The costs UK owners usually miss
Most people compare headline monthly fees and stop there. That is where the trouble starts. A plan advertised at £0 can still take a slice of every cash deposit, charge 20p to 35p each time you pay a supplier by BACS, and add a margin on every euro you convert. Over a year, a busy tradesperson can quietly hand over more than they would have paid to a bank that looked expensive on paper.
Cash is the second blind spot. Joiners, market traders, salon owners and anyone selling at weekend fairs still handle notes and coins. Some app-based providers only accept cash through Post Office or PayPoint counters, and the charge is a percentage rather than a flat rate. Starling takes 0.7% with a £3 minimum per deposit. Tide takes 2% with a £1 minimum on its entry plan. A shop banking £800 a week in takings feels that difference quickly, especially when margins are already thin after stock, rent and staff.
The third is approval. A sole trader a few months into their first year, or a director whose company was registered recently, can hit a wall. Providers want a Companies House number, details of anyone holding 25% or more of the shares, proof of address for each director, and a plain description of what the business actually does. Applications stall when the trading address does not match the registered one, or when the stated activity is too vague. Setting aside one evening to gather documents saves weeks of waiting later.
There is a regional layer too. Sort codes and account formats in Northern Ireland occasionally trip up newer apps, and partnership registrations in Scotland carry extra paperwork. Ask the provider directly rather than assuming a process designed for England applies everywhere.
What each account model really costs
The table below reflects entry-level business accounts from providers that accept online applications. Figures are indicative and shift with promotions, so confirm on the provider's own page before you commit.
| Provider and plan | Monthly charge | Cash deposit cost | Day-to-day payments | Best suited to | Points to check |
|---|
| Starling Business | £0 | 0.7%, £3 minimum, Post Office | Unlimited UK transfers at no charge, ATM withdrawals in the UK at no charge | Businesses wanting app control plus Post Office cash access | Cheque imaging capped at £1,000 per item |
| Monzo Business Lite | £0 | £1 per deposit at PayPoint or Post Office | UK transfers at no charge, instant notifications | Sole traders and small limited companies | Accounting software sync sits on the paid tier |
| Monzo Business Pro | £5 | £1 per deposit | Same payment terms with added tools | Owners who want Xero, FreeAgent or QuickBooks fed automatically | Tax pots and virtual cards are Pro-only |
| Tide entry plan | £0 | 2%, £1 minimum | UK transfers at no charge, BACS at 20p | Low-volume domestic trading with little cash | Percentage model gets costly at high deposit volumes |
| Tide Plus | £29.99 | 2%, £1 minimum | Includes a monthly allowance of international payments | Businesses paying overseas suppliers regularly | Weigh the allowance against your real payment count |
| NatWest Business Current | £0 annual fee | Branch dependent | 35p per BACS or Faster Payment | Established firms wanting branch contact | Per-payment charges add up for high volumes |
| Barclays Business Account | Around £102 effective annual fee | Branch dependent | Tiered | Traditional setups with lending needs | Fee structure varies with turnover |
| HSBC, RBS, Lloyds Business | Around £120 effective annual fee | Branch dependent | Tiered | Firms wanting relationship managers | Entry pricing rarely matches headline marketing |
| Revolut Business Basic | Roughly £120 effective annual fee | Not supported | 20p per Faster Payment | Import and export heavy micro-businesses | Limited cash handling |
| Wise Business | £0 on the entry tier, £50 one-off on the advanced tier | Not supported | Mid-market conversion with transparent fees | Freelancers invoicing clients in several currencies | Not a full clearing bank for cash work |
One pattern stands out. Accounts built for speed and low overheads handle UK payments well, while accounts built around branches handle cash and lending better. Choosing an online business bank account for sole traders is mostly about which of those two problems you actually have.
Matching the account to how you trade
When cash lands in your till every week
Do the arithmetic before you sign. Take a typical week's deposit, apply the percentage, and multiply by fifty. Aisha, who runs a bakery in Bradford, moved from a percentage-based deposit charge to a plan with branch access and cut her annual banking cost by several hundred pounds, even though she now pays a small monthly fee. Her takings land in the account the same day, which also helped her cash flow forecasting.
For anyone in this group, the question is not whether the account has a monthly fee. It is how much of your revenue passes through a deposit mechanism that charges a cut. A business bank account with low cash deposit fees is worth a slightly higher subscription.
If you invoice clients abroad
Currency margins cost more than monthly fees once you trade overseas. Tom, a landscape gardener in Devon, buys equipment from the Netherlands and pays in euros. On his old account, the conversion mark-up on a £4,000 order was larger than a year of subscriptions elsewhere. A multi-currency business account that converts at the mid-market rate changed that line in his budget without changing how he works.
If you registered your company recently
New directors should apply as soon as the certificate arrives, with the company number, PSC details and a clear trading description to hand. Some providers run credit checks, others do not, and a limited company business bank account UK applicants can open without a trading history usually comes from the app-based side of the market.
A short list you can work through
- Write down last month's real activity: number of UK transfers, cash deposited, overseas payments, cheques received. Most people overestimate payments and underestimate cash.
- Apply that activity to two or three plans rather than reading marketing pages.
- Confirm you are covered by the Financial Services Compensation Scheme. Eligible deposits hold protection, with the ceiling set per person or per small company depending on the product.
- Check the switch process. The Current Account Switch Service covers most business current accounts and handles the redirect of incoming payments for you.
- Ask your accountant which software the account feeds natively. Manual exports into Xero or QuickBooks cost hours you will not get back.
- Keep the old account open for two months after switching, until standing orders and supplier details have settled.
Local support exists if you want a second opinion. Chambers of Commerce across the UK run banking clinics, and the British Business Bank's finance hub lists providers by region and by business stage. Post Office branches handle cash deposits for several of the app-based accounts, so check your nearest branch opening hours before you rely on Saturday deposits.
The sensible shortlist is rarely longer than three names. Pick one for everyday payments, one for cash if you handle it, and one for overseas work if you trade abroad. Then read the fee schedule with a highlighter, because that document tells you more than any comparison table, including ours.
Start with your own transaction history this week. Two hours of counting beats a month of second-guessing, and your accountant will thank you when the year-end paperwork lands.
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