What's the best business bank account for UK freelancers?
(Updated May 2024)
There’s never been a better time to look at your freelance business banking.
The UK, in particular, is spoilt for choice when it comes to accounts that work the same way we do: efficiently, online, often from our phones, with one hand free for a cuppa.
When I first opened a business bank account, I was forced into a high street bank branch. Taking in all manner of paperwork, I sat down with a manager with a penchant for photocopying.
Not anymore!
These days, you can open a bank account in minutes.
For years, I was paying:
● Monthly banking fees
● Transaction fees
● Overseas payment fees
I know my particular bank had a massive stallion to feed, but still.
Not anymore!
Some challenger banks have tiny birds as mascots, and they’re far less greedy.
A frequent discussion in the Being Freelance Community is which bank freelancers should choose.
But before we take a look at which banks your fellow BFFs (Being Freelance Friends) recommend, there are a couple of points that are useful to know first.
What is FSCS protection?
Something you’ll spot when choosing a bank in the UK. Some accounts are FSCS protected (Financial Services Compensation Scheme). That means if that bank fails, you’re covered up to £85,000.
If you have a big amount building up (here’s hoping!), it’s worth keeping in mind.
Do sole traders need a business banking account?
No! In the UK, a sole trader can use a personal current account for their banking. However, it’s a very good idea to keep your business and personal finances separate. So a sole trader could open a ‘personal’ bank account for their freelancing business. But these don’t often come with the various business tools you might appreciate, like integrations with accounting software.
For the sake of this post, we are just looking at business bank accounts.
We can’t list all the various features of each bank, so if one takes your fancy, do check out their sites.
What bank accountS ARE GOOD for UK freelancers?
In no particular order, let’s take a look at the most popular business bank accounts recommended by freelancers in the Being Freelance community. (Updated May 2024)
Starling
Starling is a fully licensed online bank, and here’s all the good stuff:
● FSCS protected
● No monthly or transaction fees
● 24/7 customer support
● Integrates with Xero, Quickbooks, FreeAgent
● You can apply for overdrafts and loans
● Manage your money into pots
Even the no-fee account has great money management tools. But if you need more, you can add the Starling ‘Business Toolkit’ for £7/month. The toolkit enables you to create, send, and match invoices, run HMRC tax calculations and reports, record VAT, and submit VAT returns.
This might be worth considering if you don’t have accounting software.
Starling also offers accounts in Euros (sole traders & Ltd companies) and US Dollars (Ltd companies only) for an extra fee - brilliant if you work a lot in those currencies.
You should also make the most of Starling’s ‘Saving Spaces’.
These are sub-pots within your account that make it easy to set money aside for things like tax, pension, annual payments or overheads, so you know how much money you really have to play with.
Starling no longer offer their Business Savings account which is a shame. But it’s one of the greenest, most ethical challenger banks on our list.
The only real snags come if you’re a freelancer who needs to deposit a lot of cash (which isn’t many of us, but it could happen), as they charge a 0.7% fee with a minimum £3 charge. And it doesn’t yet have a third-party log-in option, but that’s only an issue if you want your accountant, for example, to have access to your business account or your business grows and you start taking on staff.
WHAT THE BEING FREELANCE COMMUNITY THINKS OF STARLING
Starling is very popular with the Being Freelance community. Here’s what the Starling Superfans have to say:
Becci McEvoy: “I use Starling and love it. It does everything I need and is super simple to set up and use. I love using the pots for different things.”
Helen Forster: “Starling is very easy to set up, has no fees, and their support team is always extremely helpful.”
Dan Bailey: “Using Starling has made my life so much easier. The app's simplicity and the quality of customer service have been excellent.”
A massive thumbs up from Team Starling, then.
Tide
Since 2015, Tide has swept up over half a million customers.
● No monthly fees
● Integrates with Quickbooks, Xero, FreeAgent
● Send, pay and track invoices
● Upload receipts that automatically match with transactions
● FSCS protected
● They can register your business with Companies House
That last one is worth looking at. To start a Limited company in the UK, you register your business with Companies House. This costs £50. Yet, Tide will do it for you for just £9.99! That’s a pretty cool service.
