If you’re setting up your own business, or are a business owner already, you might be interested in commercial banking services from HSBC. There’s a range of products available, including accounts for brand new businesses, and services designed for companies which are already established with a turnover of up to £2 million.¹
When you’re choosing the right account for your business, it’s crucial to look at the full list of features and fees, and consider what services you might need now, and in the future. Compare the business bank accounts available from traditional banks, with modern alternatives such as the borderless account for business, from TransferWise.
Here’s a handy guide to help you decide if a HSBC business bank account is right for you.
HSBC Bank offer a few different account options suited to business owners. There are also accounts available for community associations and charities, as well as corporate banking for very large business customers. Here are a few of the more popular options for UK businesses.
Sole trader, start-up founder, or planning on launching your new business soon? The HSBC Start Up Business bank account allows you to access fee-free banking for up to 18 months, before switching to a plan which charges a monthly fee for your banking needs.¹ You can access loans and advice to help start and grow your business, including information on how to trade internationally. This account comes with a debit card, and access to online and mobile banking, as well as in branch banking services.²
This account type is designed for businesses with a turnover above £2 million a year³. You may be able to get help to switch to this account from another bank if you wish, and have several different choices about how to manage your account once it’s open. You’ll have a personal relationship manager who can help you access the services you need to grow your business, and you can get a debit card and other financial products if you need them.
HSBC offer a couple of different account options which may work for your business if you trade in a currency other than sterling. A foreign currency account can be opened in any major world currency, and you might earn interest on the money held in the account, depending on the currency you choose. Accounts are offered for day to day banking, and also for fixed term deposits if you wish to leave a sum of money for a period, and don’t need to make any withdrawals.⁴
You can also get a client currency account if your business holds funds for clients - if you’re a real estate agent, or an FCA (Financial Conduct Authority) regulated credit association, for example. For more information on HSBC foreign currency accounts, you can check out this HSBC business currency account guide.
Doing business overseas and need to make international business payments? TransferWise could save you money versus your bank.
When you have to pay employees or suppliers overseas it might seem logical to do this with your bank. You already have an account there, they have all your information, so it just seems easier. Although these are valid reasons, easier certainly doesn’t mean cheaper.
Most banks won’t convert your money with the mid-market exchange rate when you make an international payment. Instead they add a mark-up and charge you a hidden fee that way. TransferWise is different. Its smart technology skips hefty international transfer fees by connecting local bank accounts all around the world. Which means you can save up to 8x by using TransferWise rather than your bank when you send your money abroad.
TransferWise also has a lot of additional features for business users. You can connect with Xero to make your life easier, upload a batch of payments in one go or even automate your payments by integrating with our API. And there’s more to come in the future.
Each business bank account type has different eligibility requirements. The Start Up Business Bank Account is typically available to people who are planning to launch a business, or who have a company with an actual or estimated turnover of under £2 million annually.
If your business is larger - with a turnover exceeding £2 million a year, the Large Business Organisation Bank Account might be a better choice. An HSBC relationship manager can advise you if this is available to you, based on your specific circumstances.³
To open a Start Up business account with HSBC, you can complete the application form online, call to talk to customer services, or visit a branch. If you’re looking to open, or transfer an existing larger business account to HSBC you will need to talk to a relationship manager to get advice about the products available to you, and how to process your application.
In each case you’ll be asked to provide some documents to get your account up and running, including the following:
- Proof of identity - this can be a current passport or photo ID such as a driving license, or a national identity card
- Proof of your address - a current bank or building society statement, utility bill or council tax bill which shows your full name and registered address
- The address of your business, including contact details and Companies House registration number if relevant
- The turnover, or estimated turnover of your business, and the amount invested in it⁶
- Information about yourself and any other director or partner in the business, such as your full names, and birth dates, contact details, and details of your existing HSBC bank accounts if you’re already a customer. If you’re opening a large business bank account, you’ll need to provide details of anyone owning 25% or more of the business⁷
To get a specialist account such as a Client Currency Account, you will also need to provide further details such as your FCA registration and information about the type of work you do.⁵
The fees charged by HSBC for your business bank account will vary depending on a number of different factors.
New customers may get a fixed term fee-free banking period, which is then followed by a further option of a reduced fee product, before switching to the regular prices. There are also different tariffs for existing customers, depending on the exact services you choose, so it’s worth looking carefully at the pricing details to make sure you select the right package for your business.
Here are some example costs to consider⁸:
|Open an account||Free|
|Fees to maintain the account||After the free banking period, there is a monthly charge of £5.50|
|Bill payments||Small business tariff - 23p per payment online or using automated phone banking; £3 for a phone payment via an operator; £5 for an in-branch payment. Electronic banking tariff - Payments made online or using automated phone banking are free; £3 for a phone payment via an operator; £5 for an in-branch payment|
|Paying into the account in branch||Small business tariff: cash deposited in branch - 0.6% of value of payment, cheque deposited in branch - £0.30. Electronic banking tariff: cash deposited in branch - 1% of value of payment, cheque deposited in branch - £0.40|
|Card services||Small business tariff - 25p per ATM withdrawal or debit card usage in the UK. All business accounts unless otherwise arranged: Non sterling payments cost 2.75% of the value, and non-sterling cash withdrawals 2.75% + 1.5% (minimum £1.75)|
|Receiving an international payment||£6-£11 depending on the currency and location of the sender’s bank|
|Making an international payment||SEPA payments £4 International payments £17-£40 depending on the payment route There may also be a markup added to the exchange rate used, more on that below|
One thing to look at, if you need international payment services for your business, is the exchange rate used for currency conversion. HSBC will use their daily exchange rate for any currency conversion you ask them to carry out, and will inform you of the rate before the payment is confirmed.
It’s a smart idea to compare the rate given to the mid-market exchange rate, which is the one banks use when buying currency, and the one you’ll find on Google. However, this rate isn’t always passed on to customers. Some banks and exchange services choose instead to add a markup to the rate they use, to increase their profit. This can make your international transfers more expensive than you expect.
One service which always uses the mid-market exchange rate is TransferWise. You can send and receive payments using TransferWise, with the mid-market exchange rate, and for just a low transparent fee. Or you might be able to save even more time and money by opening a TransferWise borderless account for business, for cheap and secure payments all over the world. Check out the fees and benefits of a borderless account, here.
To talk to a specialist member of staff, you can call the following numbers:
- For start-up services: 0800 7318904¹
- For large business banking services: 03457 606060, or 0800 4346933 to arrange a meeting with a commercial manager³
If you’re interested in learning more about the options for secure, cheap and convenient international payment and account services from TransferWise, you can contact the dedicated business customer support by email on firstname.lastname@example.org, or by phone on +44(0)2038087139
Getting the right banking option for your organisation is essential, to make sure you’re not paying more than you need to, and allow you to focus on running your business. Doing some research in advance can pay big dividends, as the functionality and costs of different accounts can vary widely. HSBC offer a range of products for UK business customers. However, if you need a multi-currency account, or expect to send and receive international payments frequently as your business grows, it’s worth comparing the products available against a specialist business account from TransferWise, to see which will work best for you.
All sources checked on 05-March 2019.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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