What a Start-Up Needs From a Business Account: 6 UK Options Compared

Choosing the best account for a start-up business comes down to a few practical questions. Do you need a bank account or will an e-money account do? What does it cost once the free offer ends? Can you open it before you have any trading history? And does it help with the accounting and tax admin that every new company faces?
This guide sets out what a start-up should look for, explains the difference between a bank account and an e-money account, and compares six options side by side. Fees and offers change, so figures are as published by each provider in October 2026.

What a start-up needs from a business account

A startup business account does one job above all: it keeps the company's money separate from yours. For a limited company that is a legal requirement, because the company is a separate legal entity. Sole traders are not legally required to open one, but many providers do not allow a personal account to be used for business, so a separate account is the practical choice.

Beyond that, five things matter most in the first year:

• A low fixed cost. Early revenue is uneven, so a monthly fee that is zero or paid only when you use it keeps overheads down.
• Fast opening with no trading history. You should be able to apply with a company number and ID, not a track record.
• Cheap payments. Check what you pay to send and receive money, take cash and pay by card.
• Accounting and tax tools. Invoicing, receipt capture and links to accounting software save hours, and Making Tax Digital is now part of life for many small businesses.
• Room to grow. A plan you can upgrade later is easier than switching accounts when you hire your first employee.

Bank account or e-money account: what is the difference?

Both kinds of provider are regulated by the Financial Conduct Authority, but they are not the same thing, and the difference affects what happens to your money if the provider fails.

A bank account is held with a bank that is authorised by the Prudential Regulation Authority. If the bank fails, the Financial Services Compensation Scheme (FSCS) protects eligible deposits up to £120,000 per person per bank, a limit that rose from £85,000 on 1 December 2025.

An e-money account is issued by an electronic money institution. It can have a sort code, an account number and a card, and it works like a current account day to day. Your money is safeguarded, which means it is held separately from the company's own funds, but it is not covered by the FSCS. Some platforms sit in between: Tide, for example, is not a bank itself, but its current accounts are provided by ClearBank, a bank, so deposits are FSCS protected.

Neither type is automatically better. What matters is that you know which one you are opening and that the protection matches how much money you plan to hold.

Start-up business accounts compared

The table below puts six accounts side by side. ANNA is listed first, followed by the other five in a fixed order. Check each provider's current tariff before you apply.

The six accounts in more detail

ANNA

ANNA is an excellent fit for start-ups. It is a start-up itself, so it knows the problems new businesses run into and knows how to work with them. The Free plan costs £0 and includes one card and unlimited outgoing transfers. The first £1,000 of incoming payments each month is free, then 0.95% applies, which is worth checking if you expect most of your income to arrive by transfer. Paid plans start at £12.90 a month plus VAT for Grow, which includes 15 transfers a month and two cards.

The draw for a start-up is speed and admin. You can open the account online in under 10 minutes, get a virtual card straight away and receive the ANNA card in 3 to 4 days. Auto Accountant, ANNA's AI accounting and tax tool recognised by HMRC, is free for the first four months and then £29 a month plus VAT. It prepares Corporation Tax, VAT returns and confirmation statements. Currency accounts in USD, EUR and CHF are free on every plan, which helps if you invoice abroad. ANNA is available to UK residents.

ANNA is an e-money business account, not a bank. The account is issued by PayrNet Limited, which is authorised by the FCA, and your money is safeguarded: held separately from company funds and never lent out or invested. It is not covered by the FSCS.

Starling

Starling is a licensed UK bank with no monthly fees and no fees on UK payments in or out. It connects to Xero, QuickBooks and FreeAgent, lets you add other directors for free and includes free invoicing. Free cash withdrawals at ATMs are limited to six a day with a £300 daily cap. Cash deposits at the Post Office cost 0.7% with a minimum of £3, and cheques are free to pay in. It is aimed at limited companies and limited liability partnerships registered at Companies House, with UK-resident individuals as owners, so general partnerships and companies owned by other companies are not supported.

