Best business bank accounts for sole traders
Not sure which business bank account is right for you as a sole trader? Here's a plain-English comparison of the main options - from free app-based accounts to multi-currency tools - so you can find the one that fits how you work.
9/9/20264 min read
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Best business bank accounts for sole traders
You're not legally required to have a separate business bank account as a sole trader - but most accountants recommend it, and for good reason. When your business income and personal spending are mixed together, working out your profit at tax time becomes much harder than it needs to be.
The good news is that several genuinely capable free options exist. Here's a rundown of the main accounts worth considering.
We cover the case for a separate account in more detail in our post on whether you need a business bank account as a sole trader.
What to look for
For most sole traders, the key things to consider are:
• Monthly fee - several free options exist, so there's no need to pay for basic banking
• FSCS protection - full UK banks (Starling, Monzo) protect deposits up to £120,000. E-money institutions like Wise safeguard funds differently - your money is ring-fenced but not covered by FSCS directly
• Accounting software integration - does it connect to the software you use or plan to use?
• MTD readiness - from April 2026, sole traders over £50,000 gross income need MTD-compatible record keeping. Some accounts include this built in
• International payments - if you invoice overseas clients, a multi-currency account may save you significantly on exchange rates
Starling Bank
Starling is a fully licensed UK bank with no monthly fee and no charges on domestic transfers. You get a UK sort code and account number, a Mastercard debit card, real-time notifications, and spending categories. Deposits are FSCS protected up to £120,000.
It integrates with Xero, QuickBooks and FreeAgent, making it a solid choice if you already use one of those for your accounts. Invoicing, receipt matching and a Making Tax Digital tool are included free. Submitting VAT returns needs the paid Accounting Plus add-on (£7 a month until April 2027, then £14).
Starling doesn't have a Sage bank feed, which is worth knowing if your accountant uses Sage. Cash deposits are accepted but come with a fee.
• Monthly fee: free
• FSCS protected: yes, up to £120,000
• MTD compatible: free built-in MTD for Income Tax tool
• Best for: UK-based sole traders who want free, reliable banking with strong accounting integrations
Monzo Business
Monzo Business offers a free Lite tier with standard UK banking features. The Pro tier at £9/month adds tax pots - a feature that automatically sets aside a percentage of incoming payments for your tax bill - plus invoicing and deeper accounting integrations.
Monzo is a fully licensed UK bank, so deposits are FSCS protected up to £120,000. It integrates with Xero, QuickBooks, FreeAgent and Sage on the Pro plan.
The tax pot feature is genuinely useful for sole traders who struggle to set aside money for Self Assessment - it does the discipline for you automatically.
• Monthly fee: free (Lite) / £9/month (Pro)
• FSCS protected: yes, up to £120,000
• MTD compatible: built-in MTD tools on all tiers
• Best for: sole traders who want tax pots to help manage their Self Assessment bill
Tide
Tide is built specifically for sole traders and small businesses. The free plan includes invoicing built directly into the banking app - a genuine differentiator, since most other accounts leave invoicing to separate software (note that the free plan includes 5 free bank transfers a month, then charges 20p each, which can add up if you make frequent payments - worth factoring in if you pay multiple suppliers regularly). It also integrates with Sage, Xero, QuickBooks and FreeAgent.
Tide is provided through ClearBank, a fully licensed UK bank, so your deposits are FSCS protected up to £120,000. The free plan includes some transaction fees on transfers, so it's worth checking the current fee schedule if you make frequent payments.
• Monthly fee: free basic / paid tiers from £12.49/month
• FSCS protected: yes, up to £120,000 (via ClearBank)
• MTD compatible: yes
• Best for: sole traders who want invoicing built into their bank account, or who use Sage
Revolut Pro
Revolut Pro is a business account for sole traders and freelancers that sits inside the personal Revolut app. There's no monthly fee. Instead you pay a fee on card payments you take from customers, from 1% + 20p for UK consumer cards online. Invoicing and payment links are included, and it handles more than 30 currencies, which helps if you have overseas clients.
Revolut became a fully licensed UK bank in March 2026. Pro balances are FSCS protected up to £120,000 once your account has moved over to the new bank, so check your status in the app. The limit is shared with your personal Revolut balance. Pro doesn't connect to accounting software, so you'd need to export your transactions.
You can read more on our Revolut Pro page.
• Monthly fee: free, with a fee on card payments you take
• FSCS protected: yes, up to £120,000 once your account has moved to Revolut's bank
• MTD compatible: no
• Best for: sole traders who already use Revolut and want to take card payments
Wise Business
Wise Business isn't a bank account in the traditional sense - it's a multi-currency account that lets you hold, send and receive money in over 40 currencies at the mid-market exchange rate. If you invoice clients in euros, dollars or other currencies, Wise can save you significantly compared to what a standard bank charges for currency conversion.
There's a one-off setup fee of £50, then pay-as-you-go fees on transfers. Wise is an e-money institution, so funds are safeguarded but not FSCS protected. Most sole traders who use Wise keep it alongside a main UK bank account rather than as their only account.
You can read our full review of Wise Business for a more detailed breakdown.
• Monthly fee: £50 one-off setup, then pay-as-you-go
• FSCS protected: no (e-money institution - funds safeguarded)
• MTD compatible: no
• Best for: sole traders with international clients or multi-currency income
Which one is right for you?
If you're UK-based with straightforward finances and want to pay nothing, Starling or Monzo Lite are both solid starting points. If you want invoicing built into your account, Tide is worth a look. If you deal with international clients, Wise Business is hard to beat on exchange rates.
You can see the full listings for each of these in our Business Banking directory.
Prices checked October 2026. Always check each provider's website for current pricing before signing up.
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