With around 75 million bank accounts and over 225 banks and building societies in the UK, it can be difficult to determine which bank account to choose for your business.

As well as the long-established names we’re all familiar with, there are several online ‘challenger banks’ that are slowly becoming more popular such as Monzo, Starling and so on.

As the way we bank evolves with the modern day, is it time go beyond the high street when deciding which business bank account to open?. So, what kind of business account should you open, and should you consider online business accounts?

Why choose digital business bank accounts?

Online banks are giving traditional providers a run for their money. Offering a sleek user experience, enhanced app functionality and cost-effectiveness, these disrupters are rapidly becoming the go-to option for many modern businesses. In fact, some 20 million people in the UK already own a challenger bank account. But what are the advantages and disadvantages of online vs traditional banking?

1: Easy integration with accounting software

While traditional institutions now offer online banking as standard, online banks typically take a more digital-first, streamlined approach to business accounting.

These banks were founded with the future in mind, which means they’re often one step ahead when it comes to integrating with the other applications you use in your business. For example, with just a few clicks, you can seamlessly Xero cloud accounting software with your online bank account.

2: User-friendly experience

Say goodbye to never-ending drop-down menus and clunky dashboards: challenger banks offer intuitive interfaces that make for a more user-friendly banking experience.

You can also expect easy-to-use features like in-app invoicing, payment schedules, and automated financial insights from advanced machine-learning algorithms.

3: Cost-effectiveness

Monthly maintenance fees, transaction costs and currency conversion charges associated with traditional banking can be a thorn in the side for businesses. Thankfully, many digital banks offer transparent pricing models so you’ll always stay on top of your banking fees.

Depending on your chosen provider, picking a bank with minimal charges could save you a lot of money in the long run.

4: Innovative features

Innovation is at the heart of online banking. Where traditional banks are often slower to adopt new technologies, online platforms are continuously evolving.

Cutting-edge features like instant transaction notifications and automatic expense categorisation are standard offerings rather than premium add-ons.

Moreover, built-in budgeting tools can provide a holistic view of your business’s performance. When combined with actionable insights from your accountant, this can help you make better-informed decisions about your business’s future and stay ahead of the curve in a competitive marketplace.

Best online business bank accoutns

Starling Bank

Starling Bank has become one of the UK’s favourite challenger banks ,with a first-class app offering plenty of integrations.

It’s also shown that digital banking doesn’t many sacrifcing stellar customer service. UK businesses that bank with Starling don’t need to pay for maintenance fees or electronic transfers within the UK, while charges for international transfers are lower than average.


With several unique features explicitly tailored for modern businesses, Tide stands out among digital business banks.

One of its most notable features is its automatic VAT calculators, which can be a lifesaver for businesses when it comes to submitting their quarterly returns.

Additionally, the in-app invoicing system simplifies the billing process, making it easier for businesses to manage their finances.

Tide also offers a payment gateway, enabling retail businesses to collect payments from their online stores and third-party sites.


Monzo has always been at the forefront of customer-centric banking, prioritising a digital-first user experience with a slick, intuitive app. It’s also transparent about its pricing, ensuring businesses are never caught off guard by hidden fees.

Given the online bank’s focus on simplicity and transparency, Monzo is an ideal choice for businesses that want a straightforward and pain-free banking experience.

Summing up

Whether you’er just starting your entrepreneurial journey or you’re looking to switch banking providers, digital banking is worth considering – but the right choice will be different for everyone.

The most important thing is to choose a bank – traditional or otherwise – that affords you the most financial freedom, flexibility and security. After all, you can’t put a price on peace of mind.

If you want to learn more about which bank account would best suit your business, get in touch with us today.