They have a free account and a savings account. The free account does have limitations though. If you want free transfers and extra services like phone support and a 24/7 legal helpline, you have to switch to a ‘Plus’ account for £9.99 + VAT a month. On the free account, there’s a 20p charge for every transfer in and out of your account. Worth thinking about how many you do. However, the upside to upgrading is that you get 20 free transfers every month.
If you start to hire team members, you can get expenses cards for them with further fees on their ‘Pro’ plan.
Tide also run regular offers, for example in April ‘24 they gave £80 cashback for opening an account. Their offers are subject to change, but they do them fairly regularly, so it’s worth keeping an eye out.
WHAT THE BEING FREELANCE COMMUNITY THINKS OF TIDE
Here’s what freelancers who go with the Tide think:
Chris Evans: “Tide was simple to set up, and their app is simple too. I like things to be kept simple on that side of things. It links up with my FreeAgent easily and it just works. No fuss, no mess.”
Monzo
Monzo business accounts are getting popular with freelancers.
● Integration with Xero, FreeAgent, Quickbooks
● Invoicing
● Multi-user access
● Tax pots with auto saving
● FSCS protected
● Receive and make payments in over 40 currencies
Monzo’s entry-level ‘Lite’ account is fee-free, but it doesn’t integrate with any accounting software (boo!).
To get that (important) functionality you need Monzo’s ‘Pro’ account. It’s £5/month, so cheaper than the high street banks, and gives you lots of extra clever features, such as:
Monzo Pro’s ‘Tax Pot’ function allows you to choose a % every time you’re paid to be set aside for tax. It's very similar to Starling’s free Saving Space, but it’s cool that it’s specifically a % for tax and happens automatically. Could be worth the £5 fee by itself.
And their ‘virtual card’s are brilliant for paying for things online. You can create a virtual card, that acts just like a normal debit card, for each of your ‘pots’ and they can be time limited. Genius.
With Pro you also get a six-month free subscription to Xero, so if that’s an accounting platform you’ve been eyeing up, you’ll be happy.
Lots of their Pro features are great but many others offer accounting software integration for free, so it doesn’t feel like something you should be paying for if that’s all you’re interested in.
Make money with Monzo referrals!
You can earn £50 when you refer a new business and they’ll get £50 for joining Monzo too!
We can put that to the test - if you’re interested in joining Monzo, here’s the Being Freelance Monzo referal link. 👀
You’ll apparently get £50 🙌
WHAT THE BEING FREELANCE COMMUNITY THINKS OF MONZO
Monzo is growing in popularity with the Being Freelance community. Here’s what the Monzo Missionaries have to say:
Linda Harrison: “I signed up for Monzo after a freelance friend recommended it. She loves it, and so do I. The free version is enough for me for now, and I like that you can set up pots for tax, savings (er - what are those?), pension, etc. And as a little bonus, we both got £50 when I signed up.”
Andy Hirst: “Monzo all the way! The app is great, which is probably one of the most important things to me, and the service has been spot on.”
Andy Reedman: “I moved from Starling to Monzo business cause Monzo has this cool ‘if money in is sales, set aside [input own %] into this savings pot for the tax person’ feature. Set and forget.”
Lot of love for Monzo even though they’re paying for it!
Even more business bank accounts for freelancers
Mettle
Mettle is an online business account operated by NatWest - it’s like NatWest trying to be cool, and to be fair, they’ve pulled it off:
● No monthly fees
● FreeAgent is free (NatWest owns FreeAgent)
● Integrates with FreeAgent, Xero, Quickbooks
● Earn interest on savings
● FSCS-protected (it never used to be, but it is now)
Oh yes, this is the big pull for freelancers. You get FREE FreeAgent! That could cost you £150 a year, but now it’s free!
Despite them wanting you to have FreeAgent, Mettle still integrates with other accounting software. They play nice.
Even though it comes with free FreeAgent, you can also create and send invoices within the app. You receive an alert when they’re paid, and payments are automatically matched to the outstanding invoice. Expenses are simplified, too.
Mettle also has its own variation on ‘spaces’ and ‘pots’. They call it a Money Pot — the same idea, allowing you to easily set aside money to save for things like taxes or new equipment. And just like Monzo, you can automatically have a % set aside. But with Mettle, there’s no charge. Can’t stress enough, what a great feature this is.
