What Does a UK Business Bank Account Really Cost Per Year?

Four accounts, three businesses, very different bills

A “free” business account can cost nothing for a company that only sends bank transfers, then become expensive as soon as cash or foreign currency enters the picture. We modelled four UK business current accounts using the tariffs available on 27 October 2026.

The standard-year results are below. “Standard year” means a full year after any introductory free-banking period has ended. It annualises the tariffs checked on 27 October 2026; it is a like-for-like snapshot, not a promise that every price will stay fixed for the next 12 months.

These are modelled fees, not quotes or customer averages. The international column is only a complete total where the provider publishes enough information to reproduce it. Monzo gives a fee range and confirms the exact charge in the app. NatWest publishes a maximum FX margin but the actual live rate is only confirmed when the payment is processed. Calling either result an exact annual bill would be neat, and wrong.

Download the calculation results as CSV.

The profiles we priced

All three profiles are UK limited companies. None uses an overdraft, CHAPS, paper statements, returned items or extra paid account features.

For cash, we used the lowest clearly published standard route available to the profile: Post Office deposits for Starling and Monzo, an Immediate Deposit Machine for Lloyds, and NatWest's branch, Business Quick Deposit or Post Office tariff. A business without practical access to that route may pay more.

For the euro profile, payments use the shared-charge option and the lowest published local or SEPA route. We hold the sterling value at £1,000 per payment so the fee calculation is reproducible. Real exchange rates move. The model isolates the provider's stated charge rather than pretending to forecast the pound.

Digital banking can genuinely cost £0

Starling's business account has no monthly fee and no charge for UK payments in or out. Monzo Business Lite is also free, and Monzo says UK bank transfers are free. Both therefore cost £0 in the digital profile under our assumptions.

Lloyds' published tariff includes electronic payments at no extra cost but charges £10 a month after its introductory period. That makes the standard-year total £120. NatWest's Standard Tariff has no minimum monthly charge but charges 35p for each automated payment in or out. Fifty items a month produce a £17.50 monthly bill, or £210 a year.

This is why a monthly account fee is a poor shortcut. A £0 monthly fee can sit beside per-transaction charges. A £10 fee can include the electronic traffic another bank meters.

Cash changes the order

Our cash profile deposits £60,000 over the year in 60 separate £1,000 deposits.

Monzo charges £1 per deposit, so the annual cash cost is £60. The profile is within Monzo's published limit for a limited company: £10,000 a month, with up to £4,000 in one Post Office deposit. A sole trader has a lower £3,000 monthly limit, so this profile would not fit.

Starling charges 0.7% of the deposit, subject to a £3 minimum. Each £1,000 deposit costs £7, producing £420 for the year. Its published business-account cash limit is £5,000 a day and £100,000 a calendar year, so the model sits within the stated cap.

Lloyds charges 85p per £100 through an Immediate Deposit Machine. On £60,000, that is £510, plus the £120 standard account fee: £630. Paying the same cash over the counter would cost £1.60 per £100 before the account fee, so access to the machine matters.

NatWest charges 95p per £100 of cash and a 95p manual item charge. Five monthly deposits therefore cost £52.25: £47.50 by value and £4.75 by item. Add the £17.50 monthly electronic-payment cost and the annual total is £837.

The obvious practical point is to count deposits, not just cash value. Monzo's flat £1 charge rewards fewer, larger deposits, subject to its limits. Percentage tariffs barely care whether the same value arrives in five bags or ten, although item charges and operational limits still can.

Cash also creates a non-price question. Starling says it does not support businesses that regularly make significant cash deposits, even though it publishes deposit limits. A tariff calculation does not override eligibility or a bank's risk decision.

Foreign exchange can dwarf the account fee

The international profile sends £24,000 of sterling-equivalent euro payments over the year.

Starling publishes a 0.4% conversion fee and a 30p local-network charge for euro transfers to France. The conversion cost is £96 and the 24 delivery charges add £7.20, giving £103.20.

Lloyds publishes a 2.6% FX margin for payments of £25,000 or less and a £5 charge for a basic euro SEPA transfer. The FX component is £624, the transfer charges are £120 and the standard account fee is £120. Total: £864.

Monzo's linked fee document gives an outbound fixed-fee range of 50p to £2.68 and a variable range of 0% to 1.3%. It shows the exact fee and exchange rate in the app before the payment is sent. Across our 24 payments, that produces a public range of £12 to £376.32. The pages do not reveal the actual currency-specific quote for this profile, so we have left it unranked rather than using the ceiling as though it were the likely bill.

