Can you have more than one UK business bank account?

At a glance

• Under UK law, businesses can have multiple business bank accounts, either with the same bank or with different ones

• Having more than one business bank account can provide better returns and enable tighter financial management

• Opening too many accounts could cause confusion and add to the overall cost of running your business

How many business accounts can you have?

There’s no UK law that limits the number of business bank accounts a company or sole trader can hold.

Business bank accounts can be current accounts or savings accounts, and you can open as many as you like, with the same bank or with different banks. 

However, while many of the most popular digital account providers offer free basic business bank accounts, you generally have to pay for extra features such as invoice management and international payments. Having lots of business bank accounts could therefore cost you more than running your business finances via a single account.

There are some advantages to having more than one business bank account, though. These include earning more interest on your savings and being able to separate funds you use for a particular purpose, such as day-to-day expenses or saving for tax.

How many bank accounts should a business have?

There’s no single “right” number of business bank accounts for a company – it depends on your specific needs and circumstances.

While some business owners prefer the simplicity of having a single business account, others choose to take advantage of the benefits offered by different business bank accounts to manage their finances.

You don’t have to open more than one account to benefit from the services on offer from a rival bank, of course. If you prefer to have just one account, you can switch to a new business bank account rather than keeping both the new and existing accounts.

However, while sole traders can use a personal current account for their earning and expenditure, limited companies must have at least one business bank account by law.

What different types of business bank accounts can you get in the UK?

In the UK, business bank accounts are usually one of the following:

• Current accounts you use for everyday transactions, such as receiving payments and buying supplies

• Savings accounts that pay interest on the balance, usually at a variable rate that may change based on how much you have in the account

Whatever type of business bank account you want, remember that making lots of applications in a short time can damage your credit rating, so it’s best to spread them out by a few months where possible.

Do all banks allow customers to have multiple business bank accounts?

Some business bank account providers limit the number of business accounts you can open with them. However, you can still open additional business bank accounts with other banks, as long as you meet their application criteria.

What’s more, many digital business bank account providers allow you to link accounts held elsewhere to their business bank accounts, meaning you can see all your balances and transactions in one place.

Policies vary between providers, so we’ve summarised the terms and conditions of three of the most popular:

How many Monzo business accounts can I have?

Monzo offers three levels of business current account: Lite, which has no monthly fees, Pro at £9 a month, and Team, from £25 a month. As a business account holder, you can open an instant access savings pot to separate savings from general cash flow. You can also open a further two business current accounts with Monzo, although each one must be for a different business. There are no restrictions on how many business accounts you have elsewhere, and you can link Pro or Team accounts to your other business accounts via the Monzo app.

How many Starling business accounts can I have?

Starling has a basic account with no monthly fees that you can tailor to your company’s needs with add-ons such as its Business Toolkit at £7 a month. You can open multiple Starling business accounts, as long as they are for different businesses that meet the bank’s criteria. However, sole traders aged under 25 can only have one account, while older sole traders can have up to two. The bank does not currently offer a business savings account, but you can view accounts held elsewhere online. 

How many Tide business accounts can you have?

Tide has four types of business current accounts: Free (£0 per month), Smart (£12.49 + VAT per month), Pro (£24.99 + VAT per month) and Max (£69.99 + VAT per month). Its Linked Instant Saver account is available alongside all accounts, but only Pro and Max account holders get the top rates. Smart account holders can open an additional business account, while Pro customers can have two more, and Max customers can have three further business accounts with Tide. Free account holders do not have this option. All customers must also link all external accounts they want to view via Tide during the initial sign-up process. This service is not available after that point. 

Why should I open more than one business bank account?

There are lots of reasons to open more than one business bank account. These include:

• Financial management – Having several business accounts enables you to separate funds for different purposes, such as payroll and supplier payments. Having a business savings account alongside your business current account can also help you maximise your returns

• Cash flow – Splitting money into different pots can give you a greater understanding of your business' cash flow, enabling you to manage it more efficiently

• Risk – Spreading your money across different institutions can help mitigate the impact of fraudulent attacks. Having no more than £85,000 with each UK-authorised banking group also means you get full protection under the Financial Services Compensation Scheme (FSCS)

• Benefits – You may choose to open one account that pays interest on your balance, and another that offers cashback on business spending or access to an accounting tool

Why shouldn’t I open more than one business bank account?

Potential reasons to avoid opening more than one business bank account include:

• Cost – You often have to pay for business banking via monthly fees, transaction charges or both. Having more than one business bank account can therefore increase the cost of running your business

• Time management – While some apps enable you to see all your accounts in one place, having several accounts can be confusing and increases the time you spend managing your business banking

• Conditions – Ensure you are aware of any conditions, such as maintaining a minimum balance, because you may face penalties for failing to do so

Read more...

• What are the benefits of a business bank account?

• Can I use a personal bank account for business?

• How can I switch my business bank account?