You can also allocated one ‘pot’ to be a savings pot, earning interest. It’s not huge interest, but if you were going to have money sitting around anyway, may as well make it work for you! You can earn interest on balances as little as £10, and you can save up to £1 million, which seems pretty low considering how ace we all are at freelancing, right?
All features are 100% free. In fact, there are no paid options. There’s something rather nice about that simplicity compared to some of the competition.
However, it’s worth noting that you can’t make or receive international transfers. You can use your Mettle card with overseas companies, but overseas bank transfers aren’t possible. Yet.
Make money with Mettle referrals!
You can earn £50 when you refer a new business and they’ll get £50 for joining Mettle too!
How’s it work? Well here’s my code: 9KNL3
Once you’ve opened an account, you have 30 days to make a card payment and enter that code in their app.
You’ll apparently get £50 🙌
WHAT THE BEING FREELANCE COMMUNITY THINKS OF METTLE
Despite its international limitations, it’s still a great choice for freelancers. Here’s what the Mettle Heads have to say:
Andi Elliott: “Mettle is fantastic. The app and customer service are really great. I’ve got pots that get automatic percentages of any invoice paid (I’ve set up tax, pension and R&D). Plus, you can nominate one pot to receive interest from (so my tax pot now generates interest for me!)
Jane Nizi: “I use Mettle, which I like for its user-friendliness and the free accounting software.”
Jenny Lewis: “I like Mettle for the free access to FreeAgent — and I love the pots that do maths for me!”
Bekah Chapman: “I opened a Mettle account to get FreeAgent accounting for free. Mettle has no monthly charges, which is great, and it syncs with FreeAgent, so all my business ‘ins and outs’ populate automatically.”
Leyla Alexander: “I have a Starling account and then Mettle for free FreeAgent. I can save the £144 I used to pay a year for Quickbooks!”
Getting your finances
Chase
Chase me.
Chase me?!
● No monthly fees
● Cashback when you spend (first year)
● Good savings
● FSCS-protected
Chase doesn’t offer a dedicated business account, but its no-frills current account offers 1% cash back on everyday purchases on your card for a year, so we’ve forgiven them.
This is for sole traders only as it’s basically a personal account. Once you’ve got your main account, you can open extra accounts for free in seconds. This is handy for separate money for tax or upcoming expenses.
Their account is free with no monthly fees, and you can even use it abroad without paying a penny.
Compared to most options on our list, your account doesn’t go as far, but for that first year alone, it could (literally) pay to bank with them.
WHAT THE BEING FREELANCE COMMUNITY THINKS OF CHASE
It’s not as popular as other banks on our list, but it still gets a thumbs up from freelancers:
Matt Meir: “Chase is pretty decent. They’re app-based, so your card details are given in the app as soon as you sign up and get accepted, and you don’t need to wait to make digital purchases.”
Revolut
Revolut is definitely targeting freelancers, but can be a bit confusing because they offer so many variations on their accounts.
● Great for those with international clients
● Quick and easy to set up
● Range of lifestyle perks
● Savings
● Accounting software integreations
● Different options for sole traders & ltd businesses
There’s two options here for UK freelancers.
Revolut Pro
Revolut Pro is only for sole traders. It starts free but has a variety of versions with increasing fees from £3.99 to an eye popping £45 a month! Best up those client rates.
Revolut Pro seems great for those freelancing with overseas clients. And even better for digital nomads - those working freelance whilst travelling. The extra fees go towards personalised cards and ‘perks’. It can all feel a bit gimmicky, BUT, take a look - if those perks suit your lifestyle then you could well be quids in.
Revolut Business
If you’re a limited business who works with international clients, check out the Revolut business account. Their global payments, multi-currency accounts , and excellent exchange rates are a huge plus.
In fact with the fixed exchange rates and free international payments you might save enough to balance out the monthly fee. And it’s quite a fee at £19 a month (there’s also a more restricted free plan - take a look at the options).
As you’d hope, Revolut can be integrated with Xero, QuickBooks and FreeAgent to keep things simple and straightforward for you.
