By Sam Morris

Last updated: April 2026

Free business bank accounts for sole traders: which ones actually are (and which just look it)

"Free" is doing a lot of work in UK business banking adverts. Most of the accounts marketed as free for sole traders aren't quite — they're free of a monthly fee, which is not the same thing. Somewhere in the small print there's usually a charge waiting: 20p on every transfer, 0.95% on every payment in, 0.7% on cash deposits, an FX markup on your card abroad, or a free trial that quietly runs out.

This is an honest run through the genuinely free options for UK sole traders, the ones that look free but aren't, and where the costs typically hide.

A quick note before we start: as a sole trader, you're not legally required to have a business account at all. We've covered that in Do sole traders need a business bank account? — most personal account T&Cs technically prohibit business use, so a free business account is usually the simpler route. (Running a limited company is different — see Do you need a business bank account for a limited company?.)

What "free" actually means in UK business banking

When a provider says "free", they almost always mean "no monthly subscription fee". That's it. It doesn't mean no fee on transfers out, no charge on cash deposits, no FX markup on your card abroad, no commission on incoming payments, no charge for accounting integrations, and no monthly fee waiting for you when an introductory period ends.

A genuinely free account, for a typical sole trader's pattern of use, costs you £0 a month including all the things you actually do. That's a much shorter list than the "free" column on most affiliate comparison tables.

One more distinction worth pinning down early: not every "business account" is a bank account. Tide, ANNA and Revolut Pro are e-money institutions, not banks. Your money is safeguarded in segregated accounts at a regulated bank, but the FSCS treatment differs. The FSCS deposit protection limit rose to £120,000 on 1 December 2025 (up from £85,000), which is a meaningful safety net for anyone holding tax money in their account. The protection picture varies by provider — more on that below.

The accounts that are genuinely free for typical sole trader use

By "typical sole trader" I mean: a freelancer, contractor or small service business invoicing 10–20 clients a month, mostly paid by bank transfer, occasional card spend, no cash to speak of, no international clients, balance under £30,000. If that's roughly you, three accounts on the UK market are properly free.

Mettle

Mettle is the closest thing to a genuinely free business account in the UK. No monthly fee, no transaction fees, no transfer fees, no card fees in the UK. It's run by NatWest as a separate brand, with deposits FSCS-protected as part of the NatWest banking group up to £120,000. FreeAgent accounting software is included as long as you make at least one transaction a month, which most sole traders will. FreeAgent's standalone subscription is around £150 a year, so this is a meaningful saving.

The catches are about what Mettle doesn't do, rather than fees it slips in: no international payments, no cheque deposits, no overdraft, and only one person can access the account. Cash deposits are possible at the Post Office, but tightly limited — £500 per deposit, £500 per day, and a £23,000 annual limit. Fine for the odd cash payment, not workable for a cash-heavy trade.

For most digital-first sole traders, frankly, this is the obvious starting point.

Starling Sole Trader Account

A full UK bank, FSCS-protected up to £120,000, with no monthly fee, free UK transfers, free cheque deposits via freepost, and free card spending and ATM withdrawals abroad. Starling is the most genuinely "bank-shaped" of the free options — it has the licence, the regulation and the FSCS coverage, and it does most of what a high street bank does without charging you for it.

The catch is cash. Depositing cash at the Post Office costs 0.7% of the amount with a £3 minimum, and the sole trader cash deposit limits are £5,000 a day and £100,000 a calendar year. Generous on the annual limit — much higher than Mettle — but the per-deposit fee will bite if you handle cash regularly. For a tradesperson, market trader or hospitality business taking cash daily, those fees stack up fast.

The optional Business Toolkit — invoicing, automated expenses, VAT submissions — is £7 a month if you want it. You don't have to take it. If you already use Xero, QuickBooks or FreeAgent, the base account is fine.

