Tips On Choosing A Business Bank Account

[Scottish Business Owner]

Choosing your business bank account is actually very important. No matter what type of business structure you have whether it be sole trader or limited company it's probably advisable for you to have a seperate business account purely for business expenditure.

Some Busines Banking Tips

• Get a recommendation - Talk to other colleagues and friends in business. Find out which bank they are using and if they are happy with it. Obviously if they're not happy then avoid them!!
• Research - You can do alot of work on what the banks offer on the internet. You have to decide what's important for you. Is it a good interest rate, low fees and charges or is the personal touch important?
• Internet Banking - It's actually quite important and it will save you alot of hassle phoning the bank to check on payments etc so make sure that whatever bank you decide to go with offers internet banking as standard.

Business Banking Options
Below we have given a summary of the main banking options in Scotland and also included links to their respective websites.Typically what we have featured below is new start business accounts for businesses who the banks classify as less than £1million turnover.

The features we have mentioned were correct at the time we wrote this post so please do check each site as they may have changed.

Lloyds TSB Bank - Up to 18 months free business banking, your own relationship manager and exclusive Sage software.

Bank of Scotland - 12 months free business banking, no overdraft arrangement fees for 12 months and a Relationship Manager.

Royal Bank of Scotland - 2 years free business banking and up to £850 of free start-up benefits.

Clydesdale Bank - 2 years free business banking, for start-ups (18 months for established small business switching accounts.

Santander (Formerly Abbey National and also includes Alliance & Leicester) - Free day-to-day banking forever. Predominantly internet and telephone based.

HSBC - 18 months free banking for start-ups (6 month free if switching an exisiting small business account).

Barclays - Free business banking for 12 months. Lots of additional services including Credit Focus.

Have we missed anything? Let us know in the thread below and we'll do our best to keep things as up to date as possible

 

[MrsDev]

Lloyds TSB Bank has now split into Lloyds Bank and TSB. I had a personal account with Lloyds TSB before they split, but decided to open up a business starter account with TSB as the Lloyds Bank branches seemed to of dramatically reduced (making my nearest branch over 12 miles away).

From what I can see they offer identical free starter business accounts.

Does anyone know once my 18 months of free banking are up, can I switch say to another bank which are offering free banking or a new business join deal?

 

[saltire]

It's unlikely you'll get the same deal as you're no longer a start-up business

Most of what the banks offer in my opinion are much of a muchness - There isn't really anything much different.

One thing I have came across recently is a product called Credit Focus which is offered through Barclays. Essentially a credit checking system at a very reduced cost.

I'm actually checking it out just now to see how good it is. I'll let you all know what I find out!

 

[MrsDev]

I haven't really researched other banks as I just went for my existing bank. But you know with personal deals you can get cash back and deals for switching etc.

Do they not regularly offer businesses incentives to witch over? Whether your a start up or not, you'd think they would seeing as you'd be bringing in money.

I'm not sure how much the fees would effect me as I take a lot of money through PayPal.

 

[MrsDev]

The credit checking system you've mentioned is something I'd be interested in. I'm wanting to introduce new products and courses which are of a higher cost, but allow users to pay monthly. So I'd run a credit check to make sure they are suitable and I suppose I would also need direct debit facilities.

 

[Gemma Rowlands]

Thanks for this post, it contains some great information. It's absolutely vital to research bank accounts before setting one up, because there are so many offering you different things, and you might find that one is much more suited to your business than another. Too many people have bank accounts that don't really offer them anything of true value, and it's a shame because there could be something out there that could really add something to your business! So do your homework before choosing your business account (and your personal account, too, actually).

 

[Robert Frost]

This was very informative, I didnt know I could have a different bank for my business to personal.!

 

[Scottish Business Owner]

This was very informative, I didnt know I could have a different bank for my business to personal.!

Hi Robert,

It's not only possible - I would suggest it's necessary no matter what the structure of business (be it limited company or sole trader) to have a seperate bank account. You need to be able to seperate business expenses and personal and it's not a good idea for them to be one and the same.

 

[Gemma Rowlands]

This was very informative, I didnt know I could have a different bank for my business to personal.!

Yes, definitely! As has been said, things can get seriously complicated if you don't separate your finances - unless you want to sit analysing each and every bank statement of course.

