Last reviewed: 09 Jun 2026 | Sources: CMA Open Data API, FCA Register, provider published rates
TL;DR: The permanently free business bank accounts in the UK with no monthly fee and no electronic transaction charges are Starling Business, Nationwide FlexBusiness, and Mettle (NatWest) - all FCA-authorised banks with FSCS protection. CMA9 banks offer 12 to 18-month introductory free periods before reverting to standard fees of £7.00 to £8.50/mo.Key facts: free business bank accounts
- Starling Business and Nationwide FlexBusiness are permanently free with no monthly fee and no electronic payment charges - both are FSCS-protected FCA banks
- Mettle (NatWest) is permanently free and includes FreeAgent accounting software at no additional cost for qualifying customers
- Monzo Business offers a free plan with a paid Pro plan at £5/mo for additional features
- Tide is free with a 20p per electronic transaction charge - e-money institution, not FSCS protected
- CMA9 banks including NatWest and Santander offer 18-month free periods before reverting to standard monthly fees of £7.50/mo
What is a free business bank account
A free business bank account is a business current account with no monthly maintenance fee. Some free accounts also include free electronic payments; others are free in terms of the standing monthly charge but apply per-transaction fees for electronic payments, cash handling, or other services.
The distinction between truly free accounts and introductory free accounts is important. Truly free accounts - Starling Business, Nationwide FlexBusiness, and Mettle - have no monthly fee on an ongoing basis regardless of how long the account has been open. Introductory free accounts at CMA9 banks (NatWest, Santander, Barclays, HSBC, Lloyds) waive the monthly fee for a defined period - typically 12 to 18 months for new business account holders - before reverting to the standard monthly charge.
For a business planning to use its account for more than 18 months (which is most businesses), the total cost over three years of a truly free account versus a CMA9 account after the free period ends is substantial. At £7.50 per month after an 18-month free period, a CMA9 account costs £270 over three years. A permanently free account costs £0.
Free business bank account options in the UK
| Provider | Monthly fee | Free period | E-payment | FSCS | Key feature |
|---|---|---|---|---|---|
| Starling Business | Free | Permanent | Free | Yes | Permanently free FCA bank. No transaction fees. |
| Nationwide FlexBusiness | Free | Permanent | Free | Yes | Only permanently free CMA9 bank. Branch access. |
| Mettle (NatWest) | Free | Permanent | Free | Yes | Free. FreeAgent included. NatWest licence. |
| Monzo Business | Free | Permanent | Free | Yes | Free plan. Paid Pro at £5/mo. FSCS. |
| Tide | Free | Permanent | 20p | No | Free account. E-money. 20p per transaction. |
| NatWest (CMA9) | £7.50/mo | 18 months | 35p | Yes | 18-month free period then £7.50/mo. |
| Santander (CMA9) | £7.50/mo | 18 months | 30p | Yes | 18-month free then £7.50. Switching incentive. |
Source: CMA Open Data API and provider published rates, 09 Jun 2026. Free periods at CMA9 banks apply to new account holders only. Verify eligibility directly.
Truly free versus introductory free: cost over time
The table below shows the total three-year cost of the main business account options, assuming a business makes 50 electronic payments per month.
| Provider | Monthly fee | Free period | Txn fee | 3-year cost (50 txn/mo) |
|---|---|---|---|---|
| Starling Business | Free | Permanent | Free | £0 |
| Nationwide FlexBusiness | Free | Permanent | Free | £0 |
| Mettle (NatWest) | Free | Permanent | Free | £0 |
| Tide | Free | Permanent | 20p | £360 |
| NatWest (CMA9) | £7.50/mo | 18 months | 35p | £918 |
| Lloyds (CMA9) | £7.00/mo | 12 months | 27p | £1,026 |
Three-year cost calculation: monthly fee x months after free period + (50 transactions x transaction fee x 36 months). Source: CMA Open Data API, 09 Jun 2026. Excludes cash handling, chargeback, and other ancillary fees.
Free business bank account: what is and is not included
Free business bank accounts differ in what is included within the zero monthly fee. The key distinctions are:
Electronic payment fees: Starling Business and Nationwide FlexBusiness include unlimited free electronic payments (Faster Payments, BACS, direct debits, standing orders). Tide charges 20p per electronic payment. Monzo Business free plan includes a monthly allowance of free transactions before charges apply. CMA9 banks typically charge 27p to 35p per electronic payment after the free period.
Cash handling: All accounts charge for cash deposits and withdrawals above defined limits. Digital-first accounts have limited or no branch cash access. Nationwide FlexBusiness provides branch cash access as the only permanently free CMA9 bank with physical branches.
Accounting software: Mettle (NatWest) includes FreeAgent at no cost for qualifying customers. FreeAgent has a standard retail price of £19/mo, making Mettle the highest-value free account for sole traders and small limited companies using FreeAgent for Self Assessment or MTD.
Interest on balances: Allica Bank pays up to 4.33% AER on business current account balances but is not free - it charges for electronic payments. Starling Business does not pay interest on standard current account balances. Mettle pays no interest. For businesses holding significant balances, a paid account with interest may generate more value than a free account without it.
Is a free business bank account right for every business
A permanently free business account is the right choice for most early-stage businesses and sole traders with straightforward banking needs - receiving customer payments, paying suppliers by electronic transfer, and managing direct debits. The core functionality of Starling, Nationwide, and Mettle is identical to a paid CMA9 account for these use cases.
