Is there any free business banking left?

Is there any free business banking left?

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This is a warning about HSBC bank. Do not recommend clients to open business accounts there.

Last year I changed my business bank account from Santander to HSBC as Santander was going to charge £7.50 a month, and HSBC promised provide free banking within reasonable limits, such as 5 chqs a month for free. A letter form HSBC this morning tells me they will charge £5.50 a month and all the free limits (5 chqs a month for free etc) will disappear from 1 Sept 2013.  Note this is not just because of an end to an introductory 'free banking' period. It is a change in the pricing for the business direct account which is being renamed electronic banking tariff.

Can anyone recommend a bank that does free business banking? Do I have to change banks for the second time in a year?

Replies (28)

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By Darren Loring
28th Jun 2013 11:59

Pay for what you get

Can't think of any that still offer 'free' banking, however I have found that the ones offering free banking in the past had the worst customer service and made the most errors - so in the end it saved money to pay a relatively small monthly fee.

I hate to be on the side of banks, but why shouldn't they charge for providing a service? - we all do.  I know that they make some money on the interest rates, but that is not much these days - perhaps when interest rates go up we will see a return of some free banking facilities.

Darren

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Replying to lukayl:
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By Maslins
28th Jun 2013 15:14

I'm not too chuffed either.

Darren Loring wrote:

Can't think of any that still offer 'free' banking, however I have found that the ones offering free banking in the past had the worst customer service and made the most errors - so in the end it saved money to pay a relatively small monthly fee.

I hate to be on the side of banks, but why shouldn't they charge for providing a service? - we all do.  I know that they make some money on the interest rates, but that is not much these days - perhaps when interest rates go up we will see a return of some free banking facilities.

Darren

I'm with HSBC.  I too am annoyed that their "forever free within certain limits" bank account will no longer be free.

I understand terms change over time...but the main reason I went with HSBC was I'm fed up with "introductory deals" and wanted a long term account.  I accepted the fact they'd sting me if I withdrew/paid in cash, or multiple cheques...it's an online account to keep their costs low, I get that.

Reality is I probably won't bother to change banks as it's so much hassle...but any goodwill I had towards HSBC is gone.

...and re the bit highlighted bold above:
Their business money manager (the main business savings option) account pays 0.05% interest on balances up to £100k.
If I go overdrawn on the current account, they charge me 29.5% interest.
So if one person goes overdrawn and someone else has savings of the same amount, HSBC's profit margin is 59,000% by my reckoning?

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Glenn Martin
By Glenn Martin
28th Jun 2013 12:36

Santander

seem to be offering a lot of deals to buy in business not sure if they do free banking though. Service is not ideal, using post office for banking etc.

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By Nick Graves
28th Jun 2013 16:16

They WOULD be very profitable on the interest rate spread...

...if they weren't still so very deeply insolvent.

Don't keep too much money deposited in any business bank account, just in case Cyprus/Ireland happens here.

 

 

 

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By frustratedwithhmrc
28th Jun 2013 17:14

Cater Allen Private Bank are still nominally free provided minimum balance is maintained and less than 20 Cheques per month.

Satisfied customer since 2001.

http://www.caterallen.co.uk/download/32

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Replying to Grayson Moore:
By Nick Graves
28th Jun 2013 19:55

I was too

frustratedwithhmrc wrote:

Cater Allen Private Bank are still nominally free provided minimum balance is maintained and less than 20 Cheques per month.

Satisfied customer since 2001.

http://www.caterallen.co.uk/download/32

 

I was with CAPB on a similar deal when they were really a private bank, but IIRC they withdrew that and I have a similar arrangement with BoS. 

They must've re-introduced it later or something - maybe I wasn't the only one who moved away. Or else BoS had no minimum balance, but then suddenly did - cannot recall.

CA are now part of Santanderupt, so are probably just as unstable as Halibustofscotland.

Still, five bag or so isn't too bad a minimum balance to risk.

 

 

 

 

 

 

 

 

 

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By Ding Dong
28th Jun 2013 17:58

darn......

I am with HSBC - have been for years and never paid a bank charge on the Bus direct account which has always been great and I have referred clients to it too as the only "free" account and as I too used it - it must be good!

I look forward to the letter :-(

Reality is though that I won't change due to hassle factor.

I will though actively move excess funds from business account to Nationwide/ING or Aldemore as earn interest that will more than cover the savings (probably should have been doing before now anyway)

 

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By nautical
28th Jun 2013 18:24

try rbs

Business Banking Direct from RBS is free for all online and postal transactions if you have simple requirements and do not need a local relationship manager.  I have been with them 12 years and not been charged

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By Mouse house
28th Jun 2013 18:55

FSB
I think you can get free business banking with the Co- op if you are a member of the FSB

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By carnmores
29th Jun 2013 13:04

AND FOR THOSE OF YOU WHO WANT FREE BANKING

what services do you provide free to your customers?

