Our evaluation(4.3/5)
Starling Bank’s business account is a full current account operated from an app.
Features
  • Company: Starling Bank Limited

  • Type of account: Business current account

  • Intended for: Limited companies or sole traders

  • Overdrafts: Available

  • Loans: Available

  • Monthly fee: None

  • Debit card: Included (Mastercard)

  • Credit card: Not yet available

  • IBAN & BIC: Included

Starling Bank
To sign up, follow the link below and download the app on your phone. Follow the on-screen prompts, take a picture of your ID, submit and await approval. It usually takes less than a day to be accepted.

Starling Bank is a fully-fledged, UK-based bank without physical bank branches. Instead, you manage your account almost entirely through a mobile app.

Starling offers current accounts for private individuals (personal accounts) and current accounts for sole traders and limited companies (business accounts). We focus on the business accounts in this review.

Starling offers two types of business current accounts in GBP currency:

Business account: Bank account for limited companies and other registered business entities.

Sole trader account: Bank account for sole traders, self-employed and freelancers without a registered company.

You can also add a Euro or US account, but only after creating one of the above Business accounts. Each account comes with a:

  • UK bank account number and sort code

  • IBAN and BIC for international transfers

In contrast with high street banks, the sign-up is done entirely through the mobile app.

Is Starling Bank safe? Yes, up to £85,000 of your money is protected by the Financial Services Compensation Scheme (FSCS) in each account. Starling Bank’s security is top-notch, using a combination of biometric identification measures, fraud prevention tools, a human support team and more to keep your money safe. It has all the proper licences in place so that it is legitimately a real, regulated bank – just managed remotely.

There are pros and cons of Starling Bank influencing how good of a fit this bank account is for your needs. Let us go through the requirements, costs, features and services on offer.

Who can open a Starling Business account?

To open a Starling business account, there are certain requirements. You will need to be a resident in the United Kingdom and have a UK phone number for registration, though Starling may allow non-UK numbers from certain countries.

Limited companies and other types of businesses or partnerships have to be registered at Companies House in the UK. Only a ‘Person of Significant Control’ can open an account for a registered company, and that person should be a UK resident. Sole traders must also live in the UK and be registered as self-employed.

Only the account owner or Persons of Significant Control may use the account, so you cannot just give the business debit card to staff members. It is not possible to open an extra bank account for the same business, only a new business account for another registered business entity.

Costs and fees

While competing neobanking platforms offer tiered price plans (from free to “premium” plans), Starling’s costs are piecemeal according to what services are used.

The Business accounts for sole traders and limited companies have no monthly fees. Optionally, you can subscribe to an additional feature package called Business Toolkit for £7 per month.

There is no setup charge, and you receive the debit card free of charge after you’ve had the account approved. Starling does not currently pay interest on any business current account, only on their personal current accounts (but there is no Starling savings account).

Business account for limited companies & sole traders Charges
Account creation Free
Monthly fee Free
Business Toolkit add-on £7*/mo
Interest rate None
Debit card Free
Faster Payments bank transfers, Direct Debits, Standing Orders (UK only) Free
ATM withdrawals (UK & abroad) Free
Cash deposits 0.3% (min. £3 charge)
Cheque deposits Free

*Includes VAT.

Business account
for limited
companies &
sole traders
Charges
Account creation Free
Monthly fee Free
Business Toolkit add-on £7*/mo
Interest rate None
Debit card Free
Faster Payments bank transfers, Direct Debits, Standing Orders (UK only) Free
ATM withdrawals (UK & abroad) Free
Cash deposits 0.3% (min. £3 charge)
Cheque deposits Free

*Includes VAT.

It is free to withdraw cash from a cash point in the UK and abroad, though you are not exempt from charges that individual ATMs may add. Cheques are free to deposit through the app or Freepost (by letter), but cash deposits at the Post Office cost 0.3% of the cash amount, where a minimum of £3 is required.

Then there are costs for overdrafts or business loans. Starling offers a business overdraft that depends on your situation and qualifying factors within the limits and interest rates below.

Overdrafts Limited companies Sole traders
Available overdraft limits £250-£150,000 £250-£10,000
Interest rate 5%, 10% or 15% EAR (variable) 15% EAR (variable)
Annual fee (paid upfront) 1.5% (min. £50) of agreed limit None
Over-
drafts
Limited
companies
Sole
traders
Available overdraft limits £250-£150,000 £250-£10,000
Interest rate 5%, 10% or 15% EAR (variable) 15% EAR (variable)
Annual fee (paid upfront) 1.5% (min. £50) of agreed limit None

Business loans are only offered to business accounts for limited companies, not sole traders. The following limits and interest rates apply to loans.

