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Opening a business bank account offers many benefits, including keeping your personal and business finances separate.

If you’re torn between two accounts, you might be wondering if you can open both. Here’s what you need to know.

Key takeaways

• You can open multiple business bank accounts if you meet the eligibility criteria and your bank approves your application

• Having more than one business bank account allows you to access a wider range of perks and separate funds for different purposes

• Opening a second business bank account can be helpful as your business grows

• Managing multiple business bank accounts can be challenging, so it’s important to review your transactions regularly

Can I have two business bank accounts? 

Yes, in theory, you can open as many business bank accounts as you like, provided you meet the eligibility criteria and the bank approves your application. Certain providers might limit the number of bank accounts you can hold with them, but that doesn’t mean you can’t open other business bank accounts elsewhere.Ìý

Opening multiple business bank accounts can enable you to take advantage of different account benefits and perks. For example, one account might offer accountancy and invoicing tools to assist you with everyday transactions, while another might offer fee-free international transactions.Ìý

But having more than one account also means you have more admin and paperwork to deal with, so it’s essential to know how to stay on top of your account management.Ìý 

Read more:

• Do you need a business bank account?

Pros and cons of having two business bank accounts

If you’re considering opening two different business bank accounts, be sure to weigh up the advantages and disadvantages first.

Pros

• Enables you to separate funds: Opening more than one business bank account can help you to separate funds for different purposes. You might use one account to set aside money for salaries and expenses, and another for holding future tax payments 

• Wider range of perks and benefits: Holding multiple business bank accounts can enable you to take advantage of more perks and benefits. You could keep your tax payments in a high-interest account, for example, and earn cashback on all your business spending with another

• Improved cash flow: Separating your finances into different accounts makes it easier to track and manage cash flow  

• Better fraud protection: By spreading your company’s funds across more than one account, you limit the amount of damage a criminal can do if they access one of your accounts 

• Greater financial protection: The Financial Services Compensation Scheme (FSCS) protects deposits of up to £85,000 per banking group. If you have more than this in your bank account, you should transfer the excess to another account with a provider from a different banking group to ensure all your funds have FSCS protection.Ìý

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• More admin: Having more than one account can become confusing if you don’t stay organised.

• You may need to meet certain conditions: Different business bank accounts can have different criteria, such as maintaining a minimum balance, so you need to stay on top of this.

• Additional account fees: Some business bank accounts charge monthly or annual fees, which means if you have more than one account, you could end up paying multiple charges.Ìý 

• Credit score impact: Opening more than one account in a short space of time can damage your credit score if you undergo a check each time. It’s safer to spread out your applications by three to six months.

When to open two business bank accounts 

If you’ve just started your business, you might want to stick to one business bank account while you get your business off the ground. But as your business grows, you might find it easier to open a second account to help you separate funds or take advantage of different features.

For example, if you’re beginning to hire staff, you might consider opening a second business bank account to manage staff salaries. Or, if you’re about to start trading overseas, you could open another business bank account to carry out international transactions at a reduced rate.

How to manage multiple business bank accounts 

If you choose to open multiple business bank accounts, the following tips should help you to stay on track:

Give each account a purpose

Firstly, make sure each account you open has a set role. You might choose to have one account for dealing with multiple currencies, another to handle tax obligations, and another for managing expenses and salaries. This enables you to allocate funds more efficiently.

Categorise your transactions

It’s also sensible to categorise all your transactions so that you have a clear idea of what’s being spent where, helping you to budget better and manage cash flow. Some accounts include accountancy software and automation tools that can do this on your behalf.Ìý

Regularly review your accounts

This is particularly important when you have more than one business bank account as it can be easier to miss fraudulent transactions or payments that have gone into the wrong account. Try to review your bank statements each month to avoid this.

Consider who has access

Establish clear rules on which members of your team should have access to which accounts. You should regularly review and update these permissions to reduce security risks.Ìý

How to open a second business bank account

It should be relatively straightforward to open a second business bank account. You can often do this online by filling in an application form and providing some personal and business details. You might also need to provide ID documents and proof of address if you don’t already hold an account with the provider.Ìý

In some cases, your business bank account can be up and running on the same day. In other cases, it might take between one and four weeks.