Choosing your business bank account

Posted: 1st August 2008

Choosing which bank to trust your business banking to is a difficult decision for a new business. There are various factors you need to consider when selecting your bank:

Past experience

Have you had any good or bad experiences of any of the banks in the past? Perhaps you’re really happy with the bank you do your personal banking with which would put it high on your list. Or have you been dissatisfied with your bank’s service which would make you want to go elsewhere? Nothing beats personal experience for helping you make a decision. Ask around – have any of your friends or contacts had any experience of business banking that they can pass on to you?

Fees / relationship building

Some of the banks offer free banking within certain limitations, which is great for startups. However, you will find that there is a down side to the free banking, which will most likely be a lack of personal service. We bank with one of the free business accounts and we don’t have an account manager that we can meet with, and we have to pay money in through the machines or post (not to a real live cashier). This means that we don’t have a personal relationship with anyone at the bank. This is fine if your needs are small but if you’re likely to need advice or finance in the form of loans this could work against you.

Most (if not all) offer free banking at least for the first year, which gives you a good start in those costly early days. So, if you think you need to interact with more than an ATM (which never talks back, in my experience) then you may want to consider one of the fee-based accounts that give you access to an account manager at your local branch.


If, as many startups find, you need some funding to get you started you may find it’s not which bank you choose but rather which one is willing to lend you the money. You may well have to do the rounds clutching your business plan before you find an amenable bank manager. If that’s the case then it’s not much of a choice for you.

Even if you don’t need funding straight away do think carefully about whether you may need a loan further down the line. If that’s the case you will want to start developing a relationship with your account manager straight away so that he/she is familiar with your business when the time comes.

Location of nearest branch

Finally, if you are based in a rural area you may want to take into consideration how close your local branch is. Is it convenient for your day-to-day banking? If not what other options are there: internet banking, banking through your local post office? Our bank provides us with envelopes to pay money in by post but I’ve never been comfortable with trusting our hard-earned cheques to the postal service so make a weekly trip to our nearest town to pay them in.

To sum up, it’s worth taking your time over choosing your bank as this will hopefully be a long-term relationship. Get information packs from each bank and see what they offer (or read up on their websites). If possible make appointments to go and talk to them and get a feel for their level of service.


  • How to Fund Your Business: The Essential Guide to Raising Finance to Start and Grow Your Business by Steve Parks
  • Raising Finance for Your Business: A Nuts and Bolts Guide for SME Owners and Managers by Mark Blayney
  • Raising Finance: A Practical Guide to Starting, Expanding and Selling Your Business by Paul Barrow
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