There are a few questions I always get asked by newbie Amazon FBA sellers and one of them is, “Do I need a business account or can I simply use my own normal personal account?”
And my answer is always the same – while you don’t technically need one, it’s not an Amazon requirement for example and they’re happy to pay into personal accounts* I always suggest getting a dedicated account solely for Amazon FBA business. And there are a few good reasons for this:
- It makes tracking your FBA business expenses and income so much easier, which also means:
- It saves you time and money when it comes to doing your yearly self-assessment.
- It builds your business’ credit history.
- It helps a lot with making sure you reinvest any profits (as much as possible of course) which is extremely important when you’re just starting out on your online selling journey.
So now that we’ve decided you do need one, the follow up question is always so what’s the best business bank account for amazon sellers in the UK?
And that’s exactly what we’re going to go over in today’s blog post.
But I’m not going to simply bombard with you a long list of every available option with a boring comparison table with all the basic info… as you can find that kind of thing countless places online. Instead I’ll suggest 3 companies, based on my years of experience and the countless real life feedback I’ve received from my blog readers and Amazon Sharks members.
3 Great Banks for Amazon FBA: Tide, Revolut and Starling Bank
Tide offers 3 different account options – Free, Plus, and Cashback. The Free account is, you guessed it, free. The Plus account is £10 +VAT a month, and the Cashback account is £50 +VAT a month.
I’ll focus on the Free and Plus accounts as they’re better options for the vast majority of new Amazon FBA sellers, and the main difference is with the Plus account you get:
- 20 free transfers a month (vs 20p per transfer)
- 1 free team card (vs £5 a month)
- phone support and priority in-app support
So not a huge difference as you most likely won’t be making multiple business transfers a month and the fee is only 20p.
Personally though I think the phone support is a big bonus as I hate online accounts without a UK phone number. If there’s something wrong with my business account, I would want to be able to speak to someone urgently and not depend solely on app support.
There’s also good accounting features, with integration with leading software such as Xero, Sage, and Quickbooks, as well as the ability to grant your accountant read only access.
The rest of Tide’s fees are equally reasonable, with a £1 charge for cash deposits and ATM withdrawals and free card payments in the UK and abroad.
Lastly let’s take a look at Tide’s Trust Pilot rating. Now I know I know, Trustpilot isn’t exactly a great indicator of how good a company or service is, I mean just take a look at PayPal and their 1.2 star rating!
However it can be useful as a comparison. And for Tide they’re sitting at 4.0 stars from over 6,500 reviews.
Ok now moving on to our next bank…
Just like Tide, Revolut also have three main account levels:
- Free – £0 per month
- Grow – £25 per month
- Scale – £100 per month
As you can see the price difference between each account is higher, but there’s also a bigger difference in features and fees.
Comparing the Grow and Free accounts, for £25 a month you get:
- 1 free metal card (vs £49)
- 10 free international payments (vs £3 per payment)
- 100 free local payments (vs 5 free local payments – 20p fee for any additional)
- £10,000 foreign exchange at the interbank rate (vs a 0.4% markup)
- £2,000 free UK consumer card payment acceptance (vs a 1.3% fee)
- 10 included team members (vs 2)
Which to go for will depend on your individual circumstances. For some people the interbank exchange rate alone will make the Grow account better value for money but for others the Free account will offer everything you need to get started.
One of the main benefits of Revolut is that they allow you to hold virtual accounts in multiple different currencies, so you can accept payments in EUR or USD for example and use that directly to make payments in that currency or convert it to GBP whenever you like. A very useful feature if you have a lot of international customers.
At the moment Revolut is lacking in invoicing and payroll features, but they’re apparently coming soon.
Last but not least, let’s take a look at their Trustpilot rating:
And with a 4.3 star rating from 75,000 reviews, they beat out Tide!
Lastly we have:
3. Starling Bank
Now Starling are a little bit different as while they’re not on the high street, they are a fully regulated UK bank (more on that a bit later), so that puts them somewhere in between our two categories.
And for me overall if I had to recommend one company today, it would be Starling. I’ve had a lot of good real life feedback about them from my Amazon Sharks members and personally that counts for a lot.
