Small Business bank accounts 21 April 2003 at 10:12AM in Small Biz MoneySaving 66 replies 9.9K views

Legacy_user

I'm feed up with paying for business banking when there's a bit of money in the account.

What's the options and recommendations for the small business bloke like me?

cheers

markedgar

Paul,

Unless I'm mistaken, what law exists that states you must have a business bank account for business purposes?

Could a regular account do (whether or not it is the same as your regular current account)?

;)Mark

MSE_Martin

The problem isn't the law, the problem is the banks. If they notice the account is being used for commerical purposes then they will stop it. However if you are a small biz which is incorporated (ie a ltd com) then you need a seperate bank account for the business.

There are many which pay interest and no fees. However the British Bankers association and Moneyfacts have a good comparison engine for this http://www.moneyfacts.co.uk/mfbaf/root.asp which should help find you a better account.

Martin

dguppy

if you do not write many cheques then the Nationwide do an account called "Business Investor Account" that has no monthly fees.

It is design primarily as a business savings account, but allows you to write six cheques per month, if you write more than this they make a charge of £2 per cheque so it no good for someone who writes a lot of cheques.

I believe there may also be limitations on making BACS transfers (I am not sure), nut I know you can receive BACS payments.

You are also limited to paying in a maximum of 10 cheques per day.

The other advantage is that they pay interest on the balance (currently 1.25%), which is better than a kick in the teeth.


So this account may be of interest to small businesses who do not need overdraft facilities or write lots of cheques.
My mum opened her account 7 years ago, so it may not be available for new applications now, but might be worth checking out if you have a suitable profile.

__________________
Darren Guppy
Golf Tee Warehouse
www.golfteewarehouse.co.uk
For your golf tee requirements

smiffy

as a small business I use Alliance and Leicester. They charge a std £10 a month irrespective of how many cheques I write of how much money is deposited or withdrawn. Its ideal for my as Im based in a small village and can do all the banking over the phone, net and the good old postoffice.

Murphy_The_Cat

the banks seem VERY reluctant to offer any sort of decent interest rate on 'business' savings.

Have a look at the HICA account from AMConline.co.uk.
it'll give you 3.25 % if you have £5000 or over but it drops to 2.5% if the balance falls under £5000.
The minimum opening balance is £5000.
They also give you a chequebook and allow you 15 cheques per quarter.

You may not have heard of AMC bank before but don't be afraid as it is also know as the Agricultural Mortgage Corporation and is owned by Lloyds TSB.

ANYONE can open an account here, incl Limited Companies, Clubs, Societies, Trusts or individuals.

While 3.25% is not very generous for an individual, nearly all of the best buy savings accounts exclude businesses/limited companies.

MTC

System

I have a ltd co a get free banking with Abbey National. Bank a/c is called 'Free banking forever' & it pays interest on the current account. There are limitations - check if it is OK for you.

webmasterpolo

I know of someone (naming no names) who has a business account where he is charged 55p per cheque that he cashes.  

So he by passes this by paying the cheques into a personal account, then writing one cheque into the buisness account - hence only paying one 55p charge instead of 50.  

Been doing it for a couple of years now and his bank haven't done a thing.  He is the director and majority share holder of the company if this makes a difference.

System

Paul,

There is a lot of free banking on offer at the moment. Shop around and even consider moving banks.

Have a chat with your Business Link in England, Enterprise Company in Scotland, or Connect in Wales and ask their advisors - all free support I hasten to add.

Let the money work for you..........not for the bank. What about transferring balances into a high interest earning account - a number 2 business account if you will and see if charges can be reduced this way. Look at GIRO bank if you are eligible......

Link here for you

http://www.bizzit.co.uk/links/enterprise/

WP8800

Hi, I have had my own business now for 8 years.

I suffered with high bank charges, but then eventually went to Barclays- stop screaming- i know they are one of the 'big 4' but i have a fixed quarterly fee of £100 no matter what i do with cheques etc.

However, I feel a good relationship well outways cost. I will never change until my small business manager leaves. He is the best, and saves me over £100 a quarter.

Hey, I hate paying when I dont have too, but remember, you may need a friendly face in business one day, and a bank manager is a good one to have!

johnllew

I know of someone (naming no names) who has a business account where he is charged 55p per cheque that he cashes.  

So he by passes this by paying the cheques into a personal account, then writing one cheque into the buisness account - hence only paying one 55p charge instead of 50.  

Been doing it for a couple of years now and his bank haven't done a thing.  He is the director and majority share holder of the company if this makes a difference.

Putting business cheques into your private account can be a dangerous idea. You may get into the habit of not transferring it all to the business account and keeping some of it for yourself. Even if you don't, if the Revenue ever investigate your affairs, they will be perfectly entitled to demand sight of your private bank account details because of the business transactions in it.