BusinessCalculator.co.uk

Business Bank Account Cost Calculator

Add up what your business bank account actually costs each month and each year, split by charge type.

How many payments your plan includes before charges start.

Advanced options

Estimated annual banking cost

£150.00

Account fee
£9.50 / month
Transfers (10 chargeable)
£3.00 / month
Total monthly cost
£12.50

What this means

Your account costs about £12.50 a month, or £150.00 a year. Banking costs are usually invisible because they leave the account in small amounts. Seeing the annual figure is what makes it worth reviewing — particularly if most of the cost comes from one category, such as cash handling.

Quick answers

How much can a business bank account cost?
Costs range from effectively free to well over £30 a month depending on the provider, transaction volume and how much cash you pay in. A cash-handling business can easily pay several hundred pounds a year in deposit fees alone, on top of any monthly charge.
Should a limited company have a separate bank account?
Yes. A limited company is a distinct legal entity, so its money must be kept separate from the director's personal finances. A sole trader is not legally required to have a separate account, but it still makes bookkeeping and tax return preparation much simpler.
Can I use a separate account for VAT or tax money?
Yes, and many small businesses do. Moving the VAT or tax portion of each sale into a separate account as it comes in stops that money accidentally being spent, and it costs nothing extra beyond any transfer fee.
Do bank transfer charges matter?
They can add up if your plan only includes a limited number of free transfers a month. Ten extra transfers a month at 30p each is £36 a year — small compared with cash handling fees, but still worth including in your total.

Check whether your banking costs still suit your business

Banking fees can change as transaction volume, cash deposits, foreign payments and general account usage change.

An account that suited the business a year ago may not be the best value for how it now receives and pays money.

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How we calculated it

Chargeable transfers = transfers made − any free allowance, so only the excess is charged. Cash deposit cost = amount deposited × the percentage fee. International cost = number of payments × the fee per payment.

Monthly total = account fee + transfer cost + cash deposit cost + international cost + other charges. Annual cost is the monthly total × 12.

Assumptions

A typical month, with the same pattern repeating through the year. Introductory free periods, overdraft interest, foreign exchange margins and one-off charges are not included.

How this calculator works

UK business accounts are priced in different ways. Traditional banks often charge a monthly fee plus a small amount for each electronic payment and a percentage for cash paid in. App-based providers frequently have a free or low-fee tier with charges for extras such as same-day payments or international transfers. Whether one is cheaper than the other depends entirely on how you bank — this calculator does not compare named providers, since tariffs change and no verified comparison data is built in.

Cash-heavy businesses are usually the most affected: a 0.7% charge on £8,000 of takings a month is £672 a year on its own. Businesses paid mainly by bank transfer may find the monthly fee is nearly the whole cost. If you also take card payments, the card processing fee calculator covers that side of the cost separately.

Worked examples

A small building firm pays a £9.50 monthly account fee, makes 60 transfers a month with 50 included free, and pays 30p for each extra. That is 10 chargeable transfers costing £3.

Monthly cost is £12.50 and the annual cost is £150. If the firm also paid in £4,000 of cash a month at 0.7%, that would add £28 a month — £336 a year — making cash handling more than twice the cost of the account itself.

Key terms explained

Cash deposit fee
A percentage charge applied to cash paid into a business account, reflecting the cost to the bank of handling and processing physical notes and coins.
Free transfer allowance
The number of electronic payments included in a plan before per-transaction charges apply. Exceeding it means paying a fee on every additional transfer.

Common mistakes

  • Judging cost from the monthly fee alone

    A £0 monthly fee can still be expensive if cash deposit or international payment charges are high. Add up all the charge types, not just the headline fee, before deciding an account is cheap.

  • Not checking what happens after an introductory offer ends

    Many free or discounted periods run for 12 to 24 months and then move onto standard pricing. Build the ongoing cost into your comparison, not just the introductory rate.

  • Ignoring cash handling costs for a cash-heavy business

    A percentage fee on cash deposits can dwarf the monthly account fee for a business that takes a lot of cash. Model your actual monthly cash takings, not just the standard charges.

  • Mixing personal and business banking

    Using a personal account for business money makes bookkeeping harder and can breach the bank's own terms. It also blurs which bank charges are tax deductible business expenses.

Common questions

Are business bank accounts free in the UK?

Some providers offer a free tier, usually with limits on transactions, cash deposits or extra features. Most established banks give an introductory free period of 12 to 24 months and then move you to a monthly fee, so it is worth checking what happens at the end of the offer.

Do I legally need a business bank account?

A limited company does need its own account, because the company is a separate legal entity from you. A sole trader can legally use a personal account, though many banks' personal terms prohibit business use and keeping business money separate makes bookkeeping far easier.

Are bank charges tax deductible?

Business bank charges are normally an allowable expense against your business profits. Personal banking costs are not, which is another reason to keep the two separate.

Why is paying in cash so expensive?

Handling, transporting and counting notes and coins costs the bank money, so it is usually charged as a percentage of the amount deposited. If you take a lot of cash, that percentage is often the single largest part of your banking cost.

How do international payment fees affect the total cost?

Each international payment usually carries its own fixed fee, separate from the exchange rate margin, so frequent overseas payments or receipts can add a noticeable monthly cost. Add the number of international payments and the fee per payment to see the effect on your total.

What fees should I look out for on a business account?

Check the monthly account fee, the number of free transfers included and the fee for extra ones, the cash deposit percentage, and any charge for international payments or additional cards. Together these determine the real annual cost far more than the headline fee alone.

Last reviewed: 7 September 2026. This calculator is information only and is not tax, accounting or financial advice.