A paid CMA9 account becomes more relevant when: the business requires an overdraft facility (digital-free accounts do not offer overdrafts); the business handles significant cash volumes requiring regular branch deposits; the business needs a relationship manager for complex banking queries; or the business is approaching a funding round and a high-street bank relationship is preferred by investors or lenders.
A common approach is to open a free digital account at formation and switch to a CMA9 account when lending or more complex banking requirements emerge. The Current Account Switch Service makes this transition straightforward with no fee and a seven-working-day completion window.
Free business account with no transaction fees
For businesses making a high volume of electronic payments, the transaction fee is more significant than the monthly fee. A business making 200 electronic payments per month at Tide's 20p charge incurs £40 per month in transaction fees alone - more than the monthly fee at most CMA9 banks. For high-transaction-volume businesses, Starling Business and Nationwide FlexBusiness offer the lowest total cost as both have no monthly fee and no electronic transaction fee.
Starling Business does not charge for: incoming or outgoing Faster Payments, BACS credits, direct debits, or standing orders. There is no minimum balance requirement. There is no charge for maintaining the account during periods of low activity. Fee data sourced from the CMA Open Data API as at 09 Jun 2026.
Fee-free business account versus interest-bearing account
Choosing between a fee-free business account and a paid account that pays interest on balances depends on the average balance the business holds. Allica Bank pays up to 4.33% AER on business current account balances but charges for electronic payments. At 4.33% AER, a business holding £50,000 would earn approximately £2,165 per year in interest. If that business makes 100 electronic payments per month, the interest income substantially exceeds the transaction costs.
For businesses with lower average balances or higher transaction volumes, the maths typically favours a free account. A business holding £5,000 on average earns £216 per year at 4.33% AER. If it makes 100 payments per month at 30p, it pays £360 per year in transaction fees - more than the interest income. In this scenario, Starling Business (free account, no transaction fees, no interest) produces a better financial outcome.
Free business account: cash deposit and withdrawal limits
The absence of a monthly fee does not mean all services are free. Cash handling is the most common additional charge on free business accounts. Starling Business allows cash deposits at Post Office branches with a £3 fee per deposit up to £1,000. Above £1,000 the fee is 0.70% of the deposit amount. Nationwide FlexBusiness supports branch cash deposits through its branch network. Mettle (NatWest) does not support cash deposits.
For businesses with regular cash income - retail traders, market traders, hospitality businesses - a permanently free account with limited cash facilities may be less practical than a paid CMA9 account with full branch cash handling. The monthly fee at a CMA9 bank may be justified by the operational convenience of regular branch cash deposits. Businesses should calculate total cost including cash handling charges, not just the headline monthly fee.
Accounting software value: Mettle and FreeAgent
Mettle (NatWest) is a permanently free business account that includes FreeAgent accounting software at no additional cost for qualifying customers. FreeAgent has a standard retail price of £19 per month including VAT. For a sole trader or small limited company that would otherwise pay for FreeAgent separately, Mettle provides equivalent value to a £19/mo account at zero cost, with the addition of FSCS protection and NatWest banking infrastructure.
FreeAgent supports Self Assessment, corporation tax, VAT returns, Making Tax Digital, payroll, and invoicing. The open banking connection between Mettle and FreeAgent imports transactions automatically. For sole traders preparing for MTD ITSA from April 2026, the Mettle plus FreeAgent combination is the most cost-effective fully integrated option in the UK market.
Frequently asked questions
What is the best free business bank account in the UK?
Starling Business and Nationwide FlexBusiness are the most comprehensive permanently free business accounts - both have no monthly fee, no electronic transaction fees, and are FCA-authorised banks with FSCS protection. Mettle (NatWest) is also permanently free and adds FreeAgent accounting software at no cost for qualifying customers. Fee data sourced from the CMA Open Data API as at 09 Jun 2026.
Are free business bank accounts FSCS protected?
It depends on the provider. Starling Business, Nationwide FlexBusiness, and Mettle are FCA-authorised banks with FSCS protection up to £85,000. Monzo Business free plan is also FSCS protected. Tide is an e-money institution and is not FSCS protected - funds are safeguarded in segregated accounts but the recovery process in a failure differs from FSCS.
Do free business accounts charge for transactions?
It varies. Starling Business and Nationwide FlexBusiness include unlimited free electronic payments with no per-transaction charge. Tide charges 20p per electronic transaction on its free account. Monzo Business free plan includes a monthly allowance before charges. CMA9 banks charge per transaction after their free introductory period ends.
How long are free periods at CMA9 banks?
NatWest and Santander offer 18-month free periods - the longest among CMA9 banks. Barclays, HSBC, and Lloyds offer 12-month free periods. Eligibility typically requires the business to be a new customer that has not held an account at the same bank within the past 12 to 24 months. After the free period, standard monthly fees apply - typically £7.00 to £8.50 per month depending on the provider.
Can a sole trader open a free business bank account?
Yes. All permanently free business accounts accept sole trader applications. Starling, Nationwide, Mettle, Monzo, and Tide all accept sole traders. Requirements include photo ID, proof of address, and an HMRC Unique Taxpayer Reference. There is no minimum trading period or minimum turnover requirement for a standard free business current account at any of these providers.