As they’re an e-money institution (EMI) Revolut safeguards your money in a way that’s different to FSCS protection. If you want to read all the detail then they’ve got a handy blog.
WHAT THE BEING FREELANCE COMMUNITY THINK OF REVOLUT
BFF Eman Ismail does a lot of work with people in other countries and has been won over “Revolut is amaaaazing. I love it. Highly recommend. It’s worth paying for being able to accept different currencies without the extra fees!”
Monese
Monese offer a free plan that has some pretty decent features, including:
● Multi-currency accounts
● International money transfer in 15 currencies
● Budget insights
You can upgrade to the Classic account for £5.95/month, which allows limitless cash deposits and withdrawals. And you can make payments in foreign currencies without paying any fees.
It’s not technically a bank, but does all the things you want. And whilst it doesn’t have FSCS protection their is still safeguarding in place for your funds.
They also offer £10 when you get another business to join (nowhere near as much as Monzo, but still nice).
Maybe it’s not been that effective though as I’m yet to find a BFF who uses Monese - please let me know if you do; I’d love to hear why you love it.
Anna Money
Anna Money was voted as the Best Overall Freelance Business Account by Business Expert, and there’s lots to like:
● Create and send invoices
● Chase payments
● Automatic tax calculator
● Automated HMRC tax payment reminders
● 1% cash back on purchases
● A cat on your card
However, with the free account, you’ll pay 20p per transfer and £5 for international payments.
Upgrading to the Business account is free for the first month, then £14.90 + VAT/month (so it's not the cheapest). That gets you 50 free monthly transfers and 1 — yes, you read that right — 1 free international payment per month. Use it wisely.
You have to weigh up if the monthly fee is worth that.
They even make you pay extra for ‘pots’ that are free to use elsewhere. Whilst at the same time offering cashback on certain purchases.
Can’t help but think the list of potential extra fees is a bit off putting. As a company of one, you want things as simple as possible.
But Anna Money are trying to bring banking and bookeeping together. They estimate the tax you owe and send you reminders. If you’re already using external software like FreeAgent or Xero, then paying again for these doesn’t make sense. AND they do have a cat on the card.
Like Monese, I haven’t found a BFF who uses Anna Money yet, but it’s clearly aiming to serve freelancers, so please let me know if you bank with them. I’d love to hear the pros and cons.
UK high street banks for freelancers?
Many people bank on the high street purely out of habit.
Most traditional banks charge freelancers monthly fees for business banking (£8.50 seems common) for holding an account, plus some have transaction fees and yet further fees still for overseas transactions. It’s worth figuring out how much that can add up. It can also take weeks to get your account up and running, which can be frustrating when you’re used to doing things quickly online and you’ve got client work to be cracking on with.
And if you think ‘well, at least it’s on the high street so I can pop in and talk to someone about my business’… find out if that’s actually true. My high street bank still made me phone up in order to reach the business team. Frustrating.
The one high street bank that got a big thumbs for being freelancer friendly was Santander. They’ve realised their bigger branches might as well be put to good use and have opened some up with coworking spaces. Open to all, Santander customers get money off their food & drink. So if there’s one near you, might be worth considering.
Even so, there’s still quite a few solo business owners in the Being Freelance community community who seem happy managing their money with the big guys.
WHAT THE BEING FREELANCE COMMUNITY THINKS OF THE HIGH STREET BANKS
Daniel Hiscoke rates Barclays for “…syncing with Quickbooks, providing spending and payment alerts on its app, and offering simple international payments.”
Others, including Andrea Boughton, rate NatWest highly primarily because it offers free use of FreeAgent, which saves you a chunk of money on accounting software.
Angela Lyons points out that that Santander “have introduced the free co Work Cafe space in London. Open to all but Santander customers get 30% off on coffee and food!”.
Some have just used their personal accounts, like Matt Drzymala: “When I went freelance, I didn’t know about Challenger Banks, so I added an extra section to my account and named it after my business. I need to look at a proper business account because I don’t get any perks doing it like this—oops!”
However, most BFFs have grown tired of paying high monthly fees, feel short of support, want decent apps and have switched to digital-focused challenger accounts instead.
WHAT ARE THE MOST ETHICAL BANKS FOR FREELANCERS?
