Choose and manage a business bank account

The type of account/s you choose will depend on your business' needs. 

Depending on your business, you may require:

• a business current account for daily transactions, payments and receipts - eg one that pays interest on credit balances (though not all banks offer this)
• an instant access deposit account for cash sums not needed for daily operations but can be accessed as required
• a term deposit account for funds not needed immediately or at short notice
• a foreign currency account if you trade overseas and if you receive and make payments in foreign currency
• a loan account for any loans you take out
• a merchant account to accept and process debit and credit card transactions - see using payment cards for your business and accepting online payments.

Compare accounts

Before choosing a business account, you should compare the different services and costs. For example:

• facilities - eg automatic money transfers, debit and credit cards or telephone or internet banking
• interest rates - particularly if you're usually in credit
• overdraft charges - particularly if you're often overdrawn
• monthly fees
• additional account charges - eg for statements, cheques and cash payments
• additional services - eg small-business advice

UK Finance provides guidance on opening a business current account .

Improving your current deal

You should review your bank accounts at least once a year and compare them with others available.

If you compare your current bank's service with others on the market you will know how competitive your deal is, or if there are better options. But you don't have to switch banks to improve your deal, you could instead see if you can agree better terms with your existing bank. If you have a history as a good customer, your bank may be willing to negotiate with you.

Using more than one bank

You could also consider using different banks to fulfil different financial requirements. This allows you to pick and choose the most beneficial parts of various deals.

However, it may also be more complicated and time consuming to keep track of your financial affairs and to build a relationship with each bank.