Best Bank Accounts for Sole Traders 2024
If you’re a UK sole proprietor you may be wondering about the very best bank accounts for sole traders, including options which allow international currency exchange and spending, cash deposits, overdrafts or other features. The good news is that the UK is well served for sole trader accounts - so the biggest challenge may be choosing the right one based on your own transaction needs.
This guide walks through some of the best accounts for UK sole traders, from banks and from non-bank alternatives like Wise and OFX.
Quick summary: Best bank accounts for sole traders
- Wise Account: Send, hold, spend or exchange 40+ currencies cheaply and easily
- Revolut Account: Choose from different account plans, supporting 25+ currencies
- OFX Global Currency Account: Receive payments in 7 currencies from customers, PSPs and marketplaces
- Starling Bank Account: No monthly fee account from a UK digital bank
- HSBC Kinetic Account: Digital and in app account with cheque deposit options
| Questions | Answers |
|---|---|
| Can I use my personal bank account for sole proprietorship? | Sole proprietors may not legally need to open a separate business account - but it can make life a lot easier if you do. Keep your personal and business finances separate, to more effectively analyse business performance and grow your turnover. |
| Can you open a business bank account as a sole proprietor? | Some banks allow sole proprietors to open business accounts - but not all accounts are available to sole traders in the UK. Compare bank and non-bank alternative options to find the right one for you. |
Do I need a business bank account for sole proprietorship?
No. You do not need a business bank account for a sole proprietorship in the UK. As a sole trader, your personal and business finances are viewed as the same thing - if you’re liable for a debt through your business activity, that liability still applies to you personally.
That said, even though it is not mandatory to have a business account as a sole trader, it is highly recommended. Having a business account means you can split out your personal and company financial matters, making it easier to monitor business performance and keep on top of your accounts.
What bank account can I use as a sole trader?
Sole traders in the UK usually have a few different options - the exact accounts available to you may depend on your situation, including the type of work you do. However, in many cases you’ll be able to choose:
A business or start up account from a UK bank
A personal account from a UK bank
A business or personal account from a non-bank alternative like Wise, Revolut or OFX
Can a sole trader use a personal bank account?
Yes. A sole trader can use a personal bank account. This is because of the way sole traders are treated for tax - their personal and business dealings are seen as the same thing.
The downside of this is that keeping your personal spending money and your business profits in the same place can become very complicated and make it unnecessarily difficult to grow your business. Opening a dedicated business account simply makes life easier for most sole traders.
Best business accounts for sole traders in the UK
There’s no single best sole trader account in the UK, but there are plenty of options for you to review and compare. We’ve looked at some accounts from non-bank alternative providers like Wise and OFX, and also a couple of banks - Starling as a digital bank option, and HSBC as a high street bank with a specific product for sole traders. Here’s a quick overview:
| Provider/Service | Great for | Account fees | Minimum balance requirement | Key features |
|---|---|---|---|---|
| Wise Business account | Send, hold, spend or exchange 40+ currencies cheaply and easily | No opening fee for personal account 45 GBP one time opening fee for business account No ongoing fees | None | Receive payments with local and SWIFT details Cards available |
| Revolut account | Choose from different account plans, supporting 25+ currencies | 0 USD - 45 GBP/month for personal accounts | None | Sole traders can open one of 5 different personal account types Cards available |
| OFX Global Currency Account | Receive payments in 7 currencies from customers, PSPs and marketplaces | No ongoing fees | None | Receive payments with local details in 7 currencies Access currency risk management solutions |
| Starling Business account | No monthly fee account from a UK digital bank | No ongoing fees - optional extras available with monthly charges | None | Add on EUR account for a fee Business toolkit option available |
| HSBC Kinetic Account | Digital and in app account with cheque deposit options | Monthly fees of 6.5 GBP - waived in the first year | None | Overdrafts, credit cards and loans available International payment options |
*Fees and information correct at time of writing - 26th August 2024
As you can see, some of the available features for sole proprietor accounts in the UK can vary quite a lot. So do the fees. This means it’s well worth weighing up a few different account options before you decide on the right one for you. We’ve given a more detailed overview of the providers and banks we've profiled in the table, here:
Wise account
🏅 Great for: Sole proprietors who need to send, receive, hold, spend or exchange foreign currencies cheaply and easily.
