What is a business bank account?
Definition of business bank account
A business bank account is a bank account that’s used only for business transactions rather than personal finances. It can be opened in the name of the business, allowing payments to be made and received using the business’s name.
Business bank accounts operate in a similar manner to personal bank accounts. However, business account holders can often access services that are unavailable to personal account holders, including:
- carrying out transactions in foreign currencies
- carrying out credit checks on other businesses and suppliers
- processing salary payments
Business bank accounts are typically available to sole traders, partnerships, limited companies and other business types. Types of business bank accounts include business current accounts and business savings accounts.
Frequently Asked Questions
Do I need a business bank account if I’m self-employed?
Not necessarily. If you’re a sole trader or a partner in a partnership then you could use a personal bank account to manage your business’ finances, although there are a few good reasons why you might choose to open a business bank account anyway.
However, if you’re the director of a limited company then you will need to set up a business bank account for the company.