Online business account: definition and advantages

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Whether you're a small business owner looking for your first business bank account or simply considering a new one, you've probably noticed some of the newer banks offer entirely online customer experiences. Some accounts provide both consumer and business accounts, while others focus exclusively on business banks. In either case, you're likely to have some questions about what an online business bank account has to offer, how it differs from traditional banks, and the associated benefits and drawbacks.

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Cora Samantha
Aug 17, 22 · 5 min read
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Your business account is where the founder puts capital, pays suppliers, and customers deposit money when they acquire products and services. Business accounts are distinct from personal accounts. 

Everything you need to know is right here!

What is an online business account?

You may be questioning why this is necessary, particularly if your current bank offers online business accounts. Online-only business bank account providers operate entirely online, which means there are no physical locations and you may open and manage the account from anywhere.

Entrepreneurs, self-employed or salaried individuals, and businesses, among others, require a bank account dedicated to their operation. Their money is held in a bank account, which enables them to conduct transactions and save money. Nowadays, an individual may open and manage an online account from the comfort of their own home. These accounts come with a variety of offers and features that you may find interesting.

From a financial standpoint, online business accounts are the best alternative to help you manage your finances.

What are the advantages of an online business account?

Online business bank accounts are affordable, simple, and user-friendly. While online accounts may differ from more traditional choices, they may offer additional services or capabilities not available at a regular high street bank.

Due to the absence of physical branches, online banks may provide affordable rates and make a concerted effort to provide excellent customer service via 24/7 helplines and support.

They are simple to open and operate, and some have minimal or no monthly fees.

Online business accounts typically provide competitive interest rates and convenient payment options such as mobile and internet banking.

Online business accounts provide a plethora of options and services tailored specifically for businesses, and many include 24-hour customer support via app or email with help from real humans.

The use of mobile banking apps help business owners to bank on the move, including account alerts and text banking – you may, for free, deposit cash, check account balances in the app, through text, or configure the app to receive alert messages when your account falls below the current required minimum amount. All these without extra charges.

Additionally, they support alerts for immediate payments. Receive notifications the moment you pay or receive payments, as well as a reminder the day before payments are due. This might help you in separating areas for distinct charges, such as tax and overheads.

Online bank accounts have reduced the need for cash transactions.

Is it easy to open an online business bank account?

Yes. Typically, starting an online business bank is significantly easier than obtaining a regular business bank account. Wait periods for creating a business bank account online vary depending on the bank you select. They might range from minutes to weeks. 

The majority of online banks will tout speedy account setup as a selling factor; some even offer same-day business bank accounts. Meanwhile, while you may be able to apply for a bank account online through a traditional bank, the procedure may take far longer.

These accounts may come offering free months in business banking.

What documents are required to set up an online business account?

To open an online business bank account, you will typically require the following documentation:

  • Photo ID.
  • Proof of address.

Additionally, you may be required to provide:

  • Your business address (this can be your accountant's or, if you do not have business premises, your home address).
  • Details about your contact.
  • Registration number with Companies House (for limited companies and partnerships).
  • Annual equivalent rate (AER) (Many current businesses banking online accounts provide a 0% AER , however some offer current accounts with a 0.1 percent to 0.25 percent AER).
  • Personal information about your banking or credit history.
  • Details about the company's directors and/or account signatories.


If you need to open a business bank account or are seeking for a new bank that will better fit your business needs, opening one online is frequently the simplest option. Online business bank account applications are available from both online-only banks and, increasingly, high street banks.

Because the majority of high street banks formerly needed an in-person meeting to grant a business bank account, online banks were able to disrupt the status quo with innovations such as remote account opening.

When opening an online bank account, it's critical to examine what's best for you and your business, such as:

  • A useful app
  • Card terminals for payments in person
  • Financial borrowing support such as credit cards
  • 24-hour support

How to open an online business account?

You will need to:
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1. For the majority, you only need to demonstrate that you are a registered business

Some will even help you register with Companies House as part of your application

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