Loans Limited companies
Loan limits £5,000-£250,000 (1-5-year terms)
Interest rate 7% EAR (variable) for loans below £25k, bespoke EAR above £25k loan
Early repayment fee None
Loans Limited
companies
Loan limits £5,000-£250,000 (1-5-year terms)
Interest rate 7% EAR (variable) for loans below £25k, bespoke EAR above £25k loan
Early repayment fee None

Whether there are annual fees or other charges associated with a business loan is communicated to you when the loan application has been reviewed. Starling claims there are no hidden fees, but it is always good practice to read the small print before accepting a loan.

Transfers and use abroad

What about international payments, foreign currency and use abroad?

The Business and Sole trader accounts can only contain and receive British pounds. Bank transfers to another UK-based GBP account are free to do. That said, the business debit card can be used for payments in any currency without added fees.

A Euro bank account and US dollar bank account are available as add-ons after a Sole trader or Business account is set up. They come with their own US or European IBAN and SWIFT/BIC, acting as standalone bank accounts. The US account has an ACH routing number too. There are no options for accounts in other currencies at the moment but Starling Bank is working on adding 21 other foreign currency accounts.

If your client sends a EUR payment to your GBP account, a 2% charge will be added by Starling Bank on top of the real exchange rate to convert that currency into GBP. It is not possible for your clients to send any other currency (including USD) to your GBP account – instead, it will be rejected and sent back to the payer. In the same vein, the Euro account can only receive euros and the US account can only receive US dollars. Inbound transactions in other currencies will be rejected and sent back to the payer.

For that reason, you should make sure that international clients know which currency to bill in. Moreover, connecting banks along the way make charge fees for processing that are outside of Starling’s control, but Starling does not charge for receiving international payments as long as the currency sent matches your account’s.

Sending/receiving money Charges
Business debit card transactions in foreign currency No Starling fee applied, but local fees may apply
Euro account, monthly fee £2
USD account, monthly fee £5
Inbound payment in same currency as account Free
Inbound EUR transfer to GBP account 2% on top of real exchange rate
Transfers between EUR, USD & GBP accounts 0.4% on top of real exchange rate
International outbound transfers – currency conversion fee 0.4% on top of real exchange rate
SWIFT outbound transfer – delivery fee £5.50
International outbound transfer via local partner – delivery fee From 30p
Sending/
receiving
money
Charges
Business debit card transactions in foreign currency No Starling fee applied, but local fees may apply
Euro account, monthly fee £2
USD account, monthly fee £5
Inbound payment in same currency as account Free
Inbound EUR transfer to GBP account 2% on top of real exchange rate
Transfers between EUR, USD & GBP accounts 0.4% on top of real exchange rate
International outbound transfers – currency conversion fee 0.4% on top of real exchange rate
SWIFT outbound transfer – delivery fee £5.50
International outbound transfer via local partner – delivery fee From 30p

There is a £2 monthly fee for the Euro account charged as a monthly subscription that can be cancelled any time. Inbound and outbound SEPA transfers are free from the Euro account. The USD account costs £5 per month and can also be cancelled any time. You can send and receive US dollar transactions for free.

You can also transfer money between your Starling Euro, US and GBP business accounts, which involves a currency conversion fee of 0.4% on top of the real exchange rate. If you regularly receive euro transactions from clients, you can therefore save a lot of money by adding a Euro account to receive free transfers. If you need to move that money to your Business (GBP) account, it is cheaper with the 0.4% currency conversion fee between Starling accounts than to receive euros directly from clients into the Business account which would cost 2%.

The free SEPA transfers with the Euro account and free USD transactions with the US account are really useful for those with clients paying in these currencies. The accounts can also save you money if you travel regularly in Europe or the US and want to avoid the risk of merchants applying their own fees to currency conversions. Starling does not apply a fee when you use the debit card in another currency, but the merchant may use their own exchange rate with additional fees if you choose to pay in the local currency.

The Euro and US accounts do not come with a separate debit card. Instead, the accounts are attached to your Business bank account, even though the different currency balances are separated in the app.

To use the euro or dollar balance with the Business Mastercard, you have to switch on the relevant currency in the card management section of the app. The card will then automatically use e.g. the euro balance for euro transactions and pound balance for pound transactions.