There’s an ‘ethical’ boom happening across the board; we increasingly choose products and services that are ethically produced and don’t harm the environment or society.
So it’s not unreasonable that many freelancers want a bank that doesn’t sacrifice its principles to generate profits. Sadly, ethical banks are still thin on the ground, with a study by the highly regarded Business Expert only recommending two:
Triodos
When it comes to super-ethical banking, Triodos is growing in popularity. They finance things like renewable energy, sustainable farming, education, charities, and social housing, and they shun ploughing money into fossil fuels, deforestation, etc.
● FSCS protected
● Excellent customer service
● Knowledge that your money is helping the planet
But what about the banking?
Well, it only rates so-so for freelancers as they mainly target the non-business market.
The downsides are many, as it doesn’t offer accounting software integration, and the banking app is less sophisticated than other banks on our list.
WHAT THE BEING FREELANCE COMMUNITY THINKS OF TRIODOS
Even though Triodos isn’t geared up for business accounts, it has its fans:
Elen Robert: “I do my business banking with Triodos. It won’t work for all businesses, and they could do a lot more to make things easier for us, but it works for me, and I know my money won’t be going towards fuelling the climate crisis.”
Yes, it’s less business-friendly, but if you want to reduce your carbon footprint, Triodos might be the answer.
the Co-operative bank
The ethical ‘big’ name is Co-op Bank.
Co-op has policies on climate change, human rights, and animal welfare, and it supports many ethical campaigns and initiatives.
So, they like to do the right thing. Hoorah!
Are they the right bank for your freelance business?
● No monthly fees for maintaining the account, card purchases or bank transfers for 30 months
● Integrates with accounting software
● Overdraft, credit and loan options
● FSCS protected
● Ethically focussed
Once your 30 months free banking are up, you’re charged £7/month, though of course you could then switch to a free bank elsewhere.
If you bank with Co-op, you can also open a business savings account. Their rate of interest is pretty good if you’re happy to lock your money away for a few months.
While they’re big on ethics (which is why you’re banking with them anyway), there are a couple of snags. We used to hear that it could take weeks to open your account, and they don’t offer 24/7 support like almost all the others. Now, it’s possible they’ve upped their game in account opening (because that wait seems crazy), if you’ve got an experience, please let me know.
It’s worth noting that if you’re a Federation of Small Businesses (FSB) member, you can get free business banking from Co-op with the FSB Business Current Account. Not time restricted, it’s just free. So clearly a great option if you’re an FSB member and want to be ethical!
SO, WHAT’S THE BEST BANK FOR FREELANCERS?
Well, Starling and Monzo both come out strong - Starling is totally fee free, but Monzo has some great features you can pay for.
But as you can see, there are a lot of benefits with various banks. The ‘free FreeAgent’ accounting software that comes with Mettle is getting a lot of love in freelance circles. It has auto-filling pots for free, when you’d pay it with Monzo. Once it has international payments it could start getting Starling in a flap.
And remember, some freelancers have a Mettle and a Starling account.
Meanwhile, for those doing a lot of overseas work, Revolut has a clear specialism in international transactions that freelancers can benefit from.
The best thing to do is research and pick the one that suits your business needs best.
Things to think about when choosing your FREELANCE business bank
● Brush up on how many transactions you’re likely to make in/out each month
● Know if you’ll be making/receiving lots of overseas transactions
● Check the perks
● Check it will work with you accounting software
● Research that it fits with everything you need it to do
And remember, if you’re unhappy, it’s easier to move banks than you think.
You don’t need to worry about client payments going astray, the UK banks have to make sure everything is forwarded on.
So, just make the switch!
Now, here’s to watching that bank balance go in the right direction as your freelance business thrives.
Huge thanks to those BFFs in the Being Freelance Community who gave their thoughts. You should come and join us! It’s a friendly & fun, but as you can tell, an excellent place to ask advice as you grow your freelancing business.
There’s more advice on managing your freelance finances as part of the ‘How to get started being freelance’ course. It’s online training to help new freelancers get started the right way.
This post was collectively written by Ian Winterton, Becky Coote, Matt Drzymala and Steve Folland.
All information given is taken from the bank websites, correct as of May 2024.