The Starling Business bank account launched in 2018, and as the founder of Money Saving Answers I was an early adopter. It’s kind of an occupational hazard when having to test so many personal and business accounts on behalf of our readership.

Recently Starling founder and CEO Anne Boden, said Starling could take over Barclay’s in the business banking market by 2027.

In 2020, Starling had just over 100,000 business banking customers, by the start of 2022, it had doubled that number giving it a market share of nearly 7 per cent. To put that in to perspective, highstreet stalwart Barclays has business share of some 15 per cent.

With a place amongst the big four firmly in its sights, it’s high time we took a deep dive into the Starling Business account with our long-term review.

Background

Starling launched its business account in 2018 after the success of its personal current accounts. In doing so, it became the first UK digital bank to launch a business current account.

Having extensive experience with business bank accounts from the UK’s top highstreet banks, as well testing a number of business accounts and e-payment providers, I moved the majority of my business banking over to Starling.

Opening a Starling bank business account

Before we get stuck in, let’s take a look at eligibility criteria for opening a Starling business account, and the sign up process itself.

Eligibility

Like most UK business accounts, Starling has strict eligibility criteria.

  • You must be over 18 years old
  • Registered business owners or directors must be UK residents
  • Currently only sole traders and limited companies can open a Starling business account
  • Partnerships are not currently supported
  • Limited companies must be registered at Companies House, and present their registration number.

Sign-up process

Start by using our link to sign up to for Starling Bank Account

In our experience the sign-up process is one of the most important interactions you will have with your bank. It gives you a good look at how the bank operates and sets the tone going forward.

Like fellow digital accounts Tide, Cashplus, Monzo, etc… the sign up process for Starling was a breeze. As editor-in-chief of Money Saving Answers, I already had a Starling personal account, opening a business account was nothing more than a few clicks within the app.

Those opening a new business account are best to do so via the Starling Business account website here.

You need photo ID e.g. driving licence, passport, EU/EEA ID card and if a limited company, then your company registration number and articles.

The trickier part is confirming your business type/activity. All banks will require this now as part of anti-money laundering regulations. They want to know how and where your money is coming from.

In the case of Starling, it will accept:

• Invoices
• Bank statements
• Accountants’ letters
• Signed commercial agreements
• Membership of professional bodies etc…

This is not an exhaustive list, and there is some leeway, especially for brand new start ups

All in all, the whole process takes about 10 minutes.

In the past I’ve opened business accounts at Barclays. Whilst the application started online, it ended with a meeting with a Barclays business advisor, usually trying to see what add-ons and other products they could sell me.

Later I started the process of opening a TSB business account on behalf of Money Saving Answers. This also started online, but finished with them sending a 20 plus page application form to be filled out. That promptly got thrown away.

My testing of Santander was better, and for a long time it remained one of the top recommended business accounts on Money Saving Answers. It still is, but there are a number of areas where it doesn’t match up, to the latest digital offerings.

Starling bank business account features

Instant notifications and spending insights

This is something that was pioneered by smart cards and digital accounts, and is now making its way into more traditional bank accounts.

Getting real-time notifications whenever any money leaves or enters your account not only helps with fraud detection, but also means less checking your account to see if certain payments have come in/out. It’s always nice seeing an alert popup on your phone when a client pays their invoice.

Personally, I find the spending insights a little less useful, but for some people being able to get a detailed breakdown of their business’ spending, can help with budgeting and managerial decisions. It can also be a handy place to store receipts, photos of which can be uploaded via the app.

Account software integration

Whilst it’s possible to use the Starling Business Toolkit to estimate HMRC tax and record and submit VAT, those with slightly more complex finances and tax needs are likely going to want use third party software.

Fortunately, Starling integrates with FreeAgent, Quickbooks, and Xero. Our preference is FreeAgent, due to the ability to send tax returns to HMRC directly from the FreeAgent app. If you sign up FreeAgent via our link you’ll get 10% discount on your annual subscription.

Saving spaces

If you need or want to put money aside for your business, Starling offers something call ‘spaces’. Consider these pots (to steal a name from another digital bank), where money can be moved (automatically) to from the main account.

These spaces can be useful for setting money aside for things like taxes, or saving for capital items. You can also apply round-ups to these spaces, helping you to reach your savings goals
more quickly.

You can add money to a space, or keep it topped up to a certain amount, there is no ability to automatically set aside a percentage of incoming receipts. This would be a great feature for tax. It looks like Starling does offer this in the ‘Business Toolkit’ but that is a £7 a month add on.

Unfortunately, unlike the personal account, bills cannot be paid directly from spaces. Hopefully this feature will come in the future, as it would help with budgeting.