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Replying to Mr_awol:
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By chatman
03rd Jul 2013 18:13

Don't read this.

carnmores wrote:
what services do you provide free to your customers?

Little bits of advice they phone me up or email me for; stupid questions they phone me up or email and ask me; responses to hair-brained tax avoidance schemes they want me to arrange for them; correcting their bookkeeping errors; dealing with Time-to-Pay arrangements and overdrawn DLAs for clients who spend the amount of money they think they deserve to earn, rather than they amount they really earn.

I know that is not what you meant, so please ignore this comment; I just wanted a rant.

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By 3569787
03rd May 2016 17:12

Switching to RBS

.

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By User deleted
01st Jul 2013 14:12

@ Carnmores

But they get to invest the money you hold with them so that's how they profit... If I got a kick out of doing my clients' accounts for them then maybe I wouldn't charge them as well but sadly I don't...

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By Nick Graves
01st Jul 2013 16:08

Not quite

They get to invest typically about ten times the amount of money you give them, due to the Ponzi - sorry, Fractional Reserve banking system. And then they get into difficulty once a credit cycle.

The £66 wouldn't get them very far at all.

  

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By Head
02nd Jul 2013 10:08

It is true that RBS provide free business banking via their 'Business Banking Direct' service.

Naturally you pay for overdrafts, stopped cheques, duplicate statements and other similar 'extra' services, but if all you require is a simple day-to-day online banking facility and don't require a business account manager, you won't pay any charges or fees.

But quite what the future holds for RBS is anybody's guess. It's up for sale of course, and the obvious downside is that whoever takes it on in its current state may well determine that they simply cannot justify continuing to offer free banking services if they are to bring the company back into profit. The upside is that it could take another couple of years to return to an adequate level of profitability to make it ready for a sale, longer if Osborne continues to dither over his intentions, but in the meantime we remain in the Government's safe hands ... :)

 

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By sally1964
02nd Jul 2013 12:24

Pity you jumped

Pity you left Santander - they changed their minds on free banking and we still have free banking for life.

 

That said go to money supermarket to compare deals.

 

A new client said they had gone with Carter Allen.

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By Head
02nd Jul 2013 12:45

To summarise...

To summarise at this point, it looks as though there are only three free business banking services currently available:

1. RBS   'Business Banking Direct'
Standard online banking facilities all free; no minimum balance required.
Sounds good, if you can cope with their apparently laborious administrative approach to opening new accounts, and their somewhat uncertain future.

 

2. Metro bank  'Startup and Switcher Business Bank Account'
No fee in first year; £15 monthly fee thereafter but only if the credit balance falls below £2000.
Run by American businessman Vernon Hill, and has assets of around £800 million.
Apparently you need to go into a branch (they're all in London) to open an account.

 

3. Cater Allen:  'Reserve Account'
Cater Allen is a subsidiary of Santander.
Their Reserve Business Account allows a maximum of 30 day-to-day transactions per month.
A £5000 minimum credit balance is required for free banking; otherwise there's a £15 per month fee.

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By [email protected]
02nd Jul 2013 17:15

RBS

Just tried to call RBS and open up one of the direct accounts (currently on the HSBC free account) only to be told that I couldn't have one because I'm an accountant! Seems like it's an issue to do with holding client funds and even after I explained that I don't require a client account, have never and do not intend to hold client funds this didn't make any difference.

 

Anyone else had this issue, or did I just get the one difficult "Customer Service" adviser in their call centre?

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Replying to Matrix:
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By tracey2412
03rd Jul 2013 13:25

as a book-keeper, I am a risky business

Only if I got the same one. Applied to Natwest Business banking ( RBS/Natwest - same place) online, they called me couple WEEKS (aren't they clamouring for business?) later to say I needed a face to face interview in branch as I was a risky business. After I stopped laughing, I asked what was risky (no borrowings, no overdraft, no credit card even) but the girl could only repeat parrot fashion,that it was 'on a list of risky businesses' and did I want the branch to call me to make an appointment. I said yes but they never did call.

A few weeks later, I called the NW helpline to enquire and got a different adviser, who couldn't quite believe what I was saying - and asked - you are a book-keeper, not a book-maker?? So we put it down to input error (clicking the wrong line in a drop-down list) and he suggested I try again.

 

But he did also advise me that  Natwest Business Accounts have also been ring-fenced & will be sold off with RBS Business accounts & the non-Scottish high street branches of RBS. (Business only, not Corporate).

So back to square one - searching for a decent bank- don't mind paying sensible charges - sensible relating to my turnover & transactions.

Currently with Co-op -they're ok but the online banking portal is rubbish.

