Best business bank accounts for sole traders
Best business bank accounts for sole traders

Finding the right bank account for your business can be hard enough, never mind being a sole trader.  

You’ve got a lot of factors to consider: features, cost, free banking period (if there is one), overdrafts and integrations.

We’ll be looking some of the best business bank accounts on the market targeted specifically at sole traders.

Compare business bank accounts with NerdWallet

Traditional banks

High street banks do offer sole trader accounts and they tend to have a free banking period, which is a huge bonus if your business is new and you’re trying to cut costs. Take a look at the summary below.

Bank/Account Features Free banking period Account fee thereafter
HSBC Kinetic • Make payments of up to £25,000 per day in-app
• Automatically categorised transactions to help monitor spending
• Credit card and savings account (subject to eligibility and application)
• Insights that could help you manage your money better
12 months £6.50 a month
HSBC Small Business Banking Account • Loans from £1,000 to £25,000
• Overdraft
• Visa commercial card – no annual fee for the first year
• Access to secure digital banking including the ability to scan and deposit your cheques via the Business Banking Mobile app
• Syncs with Sage accounting software
• International payments for over 60 currencies
12 months £8 a month
TSB Business Plus Account • Free Square reader with no fees to pay on your first £1,000 of sales
• Three months’ free access to Revenu – and app that helps you request customer payments and settle invoices
• Business advice and support through Enterprise Nation and Funding Options.
25 months £6 a month
Co-op Bank Business Current Account • No additional cost to deposit cash at the Post Office
• Payment app, Incomeing, lets you automate your financial admin
• Tailored business cover with AXA
• Access to merchant services with Fiserv
30 months £10 a month
Metro Bank • Local Business Manager as a key point of contact, but all colleagues can support you with day-to-day banking
• Store opening 7 days a week, early and late
• 24/7 UK based Business Customer Service Team
• Transaction and service charges apply
N/A £6 a month

HSBC

HSBC has two options for sole traders and single directors of limited companies. 

Packages

HSBC Kinetic (Free for 12 months, £6.50 thereafter)

HSBC Kinetic is a mobile business banking app which is best for sole traders. You can apply in minutes through the app. Note that this will need a credit check.

This smartphone app-based business account is available for either Android or iPhone users.

  • Make payments of up to £25,000 per day in-app
  • Automatically categorised transactions to help monitor spending
  • Credit card and savings account (subject to eligibility and application)
  • Insights that could help you manage your money better

Small Business Banking Account (Free for first 12 months, £8 per month thereafter)

The HSBC Small Business Banking Account is a more traditional small business bank account from HSBC, aimed at sole traders and limited companies with turnover of up to £2m.

  • Loans from £1,000 to £25,000
  • Overdraft
  • Visa commercial card – no annual fee for the first year
  • Access to secure digital banking including the ability to scan and deposit your cheques via the Business Banking Mobile app
  • Syncs with Sage accounting software
  • International payments for over 60 currencies

TSB

TSB’s Business Plus account has 25 months of free business banking for sole traders, partners and directors. It doesn’t matter if you’re switching or are opening a brand-new bank account.

Package

Business Plus Account (25 months free, £6 thereafter)

  • Free Square reader with no fees to pay on your first £1,000 of sales
  • Three months’ free access to Revenu – and app that helps you request customer payments and settle invoices
  • Business advice and support through Enterprise Nation and Funding Options.

Co-op Bank

The Co-operative Bank offers the Business Current Account, which is ideal for sole traders who don’t often bank with cash or cheques.

Package

Business Current Account (Free for first 30 months, £10 a month thereafter)

  • No additional cost to deposit cash at the Post Office
  • Payment app, Incomeing, lets you automate your financial admin
  • Tailored business cover with AXA  
  • Access to merchant services with Fiserv

Barclays

Barclays start-up business account is the bank’s best offering for sole traders.

Package

Start-up Business Account (Free for 12 months, £8 or £8.50 a month thereafter)

  • Free invoicing and account software from FreshBooks, worth £228 a year
  • Expert advice from Barclays’ Business Direct team in the early months to help you grow
  • Mixed payment plan that is great for businesses that use cash, cheques or mixed methods to make and receive payments –this plan has a £8 monthly fee. There’s also e-payment for those that receive electronic payments and make payments through online banking and debit cards, which costs £8.50 a month

Metro Bank

Metro Bank has a simple Business Bank Account open to sole traders with under £2m turnover.