Image: Starling Bank

Starling international transfer

Transfer directly from the app.

For example, if you’re in the eurozone and buy something in a shop, the euro account will be charged automatically. When you get back to the UK and use the card in a shop, the British pounds balance will be used automatically.

You can transfer money between the Business, Euro and US accounts 24/7 including weekends. The exchange rate will be shown to you before the conversion is processed. If you’re doing the transfer during a weekend, an estimated exchange rate will be shown – unless you wait until Monday for the real exchange rate.

It is currently possible to send money to any of 38 countries and 20 currencies. One major economy, China, is missing from this list, but Starling is gradually expanding the options (Australian and Canadian dollars are not added yet, but coming soon). You can choose to set the amount that the payee has to receive, or an amount that the transfer fees are deducted from.

The app gives you different transfer options with different fees disclosed upfront depending on the speed and method of transfer. Starling adds a currency conversion fee of 0.4% to the currency exchange rate. With the local delivery option, Starling adds a flat delivery fee of 30p and a currency conversion fee of 0.4% of the amount being transferred.

That said, Starling Bank cannot control if there are any additional charges added somewhere between yours and the receiver’s account because of Starling’s reliance on external third party providers or inter-banks to process the transfer.

Which is better for international transfers: PayPal or TransferWise?

What’s special about the debit card?

Though Starling Bank does not offer credit cards yet (they’re planning to add it as an option), the Starling Business Debit Mastercard comes free with the business account.

Starling Bank Business card

Starling Business Debit Mastercard

The debit card is managed in the app or desktop account, and I’ve got to say: the card controls are superb compared to the high street banking apps. There is a dedicated section for card settings and information related to the card. Here, you can add the card to your Apple Pay, Fitbit, Garmin Pay, Google Pay, Samsung Pay wallet, cancel and replace the card, get a PIN reminder, and view limits for transactions, ATM withdrawals and mobile wallet payments.

If you lose your card but are not sure whether it’s stolen, lost or misplaced, you can simply lock it via a toggle in the app and unlock it if you found it down your sofa. In many other banks, you can only cancel a card, then wait some days to receive a new one by post.

Moreover, the Starling app gives you options to lock specific types of transactions like card machine or online payments, ATM withdrawals, mobile wallet payments, swipe card and even gambling payments.

If you switch on location-based fraud protection, the app uses the location of card transactions to determine whether the card has been stolen, thereby preventing fraudulent transactions.

Cash and cheques

Does your business deal with cash? No problem. You can deposit cash in any Post Office as long as you have the Business Mastercard. Just hand the banknotes over at the counter, insert the card in the card terminal, confirm the amount deposited and the money will appear in your Starling Bank account immediately.

Note that business account holders pay a charge of 0.3% (minimum £3) per deposit. The maximum amount that can be deposited in one go is £20,000 with a maximum of £250 in coins.

Photo: Starling Bank

Starling Bank cash deposit

Deposit cash at the Post Office by inserting the card, confirm and the money will be in your account.

You can withdraw cash for free from an ATM up to six times a day, but the daily total cash withdrawal maximum is £300. If you take out cash from a Post Office, it costs 50p per withdrawal.

Cheques can be deposited in the app without having to go to a Post Office. In the ‘Add money’ money section of the app, you take a photo of the cheque, then await clearance in your account which normally takes two working days. The maximum cheque amount permitted through the mobile cheque imaging feature is £500, but you can post higher-amount cheques with Freepost to Starling Bank.

Business loans and overdrafts

Starling Bank does not offer credit cards yet, but have announced their intention to do so in the near future. In the meantime, those in need of a cash injection can apply for an overdraft or business loan. But note: Starling has currently paused applications for their own business loans so the bank can focus on providing the government-facilitated coronavirus loans.

The following criteria usually apply for a business overdraft:

  • You must have traded for at least 18 months

  • The sole trader/your business and all directors and partners should have a good credit history (i.e. no arrears or defaults)

  • The sole trader or directors are over 18 years old

  • For a Limited Company or Limited Liability Partnership, all directors and partners must also be willing to provide a personal guarantee

Limited companies can get a larger overdraft (up to £250k) than sole traders (up to £10k). Depending on Starling’s assessment of your company, limited businesses get an EAR (Equivalent Annual Rate) of 5%, 10% or 15% EAR (variable), where 10% EAR is representative. The interest rate for sole traders is 15% EAR (variable).

A new addition to the terms now state that Starling Bank will charge an interest rate based on different factors such as information from sev