Switching to a different business bank account is usually a simple process that could save your business money and give you access to valuable features.
The process of moving all of your business’s transactions and information across to a new account might sound daunting, but that shouldn’t hold you back. Thanks to convenient full or partial switching services, getting set up with your perfect business bank account has never been easier. As such, it’s something every small business owner should explore.
Below, we explore the reasons business owners might choose to switch business bank accounts as well as how to switch with or without the Current Account Switch Service.
Why switch business bank account?
There are a wealth of reasons to switch to a different business bank account. These include, but are not limited to:
- Introductory offers: Some accounts offer timed incentives such as free transactions or no account fees to new account holders. You could also gain temporary free access to accounting software or other assorted business tools.
- Cutting costs: If you are looking to save money, changing to a free business bank account could be a simple and impactful solution. Just make sure you take transaction fees into account as well as monthly fees.
- Better service: Your current business bank account might not be satisfactory, or it may simply not be the best business bank account available.
- Expanding internationally: If your business is expanding, you may plan to trade internationally. However, not all business bank accounts are equipped to deal with international transactions so switching might be your best choice.
- Branch banking: Many customers appreciate banking in a branch. If you are banking with a challenger bank or your local branch has just been closed, switching to a bank with a local store can be an attractive option.
How to switch business bank account
The first step in switching business bank accounts is to find and open your new account. You can find some tips on how to choose your new business bank account at the end of this article, but, for now, it’s good to have an idea of the type of documents you will need to open your new account. These include information about both you as an individual as well as your business, such as proof of identity, proof of address and business details, including utility bills or bank statements.
Once the new account is open, you can switch in one of three ways.
» MORE: How to open a business bank account
Switching with the Current Account Switch Service
The Current Account Switch Service aims to remove the frustration from the process of changing bank accounts. It allows customers to easily transfer balances (and in some cases also overdrafts) and recurring or planned payments across to a new account.
To take advantage of the process, which covers both business and personal accounts, switchers just need to open a new account. Then, you simply need to ask your new bank to initiate a switch using the Current Account Switching Service.
To be eligible to take advantage of the service, your business needs to:
- be switching accounts between two participating banks
- have fewer than 50 employees
- turnover less than £6.5 million per year.
Using the Current Account Switch Service to change business bank account will take seven business days, and will ensure that:
- all regular inbound and outbound payments are transferred
- your old account’s balance is moved to the new account
- payments into the old account after your switch date will be rerouted to the new account
- anyone attempting to send money to your old account will receive your new details
- under the Current Account Switch Service Guarantee, any interest or charges incurred as a result of something going wrong during the switch will be refunded by your new bank
At the time of writing, more than 50 banks have signed up for the service. These include the following banks, which have been reviewed by NerdWallet:
- Allica Bank
- Barclays
- Bank of Scotland
- CardOne Money
- The Co-Operative Bank
- HSBC
- Lloyds
- Metro Bank
- Monzo
- NatWest
- Royal Bank of Scotland
- Santander
- Starling Bank
- Tide
- TSB Bank
- Ulster Bank
- Virgin Money
Using a partial switch service
You don’t have to use the Current Account Switching Service when you change your business current account.
Some banks have their own ‘partial switch’ services, which are not backed by the Current Account Switch Service.
For example, NatWest’s partial switch service allows customers to choose a date for their partial switch, on which some or all of their regular outgoing payments will be transferred to their new account.
However, unlike a full switch, you will need to arrange for any regular incoming payments (such as salary, benefits or pension) to be rerouted to the new account. In addition, new payments to or from your old account will not be redirected.
Manual switching
You can also switch business bank accounts without using any service at all. It is worth considering that switching accounts manually is a much more complicated and time-consuming process, so it is probably best to avoid it unless the Current Account Switch Service and partial switching options are not available with your desired account.
A manual switch will require you to fill in forms, select to transfer some or all of your regular transactions, let you transfer your balance across and give you the option of closing your old account.
While this sounds similar to other options, it is worth noting that you cannot choose the date of your manual switch and it can take up to 60 days to complete. In addition, it is not covered by the Current Account Switch Service Guarantee, meaning you could face additional charges if something goes wrong.
Choosing a new business bank account
Deciding to switch business bank accounts is one thing, but picking your new provider is quite another. Make sure to choose an account that works for your business’s circumstances. Think about whether you want a simple app-based offering, a branch-based traditional bank or an account with cross-border capabilities.
Comparison sites can be a great place to start your search. NerdWallet has several different rankings for business bank accounts, listed below:
- Best Business Bank Accounts
- Best Free Business Bank Accounts
- Best Online-Only Business Bank Accounts
- Best Sole Trader Business Bank Accounts
- Best Joint Business Bank Accounts
- Best Start Up Business Bank Accounts
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