Your guide to business bank account monthly fees

If you’re opening a business bank account, there are different fees you might need to pay. 

Some business bank accounts charge one-time account fees that you only pay when you first open the account. But there’s also a range of fees that you need to pay regularly. This guide focuses on those ongoing fees.

Key takeaways

• Business bank account monthly fees vary between free for a basic account to paying a monthly fee in exchange for enhanced features and services

• The cheapest account isn't always the best value, consider transaction charges and cash deposit fees too

• Choosing an account that matches your business's size now and future growth plans could reduce your overall banking costs

Business bank account fees

Below are some of the regular fees you can expect to pay on a business bank account.

• Monthly account fees: Many banks charge a monthly fee for managing the account, although some waive this fee for the first 12 months or so

• Electronic payment fees: Some banks charge fees for each electronic payment into or out of the account 

• Standing order fees: You might pay a fee for each standing order you have

• Fees for paying in cash or cheques: Banks commonly charge a fee for depositing cash or cheques into business accounts

• BACS or CHAPS fees: BACS payments are often free or included with many business accounts, whereas CHAPS payments are more commonly subject to a fee

• Fees for sending money abroad: You are usually charged if you send money to overseas bank accounts 

• International payment receiving fees: In addition to charges for sending money abroad, some banks also charge to receive international payments.

• Foreign exchange fees: If you use your bank card to spend overseas, foreign transaction fees of around 2% to 3% often apply 

• Cash withdrawal fees: You might also incur fees for withdrawing cash at an ATM on your bank card, whether at home or abroad

• Overdraft fees and interest: If your account includes an overdraft, you may pay arrangement fees, renewal fees and interest on the amount you borrow

Fees vary between different business bank accounts and not all of the above apply to every account out there - so it’s crucial to carefully read the terms and conditions, along with all information about fees.

How can you avoid bank fees on a business account?

It can be difficult to avoid all ongoing fees on a business bank account. But you can keep them to a minimum by shopping around and comparing a range of different accounts.

Think carefully about the type of transactions your business makes, such as UK bank transfers or cash withdrawals from an ATM.

Some business bank accounts let you carry out certain transactions for free but charge for others. By considering how you will use an account and comparing your options, you might find one that’s free for the types of transactions you need to make.

Also, think about the volume of transactions your business makes each month. Some accounts allow a certain number of free bank transfers or payments each month but charge a fee once you’ve reached that limit. If you can stay below the cut-off point, you won’t need to pay.

Alternatively, you might find a business account that offers unlimited transactions each month in return for a monthly fee. If your business makes a high number of transactions, this type of account could prove cheaper. 

On the other hand, if your business only carries out a handful of transactions each month, an account with no monthly fee but charges per transaction could be more suitable for you. 

How to find a free business bank account

The key to finding a free business bank account is to compare what’s available in detail. Check whether there’s a monthly fee – or whether your bank waives this fee for an initial period. Also, look at whether there are fees for transactions. 

Most accounts charge for certain types of transactions, like cash payments, but you might be lucky enough to find an account free for all the transactions your business needs to make.

In conclusion

Monthly fees attached to business bank accounts can vary significantly between providers, so it's important to look beyond the headline cost when comparing accounts.

Consider the full range of charges, including:

• Transaction fees

• Cash deposit costs

• Overseas payment fees

• Any features included with the account

Choosing a business bank account that matches your banking habits and budget can help you keep costs under control while ensuring you have the services your business needs.