How to choose a business bank account

A dedicated business account is one of the first things a new business should set up. It keeps your records clean, makes you look more professional to customers and suppliers, and builds a banking history that helps when you need a loan. In some places and for some business types, such as limited companies, a separate account is effectively required.

Types of business accounts

Provider type	Strengths	Trade-offs
Traditional bank	Branches, cash deposits, lending, wide range of services	Monthly fees and minimum balances are more common
Credit union	Member-owned, often lower fees, community focus	May have fewer digital features or locations
Online or digital bank	Low or no monthly fees, fast setup, good apps and integrations	Limited or costly cash handling; support mostly by chat
Payment or e-money platform	Multi-currency, quick international payments	Funds may be safeguarded rather than covered by deposit insurance

What to compare

• Monthly fee and any minimum balance needed to waive it.
• Transaction fees: transfers, card payments, cheques, and the number of free transactions included.
• Cash deposits: essential for shops, salons and restaurants. Check where and how you can deposit, and what it costs.
• International payments: exchange rates, transfer fees and multi-currency accounts if you trade abroad.
• Integrations: automatic feeds into accounting software, payment processors and invoicing tools.
• Cards and permissions: extra cards for staff with spending limits.
• Interest and savings: some accounts pay interest or offer linked savings pots.
• Lending: overdrafts, credit cards and loans. Many lenders favour existing customers.
• Support: phone, chat or branch, and how quickly problems are resolved.

Check your deposits are protected

Deposit insurance protects your money if a bank fails, up to a set limit. In the US, the FDIC insures deposits at member banks up to $250,000 per depositor, per insured bank, for each ownership category. The NCUA provides similar cover at federally insured credit unions. In the UK, the FSCS protects eligible deposits up to £120,000 per person or business, per authorised institution. Some fintech apps are not banks themselves and hold your money with a partner bank, or safeguard it instead of insuring it. Read the small print.

Documents you'll usually need

• Photo ID and proof of address for owners and directors
• Your business registration details or company number, where applicable
• A tax identification number, such as an EIN in the US
• Formation documents or partnership agreements for companies and partnerships
• Business licences, if your sector requires them

Requirements vary by country and bank, so check the provider's list before you apply.

A simple way to decide

1. Write down your typical monthly activity: number of payments in and out, cash deposits, and any foreign currency.
2. Shortlist three providers and calculate the monthly cost of each using those numbers.
3. Rule out any that don't integrate with your accounting tools or can't handle your cash.
4. Check deposit protection, reviews and support options.
5. Open the account, then connect it to your bookkeeping from day one.

Want to talk it through with someone local? Browse banks and credit unions, accountants and financial advisors on Trades Area.

Frequently asked questions

Do I need a separate bank account for my business?

It is strongly recommended for every business and often required for limited companies. It keeps records clear and makes taxes and borrowing easier.

Can I open a business bank account online?

Yes. Most banks and digital providers let you apply online, often within a day, as long as you have the required ID and business documents.

Are online business accounts safe?

Many are, but check whether the provider is a licensed bank covered by deposit insurance, or a payment company that safeguards funds instead.

What is the best business bank account for a small business?

The best account depends on your activity. Low-fee online accounts suit digital businesses, while traditional banks often suit businesses that handle cash or need lending.

Sources: FDIC: Understanding Deposit Insurance · FSCS: Check your money is protected

This article is general information, not financial advice.