Monzo Business Lite

Lite is Monzo's free tier: free UK bank transfers, free contactless card payments, FSCS-protected, no monthly fee. If you don't need accounting integrations and you don't deal in cash, it's properly free.

The catch is the upgrade pressure. Lite doesn't connect to Xero, QuickBooks, FreeAgent or Sage — for those you need Monzo Business Pro at £9 a month. Cash deposits are free up to £500 per month at the Post Office or PayPoint, then charged above that. And foreign card spending on Lite uses Monzo's standard exchange rate, which carries a small markup compared to Pro's near mid-market rate.

For a sole trader who invoices digitally, doesn't handle cash, and is happy to do the bookkeeping side themselves or via an accountant who pulls statements, Lite is a perfectly good free account.

Accounts marketed as free, but with conditions

These three are widely listed as "free" in comparison tables. They're not, quite. Whether the conditions matter depends on how you actually trade.

Tide Free

Tide doesn't charge a monthly fee on its Free plan, and the affiliate tables love it for that reason. But every outgoing bank transfer costs 20p. Every ATM withdrawal costs £1. Each extra expense card costs £5 a month. Cash deposits at the Post Office cost 0.5% of the amount with a £2.50 minimum; PayPoint is 3%. Foreign card spending on the Free plan carries a 2.75% FX fee.

Run the maths for our typical sole trader: 15 outgoing transfers a month is £3 you're paying that you wouldn't pay at Mettle, Starling or Monzo. Not catastrophic. But it's not £0, and Tide's marketing suggests it is.

There's a separate point worth making about Tide: it's not a bank. The accounts are provided by ClearBank, which is a bank and is FSCS-protected up to £120,000, so your money is covered. But Tide as a brand is an FCA-regulated firm sitting in front of ClearBank, not a bank itself.

ANNA Pay As You Go

ANNA's PAYG plan has no monthly fee. The catch — and it's a counter-intuitive one — is a 0.95% commission on incoming payments. Most sole traders don't expect to pay anything to receive money. On £5,000 of monthly invoices that's £47.50, every month, just for being paid. A paid plan starts to look cheaper fairly quickly if you invoice a few thousand a month. ANNA is also an e-money institution rather than a bank, so your money is safeguarded but not FSCS-protected.

Where ANNA does shine is its built-in tax and admin tools — receipt scanning, automatic categorisation, live HMRC liability estimates. For a sole trader who does their own Self Assessment and likes the idea of an account that doubles as a tax helper, the workflow is genuinely useful. Just go in with eyes open about that 0.95%.

Revolut Pro

Worth flagging because a lot of sole traders try to open a Revolut Business account and find they can't — Revolut Business doesn't accept sole traders, only registered companies. The route for sole traders is Revolut Pro, which sits inside the personal Revolut app and is a different product entirely.

Pro is free to open, with no monthly fee. Card payment processing fees apply when you take payments from customers, and FX rules vary depending on which Revolut plan your personal account is on. For a sole trader who already lives in the Revolut app and only wants light business functionality, it's a reasonable free option. Worth checking the current FSCS position with Revolut directly, as their banking licence migration is ongoing.

The "free for 12 months" traps

A separate category worth naming. The high street banks — Barclays, HSBC, Lloyds, NatWest — all run free introductory periods on their business accounts, typically 12 to 24 months, then revert to a monthly fee plus various transaction charges. That isn't a free account. It's a delayed paid account.

If you're choosing a high street bank because you want branch access or expect to need credit, the trial period is fine. Just don't pick one because it's "free" and forget about it. Set a calendar reminder for the day the intro period ends.