Fee free foreign spending

Like the personal account the Starling business account offer fee free foreign spending, online, at the point of sale, and fee free ATM withdrawals. If you’re travelling for business, or dealing with occasional suppliers, or subscriptions from abroad then is a real boon over the main high street business bank accounts.

Euro and dollar accounts

Additionally, business customers can add Euro and Dollar denominated accounts to their Starling package. These cost £2 and £5 respectively. With transfers and conversions between these and main sterling account being set at 0.4%

Whilst these are handy, those with serious dealings might want to check Money Saving Answers’ guide to the best credit debit cards to use abroad. Specialist cards for business spending are included towards the bottom of that article.

Paying in cash

Paying in cash into a Starling business account is not quite as straightforward as popping down to your local branch. Of course, there are none. Instead, Starling customers can pay in cash via the post office.

For personal accounts this service is free. For sole trader and business accounts, there is a 0.7 per cent fee, with a minimum charge of £3.

That compares well with some high street accounts but not all. For example, Barclays customers on the Mixed Payments Plan, will pay £0.90 for £100 for paying in cash, and those on the e-Payments Plan, will pay £1.50 per £100.

Starling customers paying in £425 or more in cash over the counter end up better off. Santander customers enjoy fee cash deposits of up to £1,000 per month, but pay £7.50 a month service charge for the account.

NatWest, matches Starling here with a £0.70 fee per £100 paid in over the counter, without a monthly charge, but then charges £0.35 for every automated payment e.g. direct debits, standing orders, credits, banks transfers etc.

Paying in cheques

Electronic deposits and faster payments have rendered cheques almost useless in modern society, some die-hard fans still cling to their cheque books.

If you’re dealing with customers or institutions that prefer payment by cheque, then Starling could be a good match for your business.

Despite the lack of branches (where cheques still had to be posted away anyway), Starling has a robust paying-in system in place.

Cheques to the value of £500 or less can be paid in directly via the app. Up to ten cheques a week can be deposited this way. Any more than that, or those of higher value need to be posted directly to Starling. There is a freepost address (Freepost STARLING), but Starling recommends you use a tracked mail service for additional piece of mind. These can be sent to:

Starling Bank Operations Team, Brunel House, 2 Fitzalan Road, 5th Floor, Cardiff, CF24 0FG, Wales.

Overdrafts and lending

Overdrafts are available up to £10,000 with limits managed directly from the app. At the time of writing the starting interest rate is 15% AER but this may change as the Bank of England is currently in a period of rate rises.

This rate is bested by Santander’s 10% AER overdraft rate, but again in order to get that you are paying £7.50 a month in account fees.

At the time of writing the Starling business overdraft is on hold whilst the bank focuses on COVID recovery loans. In fact since the pandemic Starling has facilitated £2.2bn business loans to more than 40,000.

Mobile app and online banking

Starling is pretty much top of the pile when it comes to mobile banking. You’d expect nothing less from a digital bank right?

Honestly the switch from Santander to Starling was such a breath of fresh air, I can’t imagine relying solely on a traditional business account again.

Everything can be done/managed within the app, from managing card security, to setting up new payees, all without the OTC code or other hoop jumping that some other accounts make you go through.

Customer service chat and emails are handled via the app, and so far I’ve found the response to be good.

In addition to the app, customers can also access an online banking portal (website). This requires that you use the app to log in, but once you do you are greeted with a clean clear interface, offering almost all of the functionality of the app.

An issue we’ve had with previous banks, is only being able to view historic transactions and other records to a certain seemingly arbitrary date. With Starling transactions are visible from the account inception in 2018 until today.

Almost perfect but…

All being said, there are a few little things that could be improved. Payment confirmation PDFs seemed to be missing from the business banking online portal. They can be downloaded in the app, but not from the online portal. That is a strange one.

Whilst on the subject, there are no payment confirmation PDFs for the Starling Euro account. This is odd, as Eurozone countries can be particularly bureaucratic, and some often ask for a payment confirmation/proof when sending a bank transfer.

Another little bugbear of mine in particular is that the account details aren’t visible on any of the main screens in the app or the online portal. These should be front and centre of any main landing page. Instead, you must go to account details in the online portal, or click in the top right corner in the app, then select account details.

In a similar vein app updates some time in 2020/21, made it ever-so-slightly more of a pain to access your card details. In my opinion, clicking on the card icon/section in the app should immediately show you your card details. Unfortunately for security, this requires an extra step. I’d like to see an option to allow this as super quick access to card details can be useful.

Card details are not visible at all in the online portal. Since you can’t access the online portal without the app, I can partially understand that, but really Starling ought to give you the option.

