Free business bank accounts UK: which are really free?

Which are really free?

“Free” on a business account usually means no monthly fee. That is a good start, but it is only one of five costs. The other four are what you pay per transaction, what you pay to deposit cash, what foreign currency costs you, and what you pay to take card payments from customers. A free account can cost more than a paid one if it charges heavily for the thing your business does most.

On the measure most people mean, no monthly fee and no charge for everyday UK transfers, with no expiry date, the accounts that qualify in October 2026 are:

• Monzo Business Lite
• Starling Business and Sole Trader accounts
• Mettle
• HSBC UK Small Business Banking

Tide Free and ANNA Free have no monthly fee but ration or charge for some activity. NatWest’s start-up account is free for two years, and Barclays, Lloyds and Santander are free for twelve months.

The free accounts, one by one

Monzo Business Lite

Lite is free. UK transfers are free, there is no fee on card spending abroad, and cash withdrawals are free in the UK and EEA. It includes Tap to Pay, payment links, savings pots and, for sole traders and landlords, free Making Tax Digital for Income Tax software, built on Sage. Tax Pots, invoicing and accounting sync need Pro (£9 a month). It is a bank, so deposits are FSCS-protected up to £120,000. The full fee list is on Monzo Business fees.

Starling

Starling charges £0 a month with free UK transfers, free invoicing and no Starling fee on card spending abroad. Cash costs 0.7% (minimum £3) at the Post Office. Accounting Plus is an optional upgrade. For many businesses this is the most generous free account available, and it accepts LLPs, which Monzo does not.

Mettle

Mettle costs £0 a month, and its accounting perk is unusual for a free account: FreeAgent included (needs one transaction a month). Cash deposits cost £2.75 per deposit, it does not offer an overdraft, and it cannot yet send international payments.

HSBC Small Business Banking

HSBC’s Small Business Banking account has a £0 monthly fee, free UK payments through digital banking and branch access. It is the only big high-street account here without a time limit on the free monthly fee. Cash costs £1.50 per credit plus 1.5% of value (branch or Post Office), and card spending abroad costs 2.75%.

Tide Free

Tide’s Free plan has no monthly fee, but transfers are limited to 5 a month on Free, then 20p each, card spending abroad costs 2.75% on Free; 0% on paid plans, and invoicing is capped at 3 invoices a month (unlimited on Max). For a business making a handful of payments a month, it costs nothing. For a busier one, the per-transfer charge adds up, and Tide’s answer is a paid plan.

ANNA Free

ANNA’s Free plan has no monthly fee and unlimited outgoing transfers. The catch is on money coming in: first £1,000 incoming a month free, then 0.95%. No monthly fee in any month you do not use the account. The main account is e-money, so balances are safeguarded rather than FSCS-protected. It suits a very low-volume business that wants ANNA’s admin help.

Free accounts compared

Figures are for each provider’s entry plan and come from its own pages, listed in the sources below. The business bank account cost calculator turns them into an annual cost for your own transaction pattern.

The costs that still apply

Cash deposits

No app-based account pays in cash for free, because cash costs them money to handle through the Post Office or PayPoint. Monzo charges £1 per deposit, with monthly limits, for example £3,000 a month (sole traders). Starling and Tide charge a percentage, and most high-street banks charge per £100 deposited. If you bank cash every week, this is likely to be your largest banking cost, and it is worth reading our page on Monzo Business cash deposits and the tradespeople page before choosing.

Foreign exchange

There are three separate costs here: spending on the card abroad, sending money abroad and receiving foreign currency. Monzo charges no fee on card spending abroad, but for receiving there is a 1% conversion fee on incoming euros and other currencies, capped at £1,000. Sending abroad costs under £0.80 for most currencies, up to £11 in some cases, with a margin in the exchange rate (from 1 November 2026). The high-street banks typically charge a percentage on card spending abroad and a fixed fee per international payment. If you deal in other currencies often, the freelancer page covers multi-currency alternatives.

Taking card payments

Accepting cards is never free, because card schemes charge for every transaction. On Monzo, Tap to Pay costs £0.20 + 1.4% for UK and European cards, and online card payments cost £0.20 + 1.5% for standard UK cards on invoices and payment links; both are Stripe’s fees. Bank transfer payments through Monzo are free. Compare these rates with your existing card reader before you switch.

Features you will eventually want

The other cost of a free plan is what it leaves out. On Monzo, Tax Pots, invoicing and accounting sync are on Pro. On Tide, more free transfers and invoices come with paid plans. Our page on whether Monzo Business Pro is worth it works through when an upgrade pays for itself.

Free for now: the high-street offers

Several big banks offer new businesses a fee-free period. They are worth having, but they end:

• NatWest Start-up: 2 years' free everyday banking (start-ups and full switchers). After that, £0.35 per automated payment.
• Barclays: £0 for 12 months, then £8.50.
• Lloyds: £0 for 12 months, then £10.
• Santander Classic: £9.99 (first 12 months free for start-ups and switchers).

Put the end date in your calendar. Switching with the Current Account Switch Service is free. Our startups page compares these offers in more detail.

When paying makes sense

A paid plan is worth it when it replaces something you would otherwise pay for or do by hand. Pro’s Tax Pots move tax money automatically, its invoicing replaces a separate invoicing tool, and its accounting sync saves bookkeeping time. Savings pay up to 3.25% AER (variable), but the rate depends on your plan and Monzo’s pages disagree, so check the app.

The referral works on Lite, so you can get £50 without paying a monthly fee. It is only for people who have never opened a Monzo account before, and all four steps must be done within 30 days.