Fine for a Saturday market stall. Less fine for a business taking several thousand pounds in notes each week.
What this looks like in practice
Sarah, a freelance illustrator in Bristol, opened Starling in a morning, connected her accounting software, and now invoices in the same app she checks her balance in. Her monthly charge is zero and her main cost is a small FX margin when a European client pays in euros.
Dev runs a household goods shop in Leicester. He tried an app-only account, discovered that depositing takings meant a bus ride and a per-deposit charge, and moved his day-to-day banking to NatWest while keeping Tide for supplier transfers. Two accounts, two jobs, no drama.
Match the account to your turnover pattern
Domestic-only service businesses with steady card income do well on a £0 monthly account. Pick the one whose accounting integration you already use, because reconciling 40 transactions by hand each month costs more in time than any subscription.
Limited companies with staff need payroll runs, multiple users and a clear audit trail. Here the effective annual charges matter more than the monthly headline. Barclays and HSBC sit a little higher on that measure than NatWest or RBS, and the difference buys branch access and lending conversations.
Importers and exporters should separate two questions. Who holds the money, and who moves it across borders. Many UK firms bank domestically and route currency through a specialist multi-currency account, which keeps FX costs visible and separate.
Contractors working through a limited company should confirm dividend and salary payment support plus accountant access. A view-only login is not enough for a bookkeeper filing quarterly updates.
Switching without breaking your payments
The Current Account Switch Service moves Direct Debits, standing orders and incoming payments in seven working days, and redirects payments sent to the old account for a set period afterwards. It is free to use and covered by a guarantee that refunds charges if something goes wrong. NatWest published a day-by-day timeline for business switches, and most banks follow the same rhythm.
Keep the old account open until the switch completes. Tell payroll and HMRC about the new details in the same week. Download every statement you may need for tax or a loan application, because access often closes the moment the account does. If you hold a Stripe, Shopify or Amazon payout, update the receiving bank details there too. Those are the connections people forget.
A workable plan for this week
- Write down your real monthly pattern: card takings, cash takings, overseas clients, number of people needing access.
- Shortlist two providers, choosing one protected bank and, if needed, one specialist for currency or invoicing.
- Apply with matching legal and trading names, and have identity documents ready for every director.
- Run the account for a full quarter before judging it. Review the actual charges on your statement rather than the marketing page.
- Recheck annually. Plan prices move, and a business that outgrew its starter account usually notices at the first VAT return.
Local support is closer than most owners expect. Chamber of Commerce branches in Birmingham, Manchester and Edinburgh run banking and finance clinics. Growth Hubs across England offer funded advice sessions. The British Business Bank publishes independent guidance on finance options, and the Federation of Small Businesses regularly surveys members on banking service quality.
Open two applications this week rather than one. Comparing the onboarding experience side by side tells you more about service than any review, and the account you keep will earn its place by handling your money without friction.
研究の知恵