Package

Business Bank Account (£6 a month)

  • Local Business Manager as a key point of contact, but all colleagues can support you with day-to-day banking
  • Store opening 7 days a week, early and late
  • 24/7 UK based Business Customer Service Team
  • Transaction and service charges apply

Digital banking platforms

Newer players to the game have their own products which are generally quicker and easier to set up and are operated online.

Provider Packages
Tide Free (£0)
• Accounting integrations including QuickBooks, Xero, Quickbooks, Xero, Sage and more
• Multi-business – hold up to five accounts
• Read access for team members
Plus (£9.99 per month plus VAT)
All of the features of Free, and:
• One free expense card for your team
• Priority in-app support
Cashback (£49.99 per month plus VAT)
All of the features of Plus, and:
• 0.5 per cent cashback on your Tide card
• Dedicated team of account managers
Starling Bank Original free account (£0)
• Connect to Quickbooks, Xero or FreeAgent
• 24/7 UK support
• Free UK transfers
Business Toolkit (£7 per month including VAT)
Everything in the Original free account, and:
• Invoices and auto-matching
• HMRC Tax estimation (for sole traders only)
• Making Tax Digital VAT submission
ANNA Money Pay as you go (£0 per month)
• Free card in any country and currency
• 0.5 per cent currency conversion fee
• 20p per local transfer in and out of your account
Business (£14.90 per month plus VAT)
• Three free withdrawals per month, then £1 per withdrawal
• Up to five additional debit cards included, then £3 per card per month
Coconut Monthly plan (£7.50 a month including VAT)
• 30-day free trial
• Sole traders can add their personal account on to their business bank account to separate into personal and business finances
• Connect current accounts and credit cards from 25+ different banks including Barclays, Lloyds and Starling
• Notifications when payment has been made or received, automatic categorisation
• See calculations of how much tax you’ll owe and tips on what expenses you can claim
Revolut Free (£0 a month)
• Five free local payments
• Free transfers to Revolut accounts
• Local accounts in GBP and EUR
Professional (£7 a month)
Everything in Free package, and:
• Five free international payments
• 20 free local payments
Unlimited (£25 a month)
Everything in Professional, and:
• Ten free international payments
• 100 free local payments
Monzo Lite (£0)
• Integration with Xero, FreeAgent and QuickBooks
• Instant notifications
Pro (£5 per month)
Everything in Lite, and:
• New Xero users can get six months of the cloud accounting platform free
• Tax Pots – set aside a percentage of your earnings to put towards tax every time you’re paid
Amaiz £4.99 (+ VAT)
• Deposit of at least each 35-day period before an account charge
• Live support during business hours
• Receipt capture and invoice storage
£9.99 (+ VAT)
Everything in the £4.99 package, and:
• Any deposit level
Mettle Mettle (£0)
• Create and send invoices with company logo directly from your smartphone
• Manage recurring payments in-app
• Add receipts to transactions
• Export expense data
• Sync account with FreeAgent, Xero or QuickBooks

Tide

With Tide, you’ve got three different account options geared at sole traders and freelancers that can scale with your business.

Packages

Free (£0)

  • Accounting integrations including QuickBooks, Xero, Quickbooks, Xero, Sage and more
  • Multi-business – hold up to five accounts
  • Read access for team members

Plus (£9.99 per month plus VAT)

All of the features of Free, and:

  • One free expense card for your team
  • Priority in-app support

Cashback (£49.99 per month plus VAT)
All of the features of Plus, and:

  • 0.5 per cent cashback on your Tide card
  • Dedicated team of account managers

Starling Bank

The Starling Bank business account is open to you if you’re a sole trader or the owner of a limited company, a limited liability partnership or if you’re part of a limited company with multiple owners.

There’s no monthly charge on the account and it comes with an overdraft. To boost your business’ functionality, you can opt for the Business Toolkit for £7 a month.

Packages

Original free account (£0)

  • Connect to Quickbooks, Xero or FreeAgent
  • 24/7 UK support
  • Free UK transfers

Business Toolkit (£7 per month including VAT)

Everything in the Original free account, and:

  • Invoices and auto-matching
  • HMRC Tax estimation (for sole traders only)
  • Making Tax Digital VAT submission

ANNA Money

ANNA Money is open to any UK resident who is a sole trader.

It takes three minutes to set up and you’ll get a personal webpage with a link to put on your online profiles or to send to someone directly. You can also give your employees their own debit card with a spending limit and it’ll sort out their expenses automatically. It also has a receipt capture feature that ANNA automatically categorises and stores digitally.

