How to choose a business bank account

27 September 2021

7 min read

Please be aware that this is a guide only and you should seek specific advice for your business*

Whether you’re just starting out on a new business venture or you’re looking to make changes to your existing business banking, choosing the right business bank account is crucial in managing your small business’ finances effectively.

We know that finding the right business bank account can be time consuming and overwhelming. That’s why we’ve put together this handy guide to help you make up your mind when it comes to choosing a current account for your company.

Consider your needs when choosing a business bank account

Understanding your business needs, and how a business bank account can cater to them, can help you choose the right bank account.

When it comes to business banking, different banks will often provide different services – and companies can have different requirements depending on their current size, goals and long-term plans.

For example, start-ups are often looking to keep costs to a minimum, so free banking services for the first few months or years can be a very helpful feature. More established businesses might be looking for a trustworthy bank with a good ethical stance, to maintain their reputation.

In deciding which business bank account is suitable for your business, you should be aware that external factors i.e. supplier costs are ever changing and therefore it is important that the business’ finances are forecasted and well planned.

Cash flow is important to evey business and a good way of maintaining it is by having a bank account that you can rely on, and that meets all of your business banking needs. This in turn can help you to manage your finances better, and help your company to excel.

Feel more prepared to make a choice

There are many things to consider but here are some important business banking features you should look out for in your search for the right business current account.

Online and mobile banking

Think about the ways you prefer to bank. If you like to manage your finances on the go, make sure you can access online or mobile banking with your business bank account.

Having, 24 hour access to a bank account is important when you need easy access to funds to help with the everyday running of your business. Online and mobile banking can also offer many other benefits, like secure transactions, automated payments and minimised overheads.

Customer Support

If you prefer to speak in person, look out for bank providers with local branches and helpful customer phone lines. This can make a real difference to your banking experience and help put your mind at ease if you ever need support.

Consider the help available for the business banking accounts you’re interested in and check that the customer service and support is efficient and easily accessible.

Monthly fees and free business banking

Compare costs like monthly account charges, cash deposit fees and withdrawal fees when researching your account.

With all the costs involved in running your own business, many business owners are looking for free business banking and low or no charges, wherever possible.

On average, UK banks offer free banking services to businesses for a period of 12 to 24 months. After this free period, monthly fees can range from £5 to £25, and sometimes higher. Not all bank providers offer a free period, so look out for that, too.

Free everyday banking

Look out for introductory offers from banks such as free everyday business banking for new business customers. This can make your journey as a business owner less stressful, especially if the introductory period is over a year – some even go beyond two years.

However, business current accounts can require a minimum balance and place limits on certain transactions to get full free banking. Also, remember to check what a bank means by free everyday banking to avoid unexpected charges.

Transaction limits

Many banks place limits on the cash deposits and transactions you can make in a given period.

When choosing a business bank account, keep in mind the volume and sizes of cash deposits and transactions that your business is likely to make.

Whether you’re a start-up or an established small business, you might want to consider an account that allows more transactions. You may feel more able to focus on the day-to-day when you’re less restricted by transaction limits.

Card payments

It’s more important than ever for businesses to accept card payments, in a world heading towards being cash-free.

Not all business bank accounts accept card payments, so check if the account offers card payment services that you’ll be able to access.

To learn about our card payment solutions, visit our Merchant Services page.

Business savings accounts

Look out for bank accounts that offer business savings accounts if you’re looking for somewhere to put spare pots of money. Your hard-earned cash can earn interest whilst you take care of growing your business.

 There are different types of savings account. Some savings accounts are instant access, so you can earn interest but still get to your money whenever you need it. Others might give you a higher interest rate but you have to give notice to the bank if you want to make a withdrawal.

Ethical stance

Most banks with an ethical stance will be transparent about what makes them different. If your business prides itself on being ethical or socially responsible, consider choosing an ethical business banking account that shares similar values.

Here at The Co-operative Bank, we pride ourselves in being driven by something different than our competitors. We take an ethical approach to banking which is founded in a customer-led Ethical Policy that has been over 25 years in the making, shaped by over 320,000 customer responses.

Forming a good relationship with your bank

Ultimately, having a good relationship with your bank is going to be one of the most important aspects of your business banking.

Aside from the typical services and features a bank can offer, many businesses look for a bank that they can turn to when they need help and support to expand and succeed.

A bank shouldn’t just be a place to keep your money, they should be with you throughout your business journey, offering expert guidance and support whenever you need it.

Should you ever face financial difficulty whilst running your business, it’s important to know that your bank can offer the support you need to give you that peace of mind.

If you are already a Co-operative Bank customer, you can find out about the support we offer on our Financial Difficulty page.

Ready to apply for a business bank account?

If you’re thinking about applying for a business bank account, or you’re ready to switch your existing one, take a look at our range of business current accounts.

Our Business Directplus account offers new customers 30 months of free everyday business banking, easing the pressure off businesses in their first two years of business*. Please check full terms and conditions and eligibility criteria to apply.

*Free 30 months everyday business banking for new customers maintaining a credit balance of £1000+. Monthly limits for cash and cheque transactions. Other charges may apply e.g. foreign and CHAPS payments. Applications are subject to status and eligibility. Terms and Conditions apply. The Co-operative Bank reserves the right to decline or accept any application.

Switch your Business Current Account

It’s easy to switch business bank accounts, just look out for the Current Account Switch Service. This means a switch from your old account to your new account within 7 working days only, with all your transactions and balances automatically transferred.

*While all reasonable care has been taken to ensure that the information provided is correct, no liability is accepted by The Co-operative Bank for any loss or damage caused to any person relying on any statement or omission. This is for information only and should not be relied upon as offering advice for any set of circumstances. This is merely a guide and each business is unique in its requirements. Specific advice should always be sought in each instance.