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If you’re planning to start a new business, probably you have a lot on your plate right now. However, don’t forget to add one more task to your to-do list: choosing a business bank account. Even if it doesn’t sound like a top priority, taking this question seriously can help you save quite a lot of money in the future.

Does everyone need a bank account?

But first things first. Before deciding which bank account to choose you should think if you need one at all. For example, while limited companies are obliged to have a bank account, there is no requirement for sole traders to have one. Despite that, we highly recommend opening one, because:

• doing your books will be hundreds of times easier if you keep your personal and business accounts separate
• you won’t have to struggle with your tax returns
• claiming your expenses will be much easier

How to choose the best offer?

It’s no surprise that many entrepreneurs choose to open a business bank account at the same bank where they already have their personal one. Usually, such a decision is based on convenience, but it’s not always the best choice.

When choosing the business bank account, think what your business will need most. For example, some banks can offer you very small monthly account fees and such an offer might seem very pleasant if you’re just starting off and counting every penny. But at the same time, it might have very aggressive charges for payments from overseas and if you are planning to get a lot of those, you might end up losing hundreds of pounds.

Also, you should keep in mind that many banks are ready to offer favorable conditions to new clients and provide a number of free benefits. So, if your bank doesn’t offer these, you can surely get it somewhere else. Such offers usually are:

• Free of charge usage for the first months (usually, 12 months)
• Discounted charges or fees for a fixed period after the free of charge period finishes
• Discounts when switching accounts

What fees and interest rates to expect?

The average monthly fee for a business bank account is somewhere between £5-£10. However, before making the final decision it would be wise to compare what conditions and fees different banks offer when withdrawing cash, paying by / in a cheque or a bank transfer, going over the overdraft, etc. These can be game changers when looking for the right account for your business.

Also, keep in mind that nowadays most of the banks charge less for transactions made electronically than in-branch. If your bank is not offering such an option, maybe it’s worth looking for another provider.

Finally, most of the current business bank accounts offer a 0% Annual Equivalent Rate (AER), while some might offer 0.1%-0.25% AER.