You can set up free direct debits as well as scheduled and recurring payments.

There are two packages which are more suitable for sole traders, particularly those in the early stages. A Big Business package is also available at £49.99 a month + VAT with unlimited local transfers and ATM withdrawals. See full prices here.

Packages

Pay as you go (£0 per month)

  • Free card in any country and currency
  • 0.5 per cent currency conversion fee
  • 20p per local transfer in and out of your account

Business (£14.90 per month plus VAT)

  • Three free withdrawals per month, then £1 per withdrawal
  • Up to five additional debit cards included, then £3 per card per month

Coconut

Coconut is geared specifically at sole traders but is open to limited companies with up to two directors too. It has the functionality to handle banking, bookkeeping, invoicing and tax. Sole traders can an extra help up with tax reports to help them with their self-assessment.

Package

Monthly plan (£7.50 including VAT)

  • 30-day free trial
  • Sole traders can add their personal account on to their business bank account to separate into personal and business finances
  • Connect current accounts and credit cards from 25+ different banks including Barclays, Lloyds and Starling
  • Notifications when payment has been made or received, automatic categorisation
  • See calculations of how much tax you’ll owe and tips on what expenses you can claim

Revolut

Revolut is a good shout for business owners who travel and trade overseas. Customers can hold, exchange and transfer 30 currencies with the real exchange rate.

You can issue physical and virtual cards and track your employees spending in real time. Integrations including Zapier and Slack. Accounting software like Xero, Sage, FreeAgent, QuickBooks and FreshBooks.

Revolut comes with perks and benefits from partners such as Monday.com and Zipcar for Business.

Packages

In terms of accounts you’ve got:

Free (£0 a month)

  • Five free local payments
  • Free transfers to Revolut accounts
  • Local accounts in GBP and EUR

Professional (£7 a month)

Everything in Free package, and:

  • Five free international payments
  • 20 free local payments

Unlimited (£25 a month)

Everything in Professional, and:

  • Ten free international payments
  • 100 free local payments

Monzo

Monzo has a couple of low-cost options depending on your business needs.

Accounts aren’t available to some types of businesses but this may be reviewed in future.

Packages

Lite (£0)

  • Integration with Xero, FreeAgent and QuickBooks
  • Instant notifications

Pro (£5 per month)

Everything in Lite, and:

  • New Xero users can get six months of the cloud accounting platform free
  • Tax Pots – set aside a percentage of your earnings to put towards tax every time you’re paid

Amaiz

With Amaiz, you can instantly store receipts using your phone camera. The more advanced plan gives you access to ACCA-certified accountants and a Jar account to set money aside.

Packages

£4.99 (+ VAT)

  • Deposit of at least each 35-day period before an account charge
  • Live support during business hours
  • Receipt capture and invoice storage

£9.99 (+ VAT)

Everything in the £4.99 package, and:

Mettle

Mettle is part of NatWest but is an independent arm. You’ll be eligible if you’re a sole trader, though you must have a balance of less than £50,000 to apply.

It goes half-way there in terms of chasing overdue invoices. It’ll remind you that an invoice is overdue, but you’ll have to send the client a follow-up yourself.

A key consideration you must make is that the app isn’t covered by the Financial Services Compensation Scheme (FSCS). However, the account is covered under the FCA safeguarding requirements and the corresponding regulations. The purpose of safeguarding is to protect and return customer money if the company fails.

Mettle is free to use and free to join.

Package

Mettle (£0)

  • Create and send invoices with company logo directly from your smartphone
  • Manage recurring payments in-app
  • Add receipts to transactions
  • Export expense data
  • Sync account with FreeAgent, Xero or QuickBooks

Can I use a personal account as a sole trader?

In some cases you can, but it is helpful to have a business bank account for a number of reasons. It’ll be easier to split your business and personal expenses, for starters.

Business bank accounts have greater functionality such as cashing cheques into your account and it’s easier to manage expenses and do your tax return.

A business bank account will build a credit rating for your business so that you can access loans and other financing that you may need later down the line.

Bear in mind as well that some banks simply won’t let you have a personal account for your banking, even if you’re a sole trader. They might even close your account if they cotton on that you’re using your personal account for your business.

The best part? Business bank accounts often offer handy freebies like free accounting software or a free 12 months of banking, for example.

More on being a sole trader

Employing people as a sole trader

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