Monzo

Monzo is a UK bank. Its Lite plan is free and files directly to HMRC for Making Tax Digital. Pro costs £9 a month, with the first month free, and adds invoicing, automatic tax pots and a connection to Xero and other bookkeeping tools. Team starts from £25 a month and adds expense cards and bulk payments. Only sole traders and limited company directors based in the UK can apply, and deposits are FSCS protected up to £120,000. If you want to start free and add tools as you grow, the plan structure suits that.

Tide

Tide is not a bank. It is an FCA-authorised e-money firm, and its current accounts are provided by ClearBank, so deposits are covered by the FSCS up to £120,000. The Free plan includes five transfers a month, then 20p each, along with payment links, free Making Tax Digital tools and three invoices a month. Smart costs £12.49 a month and Pro £27.49. The free plan's transfer allowance is the main limit: a start-up that makes dozens of payments a month will reach it quickly and may need a paid plan.

NatWest

NatWest's Start-up account offers free banking on everyday transactions for the first two years, after which it moves to the standard tariff. Charges for unarranged overdrafts, Bankline, international payments and additional services are not part of the free banking offer. It includes FreeAgent accounting software at no extra cost for as long as you keep the account. The account is for businesses that have been trading for less than a year with turnover under £1m, and the application takes about 10 minutes. You can also use branches and the Post Office.

Lloyds

Lloyds charges no monthly fee for the first 12 months, then £10 a month. It suits start-ups that handle cash: paying in or taking out cash costs 85p per £100 at an Immediate Deposit Machine or £1.60 per £100 over the counter. A CHAPS payment costs £30. As a high-street bank it offers branch access, which some founders want when they are first setting up. The main thing to plan for is the end of the free year, when the monthly fee starts.

What happens when the free period ends

Several offers above are free for a limited time. NatWest's two years of free everyday banking and Lloyds' free first 12 months both end, after which you pay the standard tariff. Put the end date in your calendar and compare the account against alternatives a month before. Accounts with no monthly fee, such as Starling, Monzo Lite and the free plans from ANNA and Tide, do not have this cliff edge, but they may charge for specific payments or limit what is included.

How to choose

• Mostly online payments and tight cash flow: look at the zero-fee accounts and check the per-payment limits.
• You take cash: compare cash deposit fees first. Per-£100 charges add up quickly.
• You want accounting built in: compare Starling, Monzo Pro, Tide, NatWest with FreeAgent and ANNA's Auto Accountant.
• You invoice abroad: check for currency accounts and foreign exchange fees, which differ a lot between providers.
• You want a branch nearby: a high-street provider such as NatWest or Lloyds is the practical choice.
• You will hold a lot of money in the account: check the type of provider. Bank deposits and e-money accounts are protected differently.

What you need to open a business account

Most providers ask for the same basics: your company number if you have a limited company, photo ID for the directors, proof of address and a description of what the business does and the payments you expect. Several providers only accept UK residents, and some do not support holding companies or businesses owned by other companies, so check eligibility before you start an application. Opening takes minutes at some providers and several days at others, so apply before you need to pay a supplier.

Frequently asked questions

Do I need a business account for a start-up?

If you run a limited company, yes: it is a separate legal entity and must keep its finances apart from yours. Sole traders are not legally required to open one, but many providers do not allow personal accounts to be used for business, which makes a separate account the practical choice.

Can a start-up open a business account with no trading history?

Yes at most providers. You usually need a company number and ID rather than a track record. Some start-up offers, such as NatWest's, are aimed at businesses that have been trading for less than a year.

Is an e-money account safe for a start-up?

Funds in an e-money account are safeguarded, which means they are held separately from the provider's own money. They are not covered by the FSCS, which protects deposits at banks up to £120,000. If you plan to hold large balances, check what protection applies.

How long does it take to open a business account?

It ranges from minutes online to several days, depending on the provider and how complete your documents are. Apply before you need the account, and have your company details and ID ready.

Can a start-up have more than one business account?

Yes. Some start-ups keep a second account to separate tax money or to spread balances across providers. Accounts at banks that share a licence count as one for FSCS purposes, so check the licence if protection is the reason.