 

[Branded Merchandise]

I used Bank of Scotland and they're decent.

The other thing to note is, if you have foreign customers/suppliers, to make sure you get a grasp of all the charges before you decide on which account is best for you.

 

[Gemma Rowlands]

I used Bank of Scotland and they're decent.

The other thing to note is, if you have foreign customers/suppliers, to make sure you get a grasp of all the charges before you decide on which account is best for you.

As a freelance writer (amongst other things) who works a lot online, foreign clients (and therefore foreign payment) is something that has tripped me up a few times, so I agree with this.

Another tip - make sure you know what your exchange rates are! A sometimes very attractive number may work out to be worth pennies and leave you working for 6p a day for two weeks (I am admitting that this happened to me in the early days because I didn't read a contract properly, oops).

 

[Branded Merchandise]

That can't have been very fun!

 

[Gemma Rowlands]

That can't have been very fun!

You're not kidding! And it was work that took a lot of effort & brain power.. all the while wondering why I was doing it when it was costing me more to power my laptop, ha ha. You live and learn, though!

 

[MarkB]

When looking for a business bank account you should expect monthly management charges after the initial free period.

 

[selinda]

Literally just posted this on another thread...
But I've joined Tide Bank after doing quite a bit of research and they have been spot on (so far).

They currently have an offer which gives you FREE Ltd Company formation, FREE £75 Cash credited to your account and FREE transfers for one year if you use referral code: FREE75 when you join up.
A word of warning though - if your business still accepts or sends cheques then Tide is not for you ... as they don't do cheques!

Anyway the offer is a good one and was enough on balance to pick them over the others. It also helped that they claim to - and were able to get my totally setup in under 10 mins! Barclays wanted to me to go in and see them... What's that all about?

Anyway +1 for Tide. Just use the code FREE75 during the signup process to get the free cash ;-)
You can thank me later!

Oh just in case you want the full T&Cs for the offer ... Here you go

TIDE FREE75 OFFER

 

[Business Upside]

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[Deniel0]

Yes, you should open a business bank account when you start a business. As your business grows, it is important to have a business bank account that can also protect your business and yourself. It lets you keep track of business expenses, make tax reporting easier, and deposit money in your company's name.

 

[ScottyD]

Literally just posted this on another thread...
But I've joined Tide Bank after doing quite a bit of research and they have been spot on (so far).

They currently have an offer which gives you FREE Ltd Company formation, FREE £75 Cash credited to your account and FREE transfers for one year if you use referral code: FREE75 when you join up.
A word of warning though - if your business still accepts or sends cheques then Tide is not for you ... as they don't do cheques!

Yep, I second Tide. What I was super impressed with was I needed a bank account, I Googled and found them and I am not lying when I say I was up and running with a bank account in 15 minutes! I did have to provide some documentation which I had to hand but it was that easy. I thought I'd stick with them for a few weeks before I moved to a "proper" bank but I have now been with them about 4 months and I'm not sure I need to change. There are a few issues:

• They don't (currently) offer a credit card. This can be a pain when dealing with certain subscription services where they insist you use a credit card to pay. I did get around that for a few services by linking my Tide debit card to Paypal and then paying with Paypal. However, that doesn't always work so I now have to refund my personal credit card from time to time when a charge comes through.
• They don't accept cheques as mentioned. But that's not a big deal for most people nowadays.
• They are not a full on bank, and people get concerned when paying a "no name" bank that they've not heard of before.
• I've not had to ask for any support yet but it's all online. That's not necessarily an issue (I personally bank with HSBC which I find quite painful when I need support),but there are no branches you can visit.

All in all, I am very happy with the experience.

 

[Business Upside]

If you conducted a poll among new mothers, you’d likely find that the vast majority, if given a choice, would prefer to stay home to raise their children. The harsh reality for most families is that eventually, mom will need to return to work.

 

[mitchellwilliam912]

Selecting a business bank account demands careful consideration of several factors, including fees, account features, customer service, and convenience. When faced with this decision, my approach involved thorough research of various banks, a comparative analysis of their offerings, and an evaluation of their reputation. It was through this process that I stumbled upon Netspend reviews, ultimately aiding me in making an informed choice.