Tide vs Coconut: comparing business bank accounts

tide-vs-coconut-business-bank-account

Looking for a new business bank account?

With the rise of new banks and financial apps, you now have more choice than ever before. While this offers plenty of opportunities to find the perfect provider, it can be tricky to choose from services that may seem, at least on the surface, rather similar. Opening a business bank account may not always be your number one priority when starting a new venture, but there are a number of reasons why it makes sense. As well as keeping business and personal finances separate for tax purposes, it also makes sense if you have expansion plans or are seeking investment for your business. More advantages are explained in our article why you need a separate business bank account for your business.

The good news is that Coconut and Tide have a few key points of difference, so you will probably have a clear idea of which service is right for you by the time you finish this article. Tide and Coconut are very different services, although they overlap in several areas, so your choice will depend entirely on the kind of business you are creating and how you prefer to manage your finances.

Before we cover the differences between Coconut and Tide business services, let’s quickly cover why the UK is seeing such a variety of new banks and financial services on the market.

So much more than a business bank account
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Challenger banks explained

Quick history lesson. Before 2008, your choice of bank was limited to the Big Four, who dominated the market. Starting a new bank was incredibly difficult, so it rarely happened. After the 2008 financial crisis, the UK government decided that more choice would safeguard the banking sector, and customers, against future shocks.

These new banks, described as ‘challenging’ the existing Big Four banks, were free to re-imagine banking. This has produced a wave of innovation, focused primarily on digital banking apps and services, and improving ease of use and access to financial services.

While most challenger banks do not have physical branches, they are noted for making it easier to manage your money online or from a mobile app. Speed and flexibility are hallmarks of these new challenger banks.

Another key advantage of challenger banks is that many have specialised to target specific customer needs. Whereas the Big Four banks typically offer everything from basic accounts and business accounts, to specialist investment services and mortgages, challenger banks have focused on niche customer needs, such as personal savings, investing, and business banking.

And that brings us neatly back to the question of Tide vs CoconTiut. Which is right for you?

Table of contents

Tide vs Coconut: the big differences

Tide and Coconut offer different services, so it’s tricky to make direct comparisons. Tide is a business bank account with invoicing and accounting features. Coconut is a mobile accounting app for sole traders.

Previously, Coconut did offer a bank account service, but they have chosen to focus on the accounting side of their product for now.

If you choose Tide, you may also want a full accounting service (like Xero or FreeAgent), although this is not essential. This decision depends on how closely you want to manage your finances. If you have an accountant, they may be able to use the data directly from your Tide account, or they may want to use an additional accounting service. Tide connects to a wide range of popular accounting services, making this process quick and easy to manage.

If you choose Coconut, you will also need a bank account. Coconut is a mobile bookkeeping app that imports the transactions from your bank account, and then helps you categorise your spending, record income, and manage your taxes. Coconut is designed for sole traders, and does not currently cater to limited companies.

Round 1: core features

Feature Tide Coconut
Sole traders ✔️ ✔️
Limited companies ✔️
Cash deposits ✔️ N/A
Freeze/unfreeze card in the app ✔️ N/A
Extra cards for employees ✔️ N/A
Accountancy software integration ✔️ ✔️
Mobile app ✔️ ✔️
Web portal ✔️
information correct as of September 2021

Tide vs Coconut: how much do accounts cost?

As noted above, we can’t do a direct comparison of Coconut and Tide, because Tide is a business bank account and Coconut is currently focusing on their accounting service. However, we can compare the cost of the different services, and explore what you get for your money.

Round 2: account costs

Feature Tide Coconut
Free account ✔️
Starter package price £0 £3.60 per month
Core features Bank account with debit card Transaction categorisation
Expense management Raise 3 invoices per month
Collect payments by Direct Debit Connect up to 3 bank accounts
Transaction categorisation
Raise unlimited invