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How to choose a limited company bank account

When you have formed a limited company, one of your first tasks will be to choose the best bank account for your new business.

How to choose a limited company bank account

Your company formations agent or accountant may already have offered to do this for you, or you may choose simply to open an account with your personal bankers.

We would recommend comparing several accounts before signing up, to ensure you get the maximum value out of your bank.

Things to consider when choosing a bank account

Personal banking Vs business banking

Don’t necessarily opt for opening a business account with your personal bank. This may be the easiest option and can add simplicity when linking online accounts, for example, but you should also check what ongoing transaction costs you will have to pay and compare interest rates (particularly on deposit accounts rather than current accounts).

Joining incentives

All the main high street banks offer up to 2 years’ free banking to start-up businesses, but the incentives to sign-up are less attractive if you are moving bank accounts and have been operating your business for some time.

Interest rates

Compare interest rates between business bank accounts. Given that most current accounts offer almost zero interest, focus on the rates offered on deposit accounts, where you may decide to place any tax liabilities for safekeeping (VAT, and Corporation Tax).

Online Banking

Online banking is a must these days – you can save a substantial amount of time by using web-based services for everything from paying your staff to setting up direct debits and viewing your transactions 24/7. The quality of interfaces and online services on offer does vary a great deal between banks.

Face to face contact

If face-to-face contact is important to you, find a bank which will provide you with a dedicated small business account manager. They will have experience of dealing with small limited companies and will be able to help with any questions you may have.

Merchant account

If you want to accept card payments from customers, you will need to set up a merchant account. The banks charge a percentage of each transaction for the privilege.

Other banking facilities

If you want access to other banking facilities, such as loans and overdrafts, or more ’boutique’ products such as invoice financing, you may find that the bank you choose to open a bank account with is not necessarily the best choice for other services.

Transaction charges

Importantly, you should find out what transaction charges apply to your account after any free period has expired.

What business banking deals are available?

The Tide business account is a popular choice for small business owners as it offers a range of beneficial features:

Tide Business Account

  • Online application and instant approval process; able to provide an account number in 5 minutes
  • Do not require a credit check to open the account
  • Free to receive bank transfers and to set up direct debits and standing orders
  • Low cost – no monthly or online account management fees
  • Access your account 24/7 via the phone, online or mobile app

Apply for an account now or click here for more information.

Further Information

Read our related article to find out how to actually set up your company bank account.

More on limited company accountants and limited company tax.

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