New limited company contractor here. I just finished comparing a number of online-focused business current account providers and settled on Starling Bank to open an account with. I’ll provide some insight into why I chose them and what I am looking for in a business account.
I considered the following providers:
1. What do you do? Are you a sole proprietor, contractor, limited company?
Limited company contractor, just starting out. I offer contract services in market research, data analysis and consulting. I intend to sell market research reports online in the future too.
2. What are the big pain points in managing your business finances? (think about things like invoices, expenses, payroll, taxes, etc.)
Just starting out so far with getting the accountants sorted - I compared a number of providers there and went with one that offers FreeAgent as part of their service. That accountant offered a company formation service as a (paid-for) convenience, including business bank account opening with either Metro Bank or Cashplus. Pain point: Cashplus said they could give 12 months free banking but reneged on their offer after I’d opened the account because it’s only supposed to be available if you sign up through a different partner site. They refused to apply the offer to my account but were perfectly happy for me to close that account and open a totally new account with a new card sent to me, just to get the offer. From my point of view this was bad customer service and that’s why I’ve ended up looking for a better provider, including checking whether Monzo does business banking.
3. What tools do you currently use to manage your business finances?
4. What do you like / dislike about your current business bank account?
I wanted to find a provider that offered the following:
- Low cost or free banking (Starling offers zero monthly fees)
- Possibility of getting an overdraft (Starling offers this)
- Interest on balance (none of the online-focused providers offers this)
- High or unlimited maximum account balance (Starling is the only provider offering an unlimited account balance)
- FSCS protection (Starling is the only provider offering this, although the others generally hold your funds in a ring-fenced account with e.g. Barclays Bank, so it’s protected through that).
- No bank transfer fees (Starling, Coconut and ANNA offer this)
- No fees for direct debits or standing orders (CountingUp, CardOneMoney and Acorn charge for this, other providers don’t)
- Low foreign transactions fee (Starling give the Mastercard exchange rate and charge only 0.4% on the transaction)
- Ability to receive payments from international customers (only Starling provides this).
Coconut and Tide were the next best options. Coconut is a high-tech platform, prepaid card provider so it comes with a maximum account balance of £100,000 and the funds are actually held in another bank, but otherwise its offering is very similar and competitive with Starling. Tide is also free, but charges 20p per bank transfer between your account and non-Tide accounts. The only downside of Starling is that it charges £60 to replace your card if you lose it outside the UK, for some weird reason.
I did not compare other features such as fees for handling cash deposits, getting statements and letters, etc.
5. If you could request one key feature for your business current account, what would it be? Are there any other features you look for in a BCA?
See above. The one key feature would need to be the cost especially over the first year of operation of my company. Many providers provide free business banking over 6-24 months for start-ups and Monzo would need to consider this if there is going to be a monthly fee for Monzo’s business accounts.