Comparison
Best business bank accounts for sole traders
You are not legally required to have one — but almost every personal account bans business use, so in practice you need one. Here are the accounts that suit self-employment specifically.
Our picks
Monzo Business
First of 17 UK providers for business service quality, Making Tax Digital software on every tier including free, and 1.30% on your balance rising to 3.25% on Pro.
Mettle by NatWest
Free forever with a FreeAgent subscription included — worth more than most rivals’ paid tiers — plus 1.46% on savings pots. No cheques or international payments.
ANNA Money
The best live HMRC estimate and receipt handling in the market if you file your own return. But the everyday balance is safeguarded, not FSCS-protected.
Compared
Scores use our seven weighted criteria. Run your own numbers on the true cost calculator.
| Account | Monthly | Savings | Admin tools | FSCS | Score |
|---|---|---|---|---|---|
| MoMonzo Business | £0 – £25 | 1.30% – 3.25% | MTD on all tiers | Yes | 4.3 |
| SStarling Business | £0 | None | Free integrations | Yes | 4.2 |
| MMettle by NatWest | £0 | 1.46% | FreeAgent free | Yes | 3.9 |
| TTide | £0 – £69.99 | 2.00% free tier | Sage on free plan | Yes | 3.8 |
| AANNA Money | £0 + tiers | 1.00% | Live tax estimate | No — safeguarded | 3.4 |
| VVirgin Money | £0, criteria apply | 3.55% (unverified) | Marketplace | Yes | 4.1 |
| ZZempler Bank | £0 – tiers | None | Limited | Yes | 3.2 |
What actually matters when you are self-employed
Sole traders have a different shortlist from limited companies, and most comparison sites ignore the difference. Four things decide it.
1. Making Tax Digital
MTD for Income Tax has started catching sole traders above the £50,000 threshold, which means quarterly digital submissions rather than one annual return. If your account includes compliant software, that is a real cost avoided. Monzo includes MTD software on every tier including free Lite. Mettle bundles a full FreeAgent subscription. Starling’s Accounting Essentials is free and covers MTD.
If you already pay for Xero or FreeAgent separately, that inclusion is worth more than most monthly fee differences.
2. Whether it pays you anything
Sole traders often hold a tax reserve — money set aside for a Self Assessment bill six months away. Sitting in an account paying nothing, that is a quiet annual loss. Monzo pays 1.30% on its free tier, Mettle 1.46%, Tide 2.00% on its free plan. Starling pays nothing at all on business balances.
On a £10,000 tax reserve that is a £200 a year difference between the best and worst free accounts, for no extra effort.
3. How you are paid
If clients pay by bank transfer, almost any account works. If you take cash, the charging model matters more than the monthly fee — see best for cash deposits. If you are ever paid by cheque, that rules out Mettle, Tide and ANNA, none of which accept them — Monzo and Starling both do.
4. Whether you need to borrow
Among the free accounts, only Starling offers a business overdraft on application. If your income is lumpy — which for most self-employed people it is — that is worth weighing against the interest you give up.
What you do not need
Branch access, unless you handle cash. Multi-currency accounts, unless you invoice overseas. Multi-user access, by definition. A great deal of business banking marketing is aimed at companies with staff, and it is safe to ignore.
Before you apply
You do not need to register anything to be a sole trader beyond telling HMRC you are self-employed. But providers will still want photo ID, proof of address, and a specific description of what you do and who pays you. "Consultancy" stalls applications; "IT consultancy for NHS trusts, invoiced monthly" does not. See what you need to apply.
Common questions
Do sole traders need a business bank account?
Not legally. But nearly every personal current account’s terms and conditions prohibit business use, and banks enforce it — usually by giving you two months to leave. If you claim expenses against your income, a separate account also makes proving them far easier.
What is the best free business account for a sole trader?
Monzo Business Lite and Mettle are the strongest free options. Monzo ranks first in the UK for service and pays 1.30% on balances; Mettle pays 1.46% and includes a FreeAgent subscription. Starling is also free and offers an overdraft, but pays no interest at all.
Can I use my personal account as a sole trader?
There is no law against it, but it will usually breach that account’s terms. Enforcement tends to follow patterns — many incoming payments from different people, regular cash deposits, card takings — rather than principle.
Which account is best for Making Tax Digital?
Monzo includes MTD software on every tier including free. Mettle includes a full FreeAgent subscription. Starling’s Accounting Essentials tier is free and covers MTD. All three remove a separate software cost.
Do I need a business account before I start trading?
No, but open one early. Untangling mixed personal and business transactions at year end costs more in accountancy fees than the account costs to run — and several are permanently free.