Despite these minor inconveniences, and believe me, they are minor compared to some traditional banking apps (yes Santander I’m looking at you), the Starling Bank app is one of the top banking apps I’ve come across in all my testing. Only rivalled by fellow digital bank Monzo, and at a push Tide.

Barclays is the closest I’ve seen a traditional bank come to embracing this approach on banking apps, but even then, it still has a few legacy banking hangovers.

Customer Service

Customer service is a key aera of concern for busines owners even more so than personal current account holders. If something goes wrong, or you have an issue you need a swift and decisive response.

One of the main stumbling blocks for many considering opening a digital bank account, business or otherwise, is they worry that without branches, they won’t get the customer service support they need.

That’s a big misnomer for a couple reasons. Firstly, traditional banks seldom handle customer service queries in branch these days. Most customer support is over the phone with long waiting times and call centres often (but not always) based outside of the UK.

Secondly, Starling has won the Best British Bank Account Award for four years in a row. A separate survey conducted on behalf of the Financial Conduct Authority, also found Starling offered top levels customer service, besting out all of the big four high street banks.

Below is a screenshot from Barclays’ own business website, showing Starling leading the way on overall service quality, and Barclays in fifth place. You have to commend Barclays’ honesty here.

Business bank customer satisfaction

In my personal dealings with Starling, queries which are sent via the app have been dealt with quickly. Where a customer service agent didn’t know the answer to particular question right away, they would go away and find out, and then come back with a comprehensive reply.

 

Is the Starling Bank business account safe?

Starling Bank business customers are protected in the same way as their current account counterparts. Firstly, being a fully licenced UK bank customers enjoy full FSCS protection on their deposits up to £85,000

Secondly Starling uses it’s tech to keep your account safe. Starling with video identification at sign up, to instant notifications allowing you to easily check and spot fraudulent activity.

Furthermore, you are able to use freeze the debit card, change limits or turn off certain types of spending.

As with all banks now, Starling has also rolled out 3D secure to protect you when making purchases online. That means you’ll have to authorise the transaction via the app.

Many of these features are common across digital banks, but the traditional banks are slowly catching up here.

In summary – My verdict after 4 years

The Starling business bank account offer all of the same basic features you would expect from a traditional high street business bank account, but then surpasses them.

Fee free foreign spending, instant spending notifications, categorised spending, saving spaces, and marketplace access, all come as standard, but it was the overall ease of use of the account that convinced us to ditch our high street bank for Starling.

If your business is going to be handling large amounts of cash, then the 0.7 per cent fee for deposits may mean you want to look elsewhere. Otherwise, the account is great for sole traders and small business looking for a secure and reliable business bank account. The fact that there’s no monthly fee or even hard credit check, means the barrier to entry is low, and new accounts can be opened in minutes.

For more on business banking, see our business bank account comparison

Alternative accounts

Anyone who’s heard of Starling will also be aware of Monzo. It too offers a business bank account. I don’t have any experience with that yet, though do hold a Monzo personal current account.

Elsewhere, Tide is probably the closest alternative to a Starling Business account. Tide has been offering business ‘bank’ accounts since 2016. It is not a registered bank, but a financial institution with a e-money licence. It has a partnership with ClearBank to ensure customers enjoy full FSCS deposit protection.

In a video interview in 2016 Monzo founder Tom Bloomfield said that Tide in the UK would do a much better job of offering a business account than Monzo. (4:14)

Tide now serves over 300,000 small and medium sized enterprises across the UK. You can find out more about Tide in our overview.

2 Comments

  • Duncan Brack

    I opened a Starling business bank account about two months ago, and have been impressed – with one exception. I opened a euro as well as a sterling account, and a couple of my non-UK clients are requesting verification from Starling that the euro account is genuinely mine. Starling will provide a certified copy of a bank statement (you just download it) and a phone number, but nothing else. They point-blank refused to provide a name and email address, or a signed letter or statement, which is what two of my clients require. The client that needed a signed letter said they had never been refused this before from any bank they’ve dealt with. So I’ll be looking for a different bank, at least for the euro account. A real shame, and it seems odd that they can’t provide what is a pretty simply request.

    • Carl Michael

      I noticed in Spain and other overly bureaucratic countries businesses can ask for such things. Even proof of bank transfer despite the fact you’ve sent something via SEPA instant (note Starling don’t offer SEPA instant payments, nor proof of transfer on the EUR account).

      Within the app as you’ve said there is an account confirmation letter and you can download certified statements. These show your account details, name and address. Your client wanting more is of a statement about them rather than Starling IMO. I don’t believe more is needed under KYC regulations in the UK or EU. I can certainly see your point though, that Starling can’t do this simple request for you.

      A work around could be to have your details confirmed by a public notary. Then send over that confirmation.

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