Business bank accounts

A business bank account costs a monthly fee plus charges for payments, cash and borrowing, and the cheapest tariff depends on how your business uses the account. Eligible deposits are protected up to £120,000 per banking licence at November 2026. A business with turnover up to £6.5 million and fewer than 50 employees can move its account through the Current Account Switch Service.

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What a business account costs

A business account tariff is built from a handful of charges. There is a monthly account fee, which some banks waive for an opening period. There are transaction charges: for each electronic payment in or out, each direct debit, each cheque paid in, and for cash, charged per deposit or per £100 paid in at a branch or the Post Office. There are charges for international payments and for spending on the card abroad. And there is borrowing: an overdraft arrangement fee, interest on what you use, and a charge when a payment is returned unpaid.

Each bank weights these charges differently, so the account with the lowest monthly fee may not be the cheapest for you. A café that pays in several thousand pounds of cash a week pays mainly for cash handling. An online shop with hundreds of card settlements a month pays for incoming payments. A consultancy that sends 20 invoices a month and takes no cash pays little beyond the account fee.

A tariff comparison only means something when it is run against your own transactions. An open banking review counts each type of payment over the past year and prices that pattern on each tariff, so the figure you compare is what your business would have paid. That is the basis of the bank account check on Swoop's platform, described on the business savings hub.

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Interest on money the business does not need yet

Check whether your current account pays any interest on credit balances. If it does not, cash set aside for a VAT quarter, a corporation tax bill or a planned purchase can sit in a business savings account and earn interest until the bill falls due.

Business savings come in three forms. An easy access account lets you withdraw at any time. A notice account pays interest in return for a set period of notice before you withdraw. A fixed-term deposit holds the money until a set date. Match the term to the date the money is needed: a corporation tax bill nine months after the year end can sit on a longer term than a VAT payment due next month.

Interest a company earns forms part of its taxable profit for corporation tax. Savings accounts cannot be moved through the Current Account Switch Service; you open the new account and transfer the money yourself.

Bank or e-money account

Account at a bank or building societyAccount at an e-money institution
How the firm is authorisedDeposit-taker authorised by the Prudential Regulation Authority and regulated by the FCA and the PRAElectronic money institution authorised by the FCA
What protects your balanceThe Financial Services Compensation Scheme, up to £120,000 per eligible depositor per banking licenceSafeguarding: the firm must keep customer money separate from its own. The compensation scheme does not cover it
Interest on the balanceCan be paidNot allowed on e-money under regulation 45 of the Electronic Money Regulations 2011
Complaints for eligible small businessesFinancial Ombudsman ServiceFinancial Ombudsman Service

The FCA register shows whether a firm is a bank, an e-money institution or a payment institution. International payments for business explains how safeguarding works when a firm fails.

How far deposit protection goes

Illustrative example

The Financial Services Compensation Scheme protects eligible deposits up to £120,000 per depositor per banking licence, for banks that fail on or after 1 December 2025. The limit was £85,000 before that. A limited company or LLP is a depositor in its own right. A sole trader has one £120,000 limit across personal and business accounts at the same bank, and a partnership's joint account carries a single claim shared by the partners. Banks in one group that share a licence count as one bank. With assumed figures:

Company cash held at one bank
£150,000
Protected at that bank
£120,000
Exposed if that bank failed
£30,000
Same cash split, Bank A (own licence)
£100,000
Bank B (separate licence)
£50,000
Exposed after the split
£0

At an assumed interest rate of 3% a year, £150,000 earns £4,500 a year before corporation tax. Set that against the fees on the account that holds it.

Switching through the Current Account Switch Service

  1. 1

    Check you qualify

    The service covers businesses with annual turnover not over £6.5 million and fewer than 50 employees, and small trusts with net assets under £6.5 million. Your old bank and the new one must both take part.

  2. 2

    Open the new account

    The new bank runs its identity checks first. Have the company number, trading address and the directors' identity documents ready. If you are overdrawn, agree an overdraft with the new bank or arrange to clear the old one.

  3. 3

    Agree a switch date

    Allow seven working days and choose a weekday that is not a bank holiday. Set up any new payments on the new account during those seven days. You sign a switch agreement and an instruction to close the old account.

  4. 4

    Switch day

    The balance, direct debits, standing orders and saved payees move across and the old account closes. Payments sent to the old details are redirected, and the sender is told the new details.

Under the Current Account Switch Guarantee, the new bank refunds any charges or interest on either account caused by a failure in the switch.

What to compare besides price

If you keep the old account open

Partial moves sit outside the guarantee

The switching service closes the old account as part of the switch. To keep it open you have to move each payment yourself, and the Current Account Switch Guarantee does not cover that move.

Questions people ask

How much of my business's money is protected if a bank fails?

Eligible deposits are protected by the Financial Services Compensation Scheme up to £120,000 per depositor per banking licence, for failures on or after 1 December 2025. A limited company or LLP has its own limit. A sole trader's personal and business accounts at the same bank share one limit. A partnership's joint account carries one claim. Banks that share a licence count as one bank, so check the licence before you spread cash across brands.

Can I switch my business bank account without losing direct debits?

Yes, if your business qualifies for the Current Account Switch Service: turnover not over £6.5 million and fewer than 50 employees, with both banks taking part. The new bank moves the balance, direct debits, standing orders and saved payees on the date you agree, which must be at least seven working days ahead. Payments sent to the old account are redirected, and the guarantee refunds charges caused by a failure in the switch.

Do business bank accounts pay interest?

Some business current accounts pay interest on credit balances and some pay none, so check the tariff. Business savings accounts pay interest in three forms: easy access, notice and fixed term. E-money accounts cannot pay interest on e-money under the Electronic Money Regulations 2011. Interest a company earns is taxable profit for corporation tax.

Do I need a separate bank account for my limited company?

A limited company is a separate legal person, so its money belongs to the company and should be held in an account in the company's name. The Companies Act 2006 requires a company to keep accounting records that show and explain its transactions, which is far harder when company and personal payments share an account. Money the company pays to a director has to be recorded for what it is, such as salary, a dividend or a director's loan.

Is an e-money account as safe as a bank account?

The protection works differently. A bank deposit is covered by the Financial Services Compensation Scheme up to £120,000. An e-money institution must safeguard customer money by keeping it separate from its own, but the compensation scheme does not cover it. The FCA says that if such a firm fails, getting the money back may take time and may not return the full amount, because the administrator's costs can be taken from it.

Finance is subject to status and to the lender’s terms. A personal guarantee makes you liable for the company’s debt if it does not repay, and it can be enforced against your own assets, including your home. Nothing here is a personal recommendation.

Business savings

Business savings

Where a business's running costs go, and how a savings check compares them with other providers.

Read more →

Business credit cards

Who owes the balance on a company card, where section 75 stops, and what carrying a balance costs.

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International payments for business

Transfer fees, the exchange rate margin, forward contracts and how a payment firm protects your money.

Read more →

Business overdraft

A limit on your business current account, reviewed each year and repayable on demand.

Read more →
All business funding

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Funding searches run on Swoop’s platform. Swoop Finance Limited is a credit broker and not a lender, and is authorised and regulated by the Financial Conduct Authority (FRN 936513). Buzz Accounting Ltd introduces businesses to Swoop and may receive a fee from Swoop when funding is arranged. Business funding is separate from the financial advice Equity & General Financial Services Limited gives through this website. Finance is subject to status, and a lender may ask a director for a personal guarantee.

Cover for a personal guarantee

If a lender asks you to guarantee the company’s borrowing, our advisers can advise on life cover for that debt.

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