Tide vs Santander: comparing free business bank accounts

If you’re starting your own business or freelancing for the first time, it’s a good idea to separate your personal and professional finances from the start. You’ll find it much easier to prepare your annual tax return, for one thing.

But don’t assume that your personal account provider is the best option for your business. Another provider might be able to offer more flexibility, lower fees, or better finance tools.

With that in mind, let’s compare Tide’s free business bank account with Santander’s Business Current Account.

Table of contents

• Tide vs Santander: business bank account options
• Comparing the free business accounts
• Opening a free business account
• Depositing cash and cheques
• Using your card in the UK
• Using your card abroad
• Tools for managing your money
• Independent service quality survey: February 2023
• Summary: Tide is 100% focused on business founders

Tide vs Santander: business bank account options

Tide offers a free business bank account that comes with zero monthly fees. Santander also offers a free period with its Business Current Account, but this is only open to start-ups in their first year of trading and it only lasts for 18 months. After this, the standard monthly fee is £7.50.

Before we devote the rest of this post to comparing these two accounts, let’s look at the other accounts each provider offers.

Tide paid account plans

When you have a free account with Tide, you can upgrade at any time to one of three paid plans:

• Tide Plus (£9.99 per month) 
• Tide Pro (£18.99 a month), or 
• Tide Cashback (£49.99 a month) 

These are worth considering as your business grows, and features such as free transfers, phone support and company expense cards would be helpful.

Note: Members, on any plan, can call the Fraud Rapid Response team by calling 159. Use +44 20 4587 0366 if you’re calling from abroad. Lines are open 24/7.

Santander’s 1|2|3 Business Current Account

The Santander 1|2|3 Business Current Account costs £5 a month for the first 18 months; after that, it costs £12.50 a month. If you’re switching your business account to Santander, the discounted fee of £5 applies for the first 12 months only.

You can also earn up to £300 cashback each year, and 0.10% gross monthly interest on your credit balances, with the 1|2|3 account.

Comparing the free business bank accounts

As we saw above, there are three clear differences between Tide’s free business account and Santander’s Business Current Account:

1. Tide’s free period isn’t capped, whereas you only get 18 months free with Santander before you pay £7.50 a month. 

2. Any eligible business owner can apply for a free Tide account, but Santander is currently only accepting applications from its existing customers who are looking to open a Business Current Account. 

3. There is no trading limit on free banking with Tide. With Santander, your business must be in its first year of trading to qualify for the initial free 18 months. 

Next, let’s compare some account basics:

Although Tide is not a bank, our business bank accounts are provided by the FCA-regulated bank: ClearBank. That means up to £85,000 of your deposits are protected under the Financial Services Compensation Scheme (FSCS).

Santander is an FCA-regulated bank, so up to £85,000 of your deposits would be protected by the FSCS there as well.

Opening a free business account

How to open a business bank account with Tide

Applying for your free business account with Tide takes a matter of minutes once you’ve downloaded the Tide app. All you need to provide is:

• a valid form of photo ID
• a selfie to verify your identity

If it takes longer than a few hours to set up your account, this could be because we require additional information. For example, proof that your business is trading. Once you’re up and running, your Tide card will be delivered within 2-4 business days. 

Applying for a Santander Business Current Account

If you’re already a Santander customer, you can make a Business Current Account application at the Santander website. They’ll ask you a few questions to see if you’re eligible, and then you can book an appointment to talk to a member of their team.

At the time of writing (March 2023), Santander is only accepting new Business Current Account applications from existing Santander customers.

Depositing cash and cheques

With Tide, you can deposit cash at Post Office branches and PayPoints. For cash deposits of up to £500, we charge £2.50, or 0.5% of the cash value for deposits above £500. We charge 3% of the deposit amount at PayPoints.

With Santander, you can deposit cash at any one of their branches or at the Post Office. You can deposit up to £1,000 per month free of charge, then you’ll pay £0.70 per £100 deposited in excess. 

You can’t deposit cheques into a Tide account, but you can deposit cheques free of charge with Santander.

Using your card in the UK

You can make card transactions for free with Tide and Santander, and both providers have a contactless spend limit of £100. 

Both Tide and Santander replace your debit card for free, whether it has been lost or stolen.

Using your card abroad

When you use your Tide card abroad, you’ll pay the Mastercharge exchange rate only. There are no other charges, although you’ll still be charged £1 to withdraw from an ATM (the same as in the UK).

Your card will work for chip and pin transactions, but the mag stripe may not work in some countries. For the full list of countries, see our FAQ on using your Tide card abroad. 

Santander charges a 2.95% currency conversion fee when you use your card to withdraw money abroad or pay in a foreign currency.

Tools for managing your money

• Accounting integration, so you can connect to Xero, Sage, Quickbooks and others for easy finance management
• View-only access for team members, so you can share information safely and securely to get your finance jobs done
• Professional invoice templates that you can customise, send and track straight from the Tide app – so you can get paid on time with no fuss
• Automatic categorisation of your transactions, to help you learn more about your cash flow and financial habits

While Santander’s Business Current Account doesn’t have built-in digital tools, you can connect your business bank account to FreeAgent, Quickbooks, and Xero to help you manage your business finances.

Independent service quality survey: February 2023

As part of a regulatory requirement, an independent survey was conducted to ask approximately 1,200 customers of each of the 15 largest business bank account providers if they would recommend their provider to other small and medium-sized enterprises.

Here’s how Tide and Santander compared in February 2023.

Overall service quality

Customers were asked how likely they would be to recommend their business bank account provider to other SMEs:

Online and mobile banking services

Customers were asked how likely they would be to recommend their provider’s online and mobile banking services to other SMEs:

Relationship and account management

Customers were asked how likely they would be to recommend their provider’s relationship/account management to other SMEs:

Find out more about the Business banking service quality survey at the BVA BDRC website.

Summary: Tide is 100% focused on business founders

There you have it. Two banking providers with very different offers on the table. However, here’s why we think Tide has the edge over Santander for small business owners: 

1. We’re accepting applications from anyone who is eligible
   We want to help all sole traders, freelancers and businesses. As long as you meet our simple eligibility criteria, you could have an account set up in minutes. In contrast, Santander is only accepting applications from its existing customers and the application can also take up to a week.
2. Your free Tide account doesn’t stop being free after 18 months
   Santander’s Business Current Account is only free for the first 18 months, and only if you’re within your first year of trading.
3. We’re completely committed to supporting business founders
   We don’t provide personal banking accounts. We offer simple business bank accounts and tools to help freelancers, sole traders and limited company owners manage their money – and do what they love.

Sources used for this article:

• https://www.santander.co.uk/assets/s3fs-public/AD_documents/final_anb90429oct22h_digital.pdf
• https://www.santander.co.uk/business/current-accounts/123-business-current-account
• https://www.santander.co.uk/assets/s3fs-public/documents/123_current_account_fee_information_document_april_2021.pdf

All sources checked March 2023. The beforehand information is provided for reference purposes only.  We give no warranty of any kind nor accept any liability whatsoever in connection with the sources, nor any third party’s products or services.