Choosing the right Bank Account for my Start-up Business

Choosing the right bank account for your Start-up business is a really important decision, so how do you know your making the right choice? This is a question you have probably asked yourself when starting a new business.

As part of setting up your business, one of the first jobs on your list will be to open a bank account. It’s really important that you do your research, as each bank account will offer different services and features, as well as hidden fees that can sometimes be overlooked. That’s why we have put together some information about a few well-known bank accounts to see what each account has to offer you and your start-up business.

You will find that most business bank accounts offer the first 12 months free then charge a fee after the 12 months is up.

NatWest Business Account

NatWest offers 4 types of business accounts:

  • Free Mobile Account for the self-employed
  • Community Account for charity and club businesses
  • Business Account for businesses that have been trading for over a year
  • Start-Up Account for businesses that have been trading for less than a year

We will be looking at the Start-up Account to see what it has to offer a start-up business.

NatWest are currently supporting their customers with programmes and schemes such as, ‘Business Builder’ and their local enterprise managers.

They are also offering support from award winning accounting software called ‘Free Agent’. This software helps you to monitor cashflow, send invoices and record expenses, which means you can run your business more effectively.

They are also offering digital payments called ‘TYL’. This will make it simpler for you to make and receive payments. Fees do apply to use this service.

They also charge transaction fees. The first 18 months is free but after that you will be required to pay a fee of 35p to take out money from cash machines and 70p to make cash payments. There is no monthly charge for this account.

Barclays Start-Up Account

Barclays offers 2 types of business accounts:

  • E-Payments plan
  • Mixed Payment Plan

The first one is called the E-payments plan. This is suitable for businesses that mainly make and receive electronic payments such as online banking and online purchases with debit cards.

If you are going with the e-payment plan, then there is no fee to make and receive payments, however they do charge £1.50 to make cash payments and transactions. They don’t charge to use the cash machine but there is a monthly charge of £8.50 for the account.

The second option is the Mixed Payment Plan. This is suitable for businesses that use cash, cheques and online banking to make and receive payments. This account charges 35p per transaction, 9p per cash payment and 65p for each cheque payment. There is no charge to use the cash machine however there is a monthly fee of £8.50 for the account.

The first 12 months are free on both accounts.

HSBC Business Accounts

You will have access to some support called ‘Tomorrow Ready Hub’. This gives you insights and resources to help you with your cash flow management skills and transform your business to digital. HSBC offer first 12 months free, but fees for payments and transactions start from £4 per transaction. They do have business cards available. These are free for the first 12 months and then the annual fee for each card is £35. These will allow you and your employees to make payments.

Lloyds Business Accounts

You are probably wondering if Halifax offer business accounts and unfortunately, they don’t, however Lloyds do. Lloyds are a part of the same group as Halifax, so let’s have a look at the Lloyds accounts. Lloyds offer a Start-Up and Small Business account, and like the others the first 12 months are free then only £7 afterwards. These are the features included:

  • Free electronic payments made in or out the of account
  •  £1 per £100 cash payments in or out of the account
  • 80p per cheque in or out the account
  • Free mobile banking app with free useful guides and business tools

Lloyds offer financial support for small businesses. These are loans, assets, over drafts, invoice finance, and credit cards. They also offer a service called ‘Cardnet’. This service allows you to accept card payments in person, online or over the phone. The joining fee is £175. The monthly fee for new customers is £25 and for existing customers it is £15.

Lloyds also supports their customers with training if needed, such as online digital skills training. This is helpful if you need support to improve productivity, increase turn over or enhance customer insight. Lloyds Bank Academy has free tools and interactive webinars to help your business thrive in a digital world.

Starling Business Tool Kit

This account lets you do your own bookkeeping all in one place. You can manage your invoices, bills, tax, VAT and more for just £7 per month. The first month is free. This account will help you save time sorting through invoices and receipts. The toolkit will help you stay on top of tax, invoices, bills and more.

This account will be great for those who:

  • Are a freelancer – Sole trader, contractor, chief wearer of many hats – however you describe what you do, your life could be made easier by the Business Toolkit.
  • Feel overwhelmed by admin – Spend less time sorting through invoices and receipts – and more on what you’re good at.
  • Want to keep everything in one place – Manage things like bookkeeping, bills, VAT and self-assessment tax, directly from your bank account.

Choosing the right Bank Account for your Start-up Business is always tricky so we hope this blog has been of some use to you. To decide what bank account is suitable for your start-up business, it is important to find the right one that works best for you and your business.

Disclaimer: All information is correct as of 09/03/22, we have only chosen 5 bank accounts to focus on but there are many more banks offering business accounts.

Links:

https://www.natwest.com/business/bank-accounts/startup-bank-account.html?intcam=branch%201

https://www.barclays.co.uk/business-banking/accounts/start-up-business-account/

https://www.business.hsbc.uk/en-gb/everyday-banking/business-accounts/small-business/kinetic

https://www.lloydsbank.com/business/business-accounts.html

https://www.lloydsbank.com/business/business-accounts/new-businesses.html?WT.ac=lloyds-bb_and_sme-business_accounts-hub-tile-FOM-new_businesses

https://www.starlingbank.com/business-account/sme-business-toolkit/

Created by Gemma Edwards