Best business bank account for startups and new companies

The short answer

A new business needs three things from its first bank account: to be accepted quickly, to cost little while there is not much money coming in, and to make good habits easy from the start. App-based banks win on the first two. High-street banks compete with free periods, then charge monthly fees once they end.

Our pick for most startups is Monzo Business, because Lite is free indefinitely, most accounts open the same day, and you can move up to Pro for Tax Pots and invoicing when the business needs them; there is no minimum term; downgrades refunded pro rata. Starling is an equally strong free choice. NatWest is the high-street account we would look at first.

Which accounts accept you on day one

A brand-new business has no accounts, no turnover and often no customers yet. That is normal, and it does not stop you opening a current account. What every provider needs is proof that the business and the people behind it are real.

If you are a limited company, you can apply once Companies House has registered the company. GOV.UK’s guide to setting up a private limited company covers the registration itself. Monzo requires the company to be active (not dormant) at Companies House, with an active director, and checks the register during the application.

If you are a sole trader, there is nothing to register at Companies House. You tell HMRC you are self-employed through Self Assessment; GOV.UK’s Self Assessment registration page sets the deadline as 5 October after the end of the tax year in which you started. Most app-based providers let you open an account before then.

How fast accounts open, according to the providers’ own pages:

Monzo’s own pages give two different same-day figures, which is why we say “most”. NatWest’s figure is how long the application takes, not how long approval takes. The documents you will need are listed in our guide to what documents you need to open a business bank account.

Free periods at the big banks

The high-street banks compete for new businesses with time-limited free banking. These are the offers we could confirm on the banks’ own pages in October 2026:

• NatWest Start-up Business Account: 2 years' free everyday banking (start-ups and full switchers), for businesses trading under a year with turnover under £1 million. After that, everyday transactions are charged per item, for example £0.35 per automated payment. It also includes FreeAgent free while you keep the account.
• Barclays Business Account: £0 for 12 months, then £8.50. Businesses that already have a Barclays business current account do not get the free year.
• Lloyds Business Account: £0 for 12 months, then £10, for first-time Lloyds business customers. Lloyds also has a new-customer offer (£200 for opening online by 15 October 2026), with spending and Direct Debit conditions; if you are reading this before that date, it is worth checking.
• Santander Business Current Account Classic: £9.99 (first 12 months free for start-ups and switchers).
• HSBC Small Business Banking: £0 a month, not limited to a free period.

A free period is worth having, but put a reminder in your calendar for the month it ends. A year in, switching is easy through the Current Account Switch Service, which our guide to switching business bank account explains. The current list of bonuses is on business bank account offers.

Start-up accounts compared

Card spending abroad is a cost new businesses often forget: the high-street banks charge a percentage on every foreign transaction, which adds up if you pay for overseas software subscriptions on the card.

Credit checks and a thin history

Opening a business current account is mainly an identity and fraud check, not a lending decision, so a startup without trading history is not at a disadvantage. Some providers do use credit reference agency data to verify you. Our guide to whether business bank accounts do a credit check explains soft and hard searches.

Borrowing is different. Monzo, like every lender, says lending is subject to status and eligibility, and lenders want to see the business trading before they offer credit. If you expect to need borrowing in the first year, talk to a high-street bank about it before you choose, and do not assume an app-based account will lend to a new company. Apply to one provider at a time, so several searches do not land on your file at once.

What to set up first

The first weeks are when habits form, and the bank account is where most of them live. In order:

1. Move every business payment to the new account. Update your invoice template, payment links and any platform payouts (Stripe, PayPal, marketplaces) on day one.
2. Set aside tax from the first payment. On Monzo Pro or Team, Tax Pots move a percentage automatically; on other accounts, set a standing reminder to move it by hand. The tax set-aside calculator suggests a percentage.
3. Connect accounting software if you will use one, so the bank feed starts with the first transaction rather than being back-filled at year end.
4. Pay business costs from the business card, including software subscriptions, so receipts and transactions line up.
5. Note the VAT threshold. You must register once taxable turnover over 12 months goes above the £90,000 VAT threshold, or is expected to within 30 days.
6. Diary the end of any free period, and check whether the account still suits you then.

If you have already started trading from a personal account

Plenty of businesses start before the account is open: the domain, the laptop and the first client invoice often come first. That is fixable. Open the business account, then move future income and costs to it straight away, and keep a simple list of what you paid personally for the business before it existed, with receipts. Your accountant can treat those costs properly in the first set of accounts.

For a limited company, money the director spends on the company’s behalf is usually recorded as owed back to the director, and money the company owes the director can be repaid once the account is open. What you want to avoid is the reverse: company income sitting in a personal account, which makes the director look as though they owe the company money. Our guide to using a personal account for business explains why.

Which to choose

• You want to start trading this week and keep costs at zero: Monzo Business Lite or Starling.
• You want tax and invoicing automated from day one: Monzo Business Pro, with its first month free.
• You want a branch and free banking for as long as possible: NatWest’s start-up account.
• You want accounting software included: Mettle (FreeAgent) or NatWest (FreeAgent).
• You will handle a lot of cash: compare deposit fees carefully; see free business bank accounts for the charges that still apply.

For the full picture by business structure, see sole traders and limited companies. If you go with Monzo Business, our guide to opening a Monzo Business account walks through the application. Deposits are FSCS-protected up to £120,000, and you do not need a Monzo personal account.

The £50 referral is only for people who have never opened a Monzo account before, and you must download the app, apply, add money and make a first card payment within 30 days.

Open Monzo Business with our linkTakes you to monzo.com · Referral link