Tide vs Lloyds: comparing free business bank accounts

If you’re a sole trader or limited company owner, it’s a good idea to manage your finances by opening a business bank account separate from your personal account. This makes things like filing taxes, overseeing your business’s cash flow and maintaining good financial records much simpler.

Even if you’re happy with your personal account provider, it may not necessarily be the best option for your business.

In this post, we compare Tide’s free business bank account with the Lloyds Bank account for start-ups and small businesses.

Table of contents:

• Tide vs Lloyds: business bank account options
• Comparing the free business accounts
• Opening a free business account
• Making and receiving electronic payments
• 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 remains 100% focused on its founders

Tide vs Lloyds: business bank account options

Tide offers a free business banking account, while the Lloyds Bank account for start-ups and small businesses is free for the first 12 months. We’ll be comparing both accounts in this post. But first, let’s look at all the other business account options they offer.

Tide account plans

If you’re looking to scale your small business and would benefit from advanced features you can upgrade from our free business bank account to our paid plans:

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

These accounts are designed for growing businesses that require more flexibility and support. You can scale at ease with free transfers, company expense cards, phone support, and more.

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.

Lloyds business accounts

The Lloyds Bank Business Current Account has a monthly charge of £7 after the initial 12 months free. This account is focused primarily on small businesses.

For larger businesses there are three different tariffs: 

• Electronic Business Tariff (£20 a month)
• Business Extra Tariff (£15 a month) 
• Specialist Accounts Tariff (free)

These tariffs offer businesses free transfers and reduced rates on other transactions.

Comparing the free business accounts

There are two notable differences between Tide’s free business account and the Lloyds Bank Business Current Account:

1. There is no time limit on your Tide account’s ‘no monthly fee’ period. But the Lloyds Bank Business Current Account is only free for the first 12 months. 
2. You can only open a Lloyds Bank business current account for start-ups and small businesses if your annual turnover is less than £3 million. There is no such restriction with Tide.

Now, let’s compare some account basics:

Tide is not a bank, so we provide business current accounts via our partner ClearBank. ClearBank is a fully-regulated bank and their accounts are FSCS-protected, which means up to £85,000 of deposits in a Tide account are protected.

Lloyds is a fully-regulated bank and therefore up to £85,000 of your deposits will also be protected by the FSCS.

Opening a free business account

Opening a Tide business account

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

Unless we require more information from you, your account will be ready within the hour. For example, some basic information about you and your business. You’ll then receive your debit card in 2-4 working days.

Applying for a Lloyds start-up business account

After you submit your application with Lloyds, they will need to check that they have all the information they need. Once that is confirmed, it will usually take up to 6 weeks to open your account.

Making and receiving electronic payments

You can send money electronically free of charge between Tide accounts. To send money to (or receive money from) any other bank account, there is a £0.20 charge.

Lloyds provides free electronic payments during and after your free banking period.

Depositing cash and cheques

Tide:

• Tide accepts cash deposits at Post Office branches and PayPoints
• Deposits at the Post Office: Tide charges £2.50 for cash deposits up to £500, or 0.5% of the cash amount for deposits over £500
• At PayPoints: Tide charges 3% of the deposit amount
• You can’t deposit cheques into a Tide account

Lloyds:

• With Lloyds, you can deposit cheques for free in the first 12 months
• After 12 months, there is a £0.85 charge for cheques in or out (of any value)
• Lloyds charges £1 per £100 for cash payments (in or out) up to £1,500 per month
• Lloyds charges £0.90 per £100 for cash payments (in or out) above £1,500 per month

Using your card in the UK

It’s free to make UK card transactions with both Tide and Lloyds. They each provide a contactless spending limit of £100.

At Tide you’re charged £1 for an ATM cash withdrawal, however, it’s free with Lloyds.

Both providers replace a lost card free of charge.

Using your card abroad

When you go abroad and use your Tide card, you’ll only pay the Mastercharge exchange rate. You won’t incur any extra charges, although ATM withdrawals cost £1 (which is the same as in the UK).

Lloyds will charge you a foreign currency transaction fee of 2.99% of the value of the transaction. For each withdrawal, you’ll also be charged £1.50, although there is no charge for withdrawing euros inside the European Economic Area. 

Tools for managing your money

Tide’s free business account comes with a variety of tools to help you manage your finances:

• Accounting integration ‒ connect to Xero, Sage, Quickbooks and others to manage your finances seamlessly
• Automatic categorisation of your transactions ‒ learn more about your cash flow and financial habits
• Create, track and send customised invoices ‒ get paid on time hassle free

With a Lloyds account for start-ups and small businesses, you can benefit from:

• Free online training, webinars and more
• Access to other expert resources (depending on the account)
• A free 3-month trial of Connect Business Finance Assistant accounting software

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 current account providers if they would recommend their provider to other small and medium-sized enterprises.

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

Overall service quality

Customers were asked how likely they would be to recommend their business current 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 remains 100% focused on its members

As you’ve seen, Tide and Lloyds both provide business bank accounts that offer great features to small businesses. The Lloyds Business Current Account comes with no monthly charges for the first 12 months, as long as your business’s annual turnover is under £3 million.

But here’s why we think Tide has a competitive edge:

1. You can open an account in minutes with Tide
   Once you’ve downloaded the app, we can have your account up and running in just a few minutes. In contrast, new business customers at Lloyds can expect to wait for up to 6 weeks.
2. We’re 100% focused on founders
   Unlike Lloyds, we don’t offer personal current accounts. We’re here solely to help you work for yourself – whether you’re a sole trader, freelancer or a limited company owner. Saving business owners time and money is our core mission.

Sources used for this article:

• Lloyds current account for start-ups and small businesses
  https://www.lloydsbank.com/business/business-accounts/startup-small-businesses.html 
• Lloyds business bank account
  https://www.lloydsbank.com/business/business-accounts.html
• Lloyds account for larger businesses
  https://www.lloydsbank.com/business/business-accounts/larger-businesses.html

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.