
“Every banking provider and their accounts are different, with different fee structures, features, and mobile apps, so choosing the right account for your business needs can make it easier to manage your finances in the future.”
Do you want to pay monthly fees?
The majority of business bank accounts come with an introductory offer of no charges for a period of 6 to 24 months.Whilst a lot of challenger banks such as Tide and Revolut do not charge any monthly fees, there are some downsides with these kinds of accounts, since they currently do not offer loans or overdraft facilities (at the moment) and this could be vital for your business.
High Street Banks | Challenger Banks | |
Monthly Fees | £5 – £25 (with free introductory period) | No, but have paid premium versions |
Online Banking | Yes | Yes |
Overdraft Facility | Yes | Not currently |
FX fees and ATM fees | Yes | No |
Do you need an overdraft facility?
An overdraft allows you to borrow a fixed amount each month for your business and for some companies, the extra financial cushion can be essential to maintain a healthy cash flow. Traditional banks like Natwest, Barclays and Santander will always offer an overdraft facility (charged with interest) and the amount you can borrow will depend on your company turnover, credit status and repayment history.Do you send money or work abroad?
Challenger banks have gained traction over not charging FX fees or ATM fees when taking out money abroad – something that high street banks will charge for. If you are regularly sending money abroad for business expenses or withdrawing money when working in other countries, it is worth checking the fees that apply and basing your business bank account on this.Will you need loans and finance?
If you bank with a high street bank, you will usually get quicker access to business loans and finance from that particular provider and get preferred rates as one of their customers. Other perks include having access to a business manager from a local branch, business grants, networking and mentoring. With challenger banks, they typically do not offer any extra finance or loan options, although this is something that is likely to be introduced over the coming months or years. Read more: What to do if your business bank account is closed downShare this story