Sole traders in the UK can open either a Wise personal or business account, depending on which they prefer. All accounts support 40+ currencies for holding and exchange, and offer payments to 160+ countries with a debit card for spending and withdrawals in 150+ countries. Currency exchange uses the mid-market rate with low fees from 0.33%, and accounts also offer options to receive payments with local and SWIFT account details.
There’s no fee to open a personal account, and while there’s a one time charge of 45 GBP for a business account, you’ll get all the features of a personal account with some great extras. Issue debit and expense cards for yourself and your team, send batch payments, integrate with cloud accounting solutions and access a powerful API to streamline workflow.
Eligibility: Sole traders and freelancers in the UK and many other countries - apply for either a Business or Personal account depending on your needs
Best features of a Wise Business account
Hold and exchange 40+ currencies with the mid-market rate and low fees
Receive incoming foreign currency payments with local account details in 8+ currencies, and SWIFT details for additional currencies
No ongoing fees, no minimum balance - just pay low transaction fees based on account use
Go to Wise Business
| Advantages of Wise Business account | Disadvantages of Wise Business account |
|---|---|
✅ 40+ supported currencies ✅ Get paid by customers, PSPs and marketplaces in many currencies ✅ Currency exchange with the mid-market rate ✅ No ongoing fees, no minimum balance | ❌ No cash deposit facilities ❌ Some transaction fees apply |
OFX account
🏅 Great for: Ecommerce sellers and digital businesses getting paid by customers, PSPs and marketplaces in 7 major currencies.
OFX is a currency specialist operating in the UK and many other countries globally. Business customers and sole traders can open a Global Currency Account to get local account details in 7 currencies, to receive payments from abroad. You can use your account details for invoices, PSPs and marketplaces, and either hold your balance in a foreign currency, convert and withdraw to GBP, or send to others - to pay taxes or suppliers for example.
OFX has a strong reputation for customer service, and offers a 24/7 phone line as well as self service online and in app options.
Eligibility: Sole traders, ecommerce sellers and similar business types, in the UK and many other countries
Best features of a OFX Business account
Get paid, from 30+ countries, and pay others easily in 50+ currencies
No ongoing costs, no minimum balance
Well established business with great customer support through personal brokers
| Advantages of OFX Business account | Disadvantages of OFX Business account |
|---|---|
✅ Receive and hold 7 currencies ✅ No ongoing costs, no minimum balance ✅ 24/7 phone service if you need to talk to someone ✅ Currency risk management solutions | ❌ No debit card ❌ Exchange rate markups used |
Revolut account
🏅 Great for: Sole traders who want to open a personal digital account to hold and exchange currencies, with no extra fees for some weekday conversion
Revolut offers sole traders in the UK the option to open one of 5 different types of Personal account, with fees from 0 GBP to 45 GBP a month depending on the features you need. All accounts can hold and exchange 25+ currencies, with some weekday currency exchange with the Revolut rate and no additional fee every month.
All Revolut account tiers have a linked debit card, and allow you to receive payments using either local or SWIFT details. You can also make some no fee ATM withdrawals monthly before fees begin - limits vary based on the plan you pick.
Eligibility: Sole traders and freelancers in the UK and many other countries can apply for a Revolut Personal account - Revolut Business products are not available for UK sole traders
Best features of a Revolut account
Choose different account types depending on needs - you can upgrade if your requirements change
All accounts offer some no fee ATM use and some currency conversion with the Revolut rate on weekdays
Some accounts have no ongoing fees
| Advantages of Revolut account | Disadvantages of Revolut account |
|---|---|
✅ Different account tiers for different customer needs ✅ All accounts have linked debit cards ✅ Some no fee weekday currency conversion, and some no free ATM use ✅ 25+ currencies supported for holding and exchange | ❌ Sole traders can not open a business account ❌ Monthly fees of up to 45 GBP may apply |
Starling Bank account
🏅 Great for: UK sole traders who want a GBP account with no monthly fees and may need to pay in cash from time to time
Starling is a fully licensed UK digital bank. Sole traders can open a specific current account to hold, send and receive GBP - and you can also pay extra to add in EUR account functions if you want. There are business debit cards available for ease of spending, with no Starling ATM withdrawal fee or foreign transaction fee.