Where the costs typically catch sole traders out

A summary checklist of the gaps between "free" and free:

• Cash deposits — even Starling charges 0.7% with a £3 minimum, Tide hits 3% via PayPoint, Monzo gives you £500 a month free then charges above that
• Foreign card spending — free tiers often use marked-up exchange rates even where "spending abroad" is described as free; Tide Free is 2.75%
• Per-transfer fees — Tide Free's specific catch (20p each), which adds up fast if you pay HMRC and a lot of small suppliers
• Pressure to upgrade for accounting software — Monzo Lite has no Xero, QuickBooks, FreeAgent or Sage integration
• Trial-period rollovers — high street banks revert to paid; diary the date your free intro period ends
• Commission on incoming payments — ANNA's 0.95% on PAYG is easy to miss because most people focus on what it costs to send money, not receive it

FSCS vs e-money safeguarding — and why it matters more now

Quick word on this because it's underplayed in most comparison content. As of 1 December 2025, FSCS deposit protection rose from £85,000 to £120,000 per person, per authorised bank. If your bank fails, you get up to £120,000 back, typically within seven days.

E-money institutions — ANNA, and Revolut Pro through Revolut Ltd — aren't banks. Your money is held in segregated accounts at a regulated bank and is meant to be returned to you if the e-money firm fails, but it isn't FSCS-protected and there's no fixed timeline. Tide isn't a bank either, but the accounts themselves are at ClearBank, which is FSCS-protected.

For a sole trader putting money aside for tax, this is a real consideration.

Which one should you actually choose?

A few honest signposts. If you take no cash, have no international clients, and want a proper bank with FSCS cover, Starling Sole Trader is the obvious pick. If you want NatWest backing without going to NatWest, Mettle. If you take light cash, like the Monzo app, and don't need accounting integrations, Monzo Business Lite — but be honest about whether you'll end up wanting that £9 Pro upgrade. If you already use FreeAgent, Mettle again, since it's bundled. If you want built-in tax tools and don't mind paying 0.95% on incoming payments, ANNA Pay As You Go, with eyes open about the e-money status.

If you take a lot of cash, frankly none of these are great. A high street account with branch access is probably worth the monthly fee.

If your situation doesn't fit any of those neatly, the honest answer is: it depends on the shape of your trading, not the headline price. Look at the fee schedule, picture a typical month, and add up what you'd actually pay.

FAQ

Do sole traders legally need a business bank account?

No. As a sole trader you and your business are the same legal entity, and you can technically use a personal account. Most personal account T&Cs prohibit business use, though, so a free business account is usually the easier route.

Is Mettle actually free, with no catches?

For domestic, low-cash, online sole trader use — yes. The catches are about what it doesn't do: no cheques, no international payments, no overdraft, mobile-first only, single user.

Why does ANNA charge 0.95% on incoming payments?

It's how the free Pay As You Go plan funds itself. For very low-volume sole traders it can still work out cheaper than a monthly fee. For anyone invoicing several thousand pounds a month, you'll likely pay more on PAYG than on a paid plan.

Are Tide and ANNA covered by FSCS?

Tide accounts are provided by ClearBank, which is FSCS-protected up to £120,000. ANNA is an e-money institution — your money is safeguarded in segregated accounts but not FSCS-protected. The FSCS limit rose to £120,000 on 1 December 2025, which makes the bank-vs-EMI distinction more meaningful for anyone holding real balances.

Can I open Revolut Business as a sole trader?

No. Revolut Business doesn't accept sole traders. Sole traders are directed to Revolut Pro, which sits inside the personal Revolut app and is a different product. Free to open.

What about high street banks — are any of those actually free?

Most offer 12 to 24 month free trial periods on their business accounts, then revert to monthly fees. Worth considering if you need branch access or expect to apply for credit, but they're not free in any meaningful long-term sense.

Will I be charged anything if I deposit cash?

Almost certainly. Starling charges 0.7% with a £3 minimum (£100,000 annual cash limit). Tide charges 0.5% at the Post Office with a £2.50 minimum, or 3% at PayPoint. Monzo Lite gives you £500 a month free then charges above that. Mettle is closest to genuinely free for cash deposits but with a tight £23,000 annual limit. If cash is a regular part of your trading, factor this in carefully.

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Sam Morris is the pen name of the founder of comparebusinessbanking.com.