Should I switch my business account?
Written by Robert Bester, Consumer Finance Expert Robert has been a writer for six years, specialising in consumer finance and the UK lending market. Concentrating on consumer credit products, Robert writes informative articles that help customers manage their personal finances efficiently.
1st March 2021
3 minute read
Have you been thinking about switching your business bank account? Whilst you might be happy with your current bank account, you might find that your introductory period is coming to an end, or there are perks with a different provider you’re missing out on.
Switching is now easier than ever using the current account switching service, so if you’re a small to medium sized business and would like a change, there’s nothing stopping you. Have a read of our short guide to help you organise the switch and find the best business bank account for you.
The benefits of switching your business account
- Find a business account provider to suit you
- Get a new introductory rate
- Get exclusive perks or benefits
- Go with a recommended provider
There are several benefits to switching your business bank account, not least that you will be able to get a new introductory period that should allow you to avoid monthly fees for a little while longer. This will come in particularly handy for small businesses, sole traders and start ups who need to keep costs low.
In addition, you will also be able to take advantage of any perks or benefits attached to being a customer of a new business account provider, or even find a bank that is more suited to your needs. It’s worth doing your research to see whether a new bank might be a better fit, especially if your priorities have changed based on the changing needs of your business.
For example, you might require a bank with a better app if you need to have access to your account on the fly, or you might simply need access to better financial products through a high street bank with a wider range of products.
When should I make the switch?
Ideally, you should make the switch prior to your introductory period coming to an end, so you can avoid paying any monthly account fees. If you can time it right, you should be able to switch to a new business account with a new introductory period to avoid having to pay any account fees.
You should be able to make the switch at any time, as long as you haven’t run up any associated debts with your business account and you have the permission of your existing account provider. Since you can use the Current Account Switching Service, it means that you should be able to switch your account within 7 working days, just like a personal current account.
Can I use the Current Account Switching Service?
Unlike the guidelines for current accounts, there are certain stipulations for switching your business account, that are more to do with the size of your business. If you fit the criteria you should be able to use CASS, but otherwise you will have to organise the switch yourself. To use the service, you must have:
- Fewer than 50 employees
- Annual turnover not exceeding £6.5 million
As a small business, sole trader or start up, you’re more likely to fit the criteria listed above, which means you can quickly and easily switch business accounts whenever you need to.
However, you may have to double check with your current provider that they’re happy for you to switch. Circumstances where you might not be able to switch straight away include owing money on a business overdraft or having outstanding fees or charges that you still need to pay.
Find out more about the Current Account Switching Service here.
What to look out for when switching to a new business account
If you’re in the position where switching business accounts is a distinct possibility, you might want to start browsing for the right account for you. When you start comparing business bank accounts, make sure you look out for the following points:
- Monthly fees – most business accounts will charge monthly fees for having the account, so it’s worth comparing the price and whether you’re happy to pay for your bank account
- Introductory period – especially popular with start up accounts, an introductory period allows you to have a certain amount of time without paying monthly fees, which is ideal if you want to keep costs low
- Overdraft – an overdraft facility can come in handy if your business has an odd expensive month and you need to cover costs, but will almost certainly come with a daily or monthly fee. This means you should plan to only use your overdraft as a buffer rather than a permanent way of borrowing
- Cashback – you can earn cashback on your annual turnover with certain accounts, which leads to a nice bonus by the end of the year
- Exclusive perks – many business accounts will offer perks that are exclusive to the provider, allowing you to benefit as a business owner. Whether that’s discounts that you can use or services you can take advantage of, depending on your industry
- Fees or charges – there are always fees or charges associated with having a business account that you will need to cover, so it’s worth comparing these to see if one provider charges less
Start comparing business accounts
Are you ready to make the switch? Have a look at the business accounts on our comparison tables and discover the best business account providers for you. Good luck!