Some services - such as cloud accounting integrations - have no extra fees, but there are also other features you can pick to add into your account with a monthly charge. This means you can tailor your account to your own specific needs.
Eligibility: Specific account available for UK sole traders
Is Starling Bank safe to use?: Starling Bank is fully licensed in the UK and safe to use
Best features of a Starling Bank Business account
Sole trader current account with a licensed UK bank
No monthly fees for the basic services of a GBP account - add on extras available with monthly charges
Cash deposit services available
| Advantages of Starling Bank Business account | Disadvantages of Starling Bank Business account |
|---|---|
✅ GBP and EUR account options available ✅Cash deposit options ✅ No monthly fees for GBP accounts ✅ Add in optional extras for a fee, including business toolkit services | ❌Fees apply for some features and services ❌ Limited currency services for sole traders |
HSBC Kinetic account
🏅 Great for: UK sole traders who prefer to manage their money in an app, and want cheque deposit features
HSBC Kinetic is for startups, small businesses and sole traders. Monthly fees of 6.5 GBP apply but they are waived in the first year to give you a chance to test out the account with no risk. Features include ways to deposit cheques remotely and international payment options which are delivered in the HSBC app.
Eligibility: UK sole traders with a turnover of 6.5 million GBP or less per year
Is HSBC Kinetic safe to use?: HSBC Kinetic is the startup and sole trader account from HSBC, a large, trusted and global bank - it is safe to use
Best features of a HSBC Kinetic Business account
Monthly fees waived in first year
Get an overdraft and arrange payments through the HSBC app
Accounts are set up and verified online - usually in just a day or two
| Advantages of HSBC Kinetic Business account | Disadvantages of HSBC Kinetic Business account |
|---|---|
✅Accounts can be opened in 48 hours ✅ Accept customer card payments through partner services ✅ Mobile cheque deposit ✅ Overdraft services available | ❌ No foreign currency option of cheque book ❌ Monthly fees apply |
Best online business accounts for sole proprietorship
All of the accounts we’ve highlighted above are digital products, either offered through non-bank services which have no branch network, UK digital banks, or UK high street banks which also offer digital products. Here’s a roundup:
- Wise Account: Digital only non-bank provider, services online and in app
- Revolut Account: Digital only non-bank provider, services online and in app
- OFX Global Currency Account: Digital first non-bank provider, services by phone, online and in app
- Starling Bank Account: UK licensed digital only bank
- HSBC Kinetic Account: High street bank, offering the Kinetic account for customers primarily looking to bank through their app
How to open a business account as a sole proprietor online
How you open your business account will depend on the provider or bank you pick. Here’s a look at step by step how to open a sole trader account either online or in a branch:
Choose the account you want to open
If you’re opening online, download the provider’s app or open the desktop site, and check your eligibility. If the provider requires you to visit a branch, make an appointment to save time when you arrive.
Gather all the documents and paperwork needed
You’ll need to be verified as part of your application, which means providing personal and business documents. We’ll cover what’s usually required in just a moment. Pull together the documents needed to open a business account to save time later.
Fill out the application in person or online
If you’re opening your account digitally just follow the prompts to give your personal and business details - in a branch the team member will walk you through what’s needed.
Complete the verification step by handing over or uploading the documents requested
You should have all your paperwork prepared so you can simply follow the prompts to upload images of your paperwork if you’re applying online. In a branch you can hand over your documents to the team member.
Pay any required account opening fee or add money to your account if a minimum deposit is required
Different banks and providers have their own minimum balance requirements - or no minimum balance may be mandated when you open your account. Just add what you need to start transacting.
