Choosing a business current account: what really matters

What should a business current account do?

Think of the current account as your trading business’s payment centre. Customers pay into it; suppliers, wages, rent and tax payments go out. Typical features include a debit card, transfers, Direct Debits, standing orders and downloadable statements. Cash deposits, foreign-currency balances and employee access are less universal.

A current account is not the same as a savings account or a loan. Some pay interest and some offer an overdraft, but neither should be assumed. Opening an account does not guarantee access to credit. The right starting question is which payments you need to make reliably, rather than which provider has the longest feature list.

Does your business need its own account?

For a limited company, the company is a separate legal person. Its income is not automatically the director’s money, and a company account in the correct legal name makes that distinction practical. Directors remain responsible for accounting records even when an accountant or bookkeeper handles administration. Record money introduced, salaries, dividends and director transactions correctly.

A sole trader is not separate from the individual who runs the business. A dedicated account can still make tax records and cash-flow management much easier, but do not mistake good practice for a universal statutory rule requiring a product called a business account. Your personal bank may prohibit business use in its terms. Partnerships and LLPs should confirm the ownership and signatory arrangements their provider accepts.

Sources:GOV.UK, Running a limited company: directors’ responsibilitiesGOV.UK, Taking money out of a limited companyGOV.UK, What a sole trader is: personal liability and record keeping

Compare the cost of your actual banking activity

Build a typical month from recent statements or a realistic start-up forecast. Count incoming and outgoing transfers, cash paid in, cash withdrawals and international payments. Add the subscription, per-transaction charges, card costs, cash-handling charges and any foreign-exchange margin. Check minimum charges and what happens when included allowances run out.

For illustration only, an account costing £8 a month with the transactions you need included would cost £96 a year. An account with no monthly fee but 60 chargeable payments each month at 20p would cost £144 a year. These are invented tariffs, not current offers. They show why the cheapest subscription does not always mean the lowest operating cost.

Match the account to how your business operates

A retailer depositing cash needs different facilities from a consultant receiving a few bank transfers. Check branch or cash-deposit access, payment limits and support availability at the times you trade. A useful app is not a substitute for a payment limit that accommodates payroll or a supplier invoice.

For a team, look at permission levels, approval controls and the audit trail. Check whether accounting integrations are included, whether you can export complete statements and who can remove access when an employee leaves. Confirm the practical process for changing directors or signatories. An account that saves a small fee can be expensive if it creates repeated manual reconciliation.

• Can the account receive the payment types and currencies your customers use?
• Can two people approve large payments where your controls require this?
• How do you contact support if an important payment is held for checks?
• Can you retrieve records after closing the account or changing plans?

Understand bank deposits, e-money and safeguarding

An account with a sort code and debit card is not automatically a bank account. Find the legal firm behind the brand and check its permissions on the FCA’s register. A bank deposit and money held by an electronic money institution can have different protections even when the apps look similar.

The FCA explains that money with a non-bank payment provider is not protected by FSCS if that provider fails. Authorised payment institutions and electronic money institutions must safeguard relevant customer funds, but recovery may take time and may not return the full balance after insolvency costs. Small payment institutions do not have to safeguard. Read the particular provider’s explanation rather than assuming all regulated firms have identical protection.

Sources:Financial Conduct Authority, Using payment service providers: safeguarding and protection

Check which balances share an FSCS protection limit

From 1 December 2025, the standard FSCS deposit limit is £120,000 per eligible depositor, per UK-authorised bank, building society or credit union. Accounts at brands sharing a banking licence are normally counted together. The limit is not a fresh allowance for every account or every brand.

An eligible limited company or LLP can have protection separately from its owner’s personal deposits. For a sole trader, personal and business balances with the same authorised firm are aggregated. If you also keep business savings there, include those balances in the calculation. Eligibility matters, so check the provider’s deposit information and the FSCS guidance before deciding how much to hold.

Read next:How business savings access and protection work

Sources:Financial Services Compensation Scheme, Deposit protection limit and shared banking licencesFinancial Services Compensation Scheme, Protection for small businesses, limited companies and sole traders

Prepare for the account-opening checks

Providers must understand who owns and controls the business and what it does. Have identification and address evidence ready, along with the business’s legal name, trading address, company number where applicable, ownership details and an explanation of expected activity. They may ask about customers, overseas payments and the source of money used to start the business.

Requirements and processing times vary. An advertised quick application is not a promise that checks will finish instantly. Confirm whether the account is fully operational before publishing new payment details. If you request an overdraft, ask separately about lending eligibility and whether a credit search will be recorded.

Sources:Current Account Switch Service, The business current account switching process

Switch without disrupting payments

Eligible businesses switching between participating providers can use the Current Account Switch Service. The service works to an agreed switch date and requires seven working days. Check that your business and both accounts qualify; opening a new account and making a manual transfer is not the same as using the service.

Confirm the treatment of any overdraft, card subscriptions, payment-processor settlements and linked services before the switch. Save statements and records, check balances and review the first payroll and supplier run afterwards. The switching guarantee covers errors within the service’s terms, not every unrelated payment problem or a new lender’s refusal to offer an overdraft.

Sources:Current Account Switch Service, The business current account switching process

A practical shortlist before you apply

Shortlist accounts that accept your business structure first. Then compare their annual cost under the same transaction assumptions, including the standard tariff after introductory offers. Read the account restrictions, complaints process and protection information before considering add-ons.

Keep a brief record of why the account fits: payment facilities, limits, access, controls and total cost. Review it when your business changes. Taking on employees, receiving more cash or trading abroad can make a previously suitable account less competitive without anything changing in the headline monthly price.

Read next:Budget for borrowing as well as banking fees