How to find the best online business bank account

A business account is an ideal way to ensure your business and personal finances are kept separate. With so many business online banking benefits, features and options, it can be difficult to decide which account is ideal. There are traditional high-street banks and a growing number of online banking providers available to businesses across the UK. To help you understand the options available, this guide will take you through the various online business bank accounts available.

Do I need to open a business bank account?

The first aspect you will need to decide, is whether you need to open a business account. If you are a business, it is almost always beneficial to open a business bank account. If you operate a limited company, it is a legal requirement to use a business bank account. This is because you and your business are separate legal entities, so legally your finances need to be kept apart.

If you are a sole trader, you are not legally required to open a business account. However, you may find that your personal bank account can only be used for your personal transactions. In these situations, if your bank realises the account is being used for business transactions, your account may be closed.

Although you may not legally be required to open a business account, you will appear more reputable and professional. This is because a business account will enable you to receive payments and pay in cheques using your business name.

What is an online business account?

When it comes to banking, there is a growing shift towards online business bank accounts. Although many high-street banks offer online banking, there are new banks which provide online only accounts. Business bank accounts are managed via the internet or using a mobile application. These types of business bank accounts offer many of the features provided by your traditional bricks and mortar banks. These online only accounts are often referred to as 'challenger banks' and 'mobile banks'.

What are the advantages of an online account?

We live in a digitally connected world, where everything seems to happen instantaneously. If you need quick access to a bank, an online business account could be the answer. Online banks boast a quick application times of just 5 minutes. Unlike traditional banks, there is no requirement to visit a branch to provide further details and documentation.

Once your account is open, an online business bank account will provide instant access to your finances. It is even possible through banks such as Tide and Revolut, to access a detailed analysis of your spending. Your balance, transactions and pending payments will be available at the touch of a button. Many of the online accounts will also provide mobile notifications, spending caps and useful financial management features.

Many of the online business accounts will integrate with accounting and invoicing software, such as Xero and FreeAgent. This means your transactions will sync automatically, so there is no requirement to manually enter information or upload statements.

Many of the online banks also specialise in international banking, through their borderless accounts. If you have clients outside the UK, there are banks such as Revolut, which will allow you to hold multiple currencies. Other benefits include fee-free foreign transactions and cash withdrawals.

Disadvantages of an internet only account

An online account may not suit every business, as some traditional features may not be available. For example, if you need a loan, credit card or an overdraft, you are likely to require a traditional bank account. It may also be difficult to pay into an online business bank account, as there are no convenient high-street branches. Although, many online banks provide this facility through the Post Office branch network.

Which is the best online business banking provider?

There are a variety of online only business bank accounts available, which each provide some great benefits. The best online business bank account will be the one which provides the exact features you require.

Free online bank accounts

If you are looking for a free online business bank account, Cashplus and Tide both provide completely free accounts. Although, many online banks also provide business accounts which are free for an introductory period. Examples include, Anna, CardOneMoney and Acorn, which also provide competitive monthly fees once the initial free period ends.

Online business bank account no credit check

If you are looking for an account which is available to those with poor credit, there are online banks available. For example, Cashplus, Tide, Anna, Countingup, CardOneMoney and Acorn do not perform a credit check.

Online small business banks

If you are looking for the best online bank account for small businesses, there are some excellent options available. Many of the online small business banks will provide features such as business support advice and UK call centres. A great example is the CardOneMoney Business Account, which is designed specifically for small businesses. There is an annual turnover limit of £2,000,000 with the account, but you benefit from a range of merchant services.

Compare online bank accounts

If you are searching for the best online business bank account UK wide, the first step is to compare options. When comparing online business bank accounts, there are a variety of aspects to consider including:

• The monthly fees you have to pay for the account
• Transactional fees, such as charges for paying cash in, using your debit card and processing payments
• The interest you could earn on your in-credit balance
• The ability to borrow through a loan, credit card or overdraft facility

Think about the way you prefer to bank and the features you will regularly use. Ask yourself, do you need to pay cash into your account regularly? Will you regularly need to process payments in other currencies? Or, will you be using your debit card often? Once you understand how you bank, it will be possible to narrow down the most suitable online business bank account options.

As with all bank accounts, it is important to ensure you open the best online business bank account for you. Although the high street banks are still a popular choice, there are many online only banks available. These online banks are becoming a popular alternative and we can help you compare the options.

We have developed a free, no-obligation bank account comparison tool, which provides an easy to compare list of accounts. Through our tool you can find the following online business bank accounts:

• The best accounts for start-up businesses
• The ideal accounts for contractors and freelancers
• Bank accounts with no credit check required
• The best online small business accounts
• Basic online business bank accounts

Simply select the options which you require, such as a quick application process or a long fee free period. You will then be provided with a list of the accounts which match your requirements. The list is conveniently laid out, with the key information, fees and eligibility requirements listed. Once you have compared the available options, we have provided a convenient link to the relevant website. From here you will be able to complete their quick application form.

What is the best business bank account for sole traders?

If you operate as a sole trader, there is no legal requirement to open a business account. Although, many banks will not allow you to use your personal bank for business use. If you open a business account there are many benefits, such as quick access to your finances and simplifying your tax returns.

A great example is Revolut, which provides either a basic free account or a paid subscription option. It is possible to open an account online in just 5 minutes, with benefits such as accounting software integration. If you have clients around the world, a Revolut account will allow you to hold 29 different currencies. In addition, multiple users can access the account and can even have their own prepaid employee bank card However, there is no overdraft facility and you will not earn interest on any in credit balances.

How to open a business bank account online

So, can you open a business bank account online? Yes, the process to set up a business bank account online is straightforward, as long as you meet the eligibility criteria. If you are planning on opening an online only bank account, the application can be completed entirely online. Whereas, a traditional bank will require you to visit a branch with a variety of documents.

It is possible to apply for a business bank account online in just 5 minutes. To speed up your business bank account online application, it is advisable to have the following information to hand:

• The names and addresses of all company directors and shareholders
• The full business address with postcode
• Contact details including a phone number and email address
• If you are a limited company or partnership, the Companies House registration number
• An estimate of the business’s annual turnover

If you are switching from another bank, many business account providers offer a switching guarantee. This means that your new account could be opened in as little as 7 days.

Compare accounts today and open the best online business account!

Here at BusinessComparison, we specialise in helping your business secure the best deals. We know how crucial it is to access financial comparison services, so that your business can save time and money. Our comparison tools will help you find the ideal options, so you are free to concentrate on the important aspects. A smart and cost-effective online business account will set you up for simple financial account management.

Whether you are looking for advice about traditional account options or alternative online banks, our team are here to help. To find out more about fees, features, switching or opening a first online bank account, contact us today.

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