Sole proprietorship bank account requirements
There are a few common eligibility requirements - and you’ll also need to have a stack of paperwork and some key information on hand when you apply. Here are some common requirements to bear in mind:
Age: Usually you must be 18 or over to open your account
Residency: Many bank accounts are only available if you’re a UK resident
Business turnover: Some accounts are only available to people with a set level of annual turnover
Business types: It is common to find that providers can’t offer accounts to all business types - if you’re involved in crypto trading, gambling or other regulated markets you may need a specific account type for example
Here’s a look at the documents and information usually needed to open a UK business account:
Your full name and date of birth
Your contact information and address
Proof of ID and address - often a passport for ID, and a utility bill for address
Information about your business such as address and any relevant contact details
Business estimated annual turnover
What type of bank account is best for sole proprietorship?
There’s no single account that’s best for all sole traders in the UK - different people have their own needs and preferences. Instead, you’ll want to compare a few different account types and options to find one which most closely matches your requirements. Here are a few common things to think about:
International features
If you have customers, suppliers, contractors or team members overseas, you could benefit from a sole trader account with strong international features. Options may include holding a foreign currency balance, sending international payments, and receiving overseas payments with local or SWIFT account details.
Wise supports 40+ accounts for holding and exchange with local and SWIFT details for receiving payments
OFX has local account details in 7 currencies which you can use with PSPs and marketplaces - or add to your invoices to get paid easily
Cash and cheque deposit options
If your business needs ways to deposit cash or cheques you may be best off with a business account from a UK bank which offers branch services. Compare fees for this - most banks and providers have some sort of charge for cash deposits for example.
Starling Bank lets sole traders deposit cash through Post Offices - fees apply
HSBC Kinetic customers can remotely deposit cheques to their accounts as needed
No ongoing fees
Ongoing fees can eat away at the profits your business makes. If you’re not completely sure you’ll use all the features your business account gives you, you might choose an account with no monthly fees so you can test drive features with less risk.
Wise has no ongoing fees - some Revolut accounts also have no monthly charges, and both offer impressive international features
Starling account for sole traders have no ongoing fees for GBP use, and offer optional extras you can add in for a fee
Fees for business accounts for sole proprietorship
Pretty much all sole trader accounts will come with various fees, which you’ll need to consider before opening. Because different banks and non-bank alternative providers have their own approach to fees, it can be tricky to compare one option to another - make sure you review all ongoing and service fees for the types of transactions you’ll make often. We've covered a few here - but other fees may apply depending on how you use your account, so looking carefully at the small print is essential.
| Provider/Service fees | Account opening fees | Account maintenance fees | Minimum balance requirement | Other fees |
|---|---|---|---|---|
| Wise Business account | 45 GBP | No ongoing fees | None | Currency conversion from 0.33% Some ATM fees once allowance exhausted |
| Revolut account | None | 0 GBP - 45 GBP/month | None | 0.5% fair usage fee for currency conversion ATM fees once allowance exhausted |
| OFX Global Currency Account | None | No ongoing fees | None | Exchange rates include a fee |
| Starling Business account | None | No ongoing fees | None | Minimum of 3 GBP fee to deposit cash Additional paid services available |
| HSBC Kinetic Account | None | Monthly fees of 6.5 GBP | None | Foreign transaction and overdraft fees likely to apply |
*Fees and information correct at time of writing - 26th August 2024
Conclusion: What is the best bank for the self-employed?
There’s no single best account for UK sole traders and self employed people. The right one for you will depend on how you need to transact - but as both banks and non-bank alternative providers have quite varied features and fees, shopping around is essential to get the right option for you.
Consider both bank business accounts and non-bank alternatives. If you need to pay and get paid in foreign currencies, Wise could be a good fit, with both Wise personal and business account options available for sole traders. If you’re thinking of a multi-currency account with varied account tiers and fees, Revolut may be a good pick, with 5 different personal account types open to sole traders - all with their own unique combinations of features.
Use this guide to start your research and select the very best sole trader account for your needs.