They offer a business current account with no monthly fees with optional extras/upgrades, such as a EUR or USD account for £2 or £5 a month.
The basic account includes free UK ATM withdrawals and bank transfers as well as free ATM withdrawals abroad.
There’s full integration with Xero, QuickBooks, and FreeAgent but disappointingly they don’t offer read only accountant access yet.
Starling also offers business overdrafts once you’ve been trading for a certain period, which neither Revolut nor Tide currently do. Tide offers a workaround for this by partnering with Iwoca for business loans but I don’t consider that the same at all.
This is one of the benefits to Starling being a fully registered UK bank, the other big point being that you get FSCS protection. This means that your money is covered up to £85,000 by the Financial Services Compensation Scheme in the unlikely event that the bank becomes insolvent. Tide and Revolut aren’t covered in the same way.
I think we’ve had enough financial crises in recent years for that peace of mind to be worthwhile.
So let’s see if the Trust Pilot reviews mirror our Amazon Sharks members’ feedback!
And they do, with a 4.5 star rating from over 20,000 reviews, beating out both Tide and Revolut.
So there you have it!
Now you might be wondering why I didn’t include any of the traditional high street banks in our comparison and instead went for only the newer online only business accounts.
This isn’t because high street banks aren’t suitable, because they all do offer dedicated business accounts as well – but generally the application process is more difficult and takes a lot longer and you sometimes need to already have a personal account with them in order to be eligible (as is the case with Starling as well).
Also most people will already have their own experiences and opinions when it comes to high street banks, so there’s not a lot for me to offer here.
Their business accounts are in general very similar, with comparable fees and features.
And broadly speaking they have worse apps and functionality than the online banks but you get other benefits like business loans and overdrafts, as well as the FSCS protection of course.
I’ll leave some links here if you want to look into them further and see what they’re offering compared to the banks we looked at in this post:
Barclays Start Up Business Account
NatWest Business Start Up Account
Lloyds Start Up Business Current Account
As always I’d love to hear your feedback so if you have a recommendation for the best business bank account for sole traders, let us know in the comments down below.
Otherwise, until next time!
All the best,
DISCLAIMER: his applies to sole traders. Ltd companies on the other hand are legally separate entities so you shouldn’t be using a personal account for your company’s expenses.
Click Here to Leave a Comment
Do you need a bank account if you work with Wise, or is Wise enough?
You would get an actual account with Wise.
With the new Amazon PSP regulations, the only online bank that Amazon accepts as a deposit method is Wise (Transferwise) as far as I am aware. We have been enquiring about this with Revolut who are apparently aware of the issue and in negotiations with Amazon but so far I haven’t received any information about it. If anyone has any latest info on other online banks such as Tide please share as I am going to have to change banks due to this 🙁
I’m waiting to see if Tide and Revolut resolve this in time but it doesn’t look likely! From June onwards they’ll have a reserve period of 21 days for payments to these accounts and from July 15th payments will be stopped completely.
We approached the high street banks and they are not opening new accounts for 12 weeks in most cases during the covid crisis, how this will impact the economy is also something I worry about! We went to Metro Bank and seem to be getting quite a bit of help and cannot fault them so far so hopefully, we get a result.
I believe the 12 weeks was connected to the Covid business support scheme the government was running which led to a number of new business accounts being opened. It should hopefully not be taking as long now!
I have set up a tide account for a new Amazon business but have had the card refused by Amazon as a deposit method. Tide tell me this is because it is a pre-paid mastercard and not the same as a debit card. Is there a workaround for this?
Apparently there are some new issues with online only banks and accepting payments from Amazon (they seem to be fine for making payments but not the other way around). For now I would suggest Starling or one of the other high street banks as a safer option.
Hi Andrew – Amazon don’t accept Revolut anymore as it’s a PSP not on their approved list. They also don’t accept Tide from what I’ve seen others mention on the groups.
Yes I saw some recent updates with this. With Revolut apparently it’s an issue with the IBAN, which is something they’ve been promising to add for a while, so it’s disappointing that still hasn’t happened.