In our article ‘Yes, you can use a personal account for business’, Nationwide confirmed it was possible to use one of their personal accounts as a self-employed individual to receive payments from clients/customers.
Ever since then we’ve been inundated with questions regarding a Nationwide business account. Unfortunately, Nationwide doesn’t currently offer business bank accounts, but it might do in the future.
In 2018 with pre-tax profits down 17%, Nationwide considered branching out into the business space, and challenging traditional high street banks for small and medium sized business customers.
Joe Garner the then chief executive said “…we believe we can offer a compelling mutual alternative to Britain’s currently under served 5.6 million small businesses.”
Incidentally, it was in the run up to this that tweets we’d seen by Nationwide on using a personal account for business disappeared and Nationwide adopted a tougher stance on business use. This makes sense if the building society was planning to launch a fully fledge business account it would want to direct the self employed away from using its Flex and Flex Plus products for this purpose.
Just two years later with coronavirus in full swing, Nationwide gave up on its push into small business banking stating “the benefits of offering fee-free current accounts would no longer be enough to cover the costs of providing the service.”
While this might have come as a blow to many current and would-be small owners, there might still be a glimmer of hope.
Garner said to the Financial Times “the proposition worked because it diversified our funding, but the issue is that with base rates at 0.1 per cent, and likely to stay there for a very long time, the economics of our business case just disappeared.”
That quote hasn’t aged well. In the two years since, we’ve experienced near double-digit inflation, forcing the Bank of England to raise interest rates. The base rate currently sits at 3.5 per cent, but many experts are expecting further rises possibly to the 5 per cent mark by autumn 2023.
Are these rate increases enough to see Nationwide revive its business account programme? Taken in isolation, possibly. However, high interest rates have knock-on effect on the housing market, an area where Nationwide is a big player. That combined with weak economic growth and inflation likely to rise further may see the building society sit on its hands so to speak.
In the meantime, those looking for a free or low cost, easy to open business account should see our article on the best business bank accounts to open without a credit check
Nationwide business savings accounts
Whilst Nationwide doesn’t offer business current accounts it does offer business savings accounts. These are available on an instant access, flexible and fix-term basis with interest rates ranging from 0.95 per cent to 3.25 per cent.
The savings accounts are available to limited companies, charities, partnerships, and sole traders. Whilst they cannot be used as a current account, they do make a good place to keep reserves, especially if your main business account isn’t covered by FSCS protection.