NatWest charges no transaction fee for a SEPA transfer made through online or mobile banking. Its domestic automated items still add £210. NatWest says the FX margin on its core payment currencies will not exceed 2.65%, which puts the published ceiling at £846 for this profile, but the live rate is only confirmed when the payment is processed. We therefore show £210 plus the actual FX margin, not a false exact total.

The gap between £103.20 and £864 is not driven by the monthly account fee. It is mainly FX pricing. If you pay overseas suppliers, compare a realistic year's currency value and transfer count. Comparing “free banking” badges is theatre.

Promotional banking can reverse the first-year result

Lloyds waives its £10 monthly account fee for the first 12 months for a first-time Lloyds Business Account. On our profiles, that reduces the digital first year from £120 to £0, the cash profile from £630 to £510, and the international profile from £864 to £744. The transaction and FX charges still apply.

NatWest gives eligible start-ups two years of free service charges. It also advertises two years of free everyday banking to qualifying businesses with turnover up to £2 million that switch through the full Current Account Switch Service. International payments, Bankline, unarranged overdrafts and extra services sit outside the offer.

That means the modelled domestic charges can be £0 during a qualifying NatWest offer period. The international profile still pays the quoted FX margin.

Promotions are useful. They are not a permanent tariff. Compare the first eligible year and the first normal year side by side, then decide whether switching again is worth the admin.

Eligibility is part of the price comparison

The four accounts do not accept exactly the same customers.

• Monzo supports UK sole traders and directors of active limited companies by shares, but excludes partnerships, LLPs, charities and several industries.
• Starling requires the relevant owners and directors to be UK residents and publishes restricted sectors and cash-use limits.
• Lloyds accepts sole traders and limited companies; its current standard application criteria include annual turnover of £3 million or less.
• NatWest separates start-ups from established businesses and applies offer-specific turnover and switching conditions.

An ineligible account has no useful annual price. Check legal form, ownership, turnover, sector, client-money use, cash pattern and overseas activity before spending time on the application.

Price your own account before switching

Export 12 months of bank activity and count the things the tariff counts:

1. Electronic credits and debits.
2. Cash value and number of deposits, split by branch, machine, Post Office or PayPoint.
3. Cheques and counter transactions.
4. International payments by currency, value and destination.
5. Extra cards, user access, accounting integrations or paid plan features.
6. Overdraft usage, returned items and urgent payments.

Run the figures twice: once using any promotion you qualify for and once using the standard tariff that follows it. Add the value of bundled software only if you would otherwise pay for the same product. A list price is not a saving when you did not want the thing.

Put the resulting monthly charge into your cash forecast. The cash runway calculator is useful for stable monthly spending; the cash-buffer study explains why irregular costs and delayed receipts need a month-by-month view. If rapid growth is stretching payment timing, the working-capital gap model is the closer comparison.

What this comparison leaves out

We compared published charges, not service quality, app reliability, branch access, support, lending decisions, savings interest, cashback, card acceptance, accounting software or the cost of changing bank. We did not open accounts, request personalised quotes or make transactions.

The totals exclude VAT where none is stated, interest earned, overdrafts, cash withdrawals, card spending abroad, correspondent-bank deductions and fees charged by a recipient's bank. FX calculations use the sterling payment value and provider margin only. They do not predict the market exchange rate.

Prices and eligibility can change. This collection was checked on 27 October 2026 for UK business accounts. Recheck the provider's current tariff and the final quote before acting.

Frequently asked questions

What is the cheapest business bank account in the UK?

There is no defensible universal answer. Starling and Monzo Lite cost £0 in our digital profile. Monzo cost least in our defined cash profile, while Starling had the lowest fully calculable cost in our euro-supplier profile. Change the activity or eligibility and the order can change.

Are free business bank accounts really free?

They can be free for a narrow pattern of use. Cash deposits, international transfers, FX conversion, extra users, paid features, urgent payments and overdrafts can add charges. Read the transaction tariff, not just the monthly-fee line.

How much does it cost to pay £5,000 of cash into a business account?

In our five-deposit monthly profile, the charge ranged from £5 at Monzo to £52.25 at NatWest before NatWest's electronic-payment fees. The route, deposit count, account type and limits matter, so this is not a quote for every £5,000 deposit.

Should I choose a bank account for an introductory offer?

Only after pricing the standard tariff. Lloyds and NatWest promotions materially reduce our first-year figures, but the normal charges return after the offer. Switching has a time cost even when the switching service moves the payments.

Why is the full NatWest international cost not shown?

NatWest says online and mobile SEPA transfers have no transaction fee and caps its margin for core payment currencies at 2.65%, but the live rate is only confirmed when a payment is processed. The public information supports a ceiling, not an exact quote.