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By asillahi
03rd Jul 2013 11:41

Cater Allen

As long as you retain a cash balance of at least £5k. It's all over the internet though.

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By rangra
03rd Jul 2013 12:58

Surplus funds

Following on from comments above re surplus funds and not keeping too much money in a bank account, does anyone have suggestions for what to do with surplus funds for a small limited company - approx. £70000?

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By Consultants4VAT
03rd Jul 2013 12:57

Cater Allen

I have been with Cater Allen and Flemming before that for 10 plus years. You get free 0800 number if you don't want to do it over internet. I do it all over the phone. They still give you a cheque book, and a banking book which they will tell you were you can use it for free. Very customer friendly, never let me down ever. It is part of Santandar now.  I have toyed with the idea of Co-Op through my FSB membership, but Cater Allen has given me no reason to change. So do look at it as an option as Asilahi has suggested.

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By AdShawBPR
03rd Jul 2013 14:54

Get what you pay for...

I use HSBC and mostly free as most transactions electronic.  Don't look at the bank fee in isolation though - what do you get for the money?  HSBC can feed their data into a variety of software systems and provide bank statement info in CSV format going back years.  This facility saves much hassle, time and cost elsewhere so well worth the money.  HSBC is a relatively well run bank and didn't require taxpayer support to prop it up.  Cheap bank going bust wouldn't be very helpful.

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Replying to lionofludesch:
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By frustratedwithhmrc
03rd Jul 2013 22:48

I Agree

AdShawBPR wrote:

I use HSBC and mostly free as most transactions electronic.  Don't look at the bank fee in isolation though - what do you get for the money?  HSBC can feed their data into a variety of software systems and provide bank statement info in CSV format going back years.  This facility saves much hassle, time and cost elsewhere so well worth the money.  HSBC is a relatively well run bank and didn't require taxpayer support to prop it up.  Cheap bank going bust wouldn't be very helpful.

I get very little (to nothing) therefore I should pay very little (to nothing).

Sounds fair.

 

 

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By Nick Graves
03rd Jul 2013 17:13

Maybe they thought

JGamgee was a Turf Accountant?

Muppets!

 

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By JuliaKing
04th Jul 2013 06:36

I have FREE banking with the Co-op & I get £25pa just for having an account with them. I do have to be a member of the FSB, but if you're bank charges are high, it is worth the annual subscription. One of my clients saved herself about £70pa by joining the FSB & obtaining a Co-op account. The only time they charge is if you have a lot of cash transactions, but I don't. It is worth looking in to. This is an extract from the FSB website:-                                                    

FREE business bankingNo monthly charge for operating your accountNo fees to pay on standard non-cash transactionsAn unlimited number of cheques can be paid into your accountPay in up to £4,000 cash every month for FREEA fee-free overdraft facility for business banking customersAn FSB charge card and business loans from £2,000 to £25,000Earn interest on your entire credit balanceFree, 24/7 online banking, 365 days a yearThe choice to do the banking for your small business at your local Post Office (by arrangement)A £25 annual loyalty bonus.

 Some find banking at the post office a bit of a faff, but for me, it works perfectly.

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By [email protected]
04th Jul 2013 15:09

Turf Accountant

Afraid I'm more serf than turf!

Frankly having done my research I may well be dodging a bullet by being turned down by RBS anyway. Currently considering Co-op (slightly concerned by Tracey's comment re the rubbish portal - but I have very simple and low numbers of transactions, so I don't expect it will be a problem, I actually find that the HSBC portal is one of the worst I've used).

Co-op looks like it will be £3 a month and very minimal transactional charges, none on deposits at my level and a few pence on debits, which I can mostly avoid my setting up a business cashback credit card (Capitalone) to make most of the purchases from. Co-op looks like it will be free for 18 months too, so if nothing else it will defer the decision for a bit! It looks like they have a Britannia branch I can probably use in town, or I can just post cheques off

I don't mind paying some charges - but in excess of £70 a year seems a lot, at my transactional level I would be looking at over £1 per transaction! It's also particularly galling to suddenly have these charges levied, when the reason for choosing the account was the absence of charges and then having the changes described (even as a secondary characteristic) as a simplification, when clearly it is just about raising extra revenue.

I've seen a few accounts being mentioned where you get free banking if you keep a certain amount of funds in (Cater Allen, Metro, plus a couple of foreign ones), but for a small business with low numbers of transactions the interest forgone would far outweigh the savings.

 

 

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By J-Nevil
21st Nov 2013 16:41

It is getting increasingly difficult to find a free business bank account, especially the way the market has gone in the last few years. However, there are some still out there, along with the other free banking alternatives mentioned such as Co-op, RBS and Metrobank. Another alternative that you can look into which offers free business banking is Cashplus, which has no monthly fees or interest. 

I hope  that you are able to find the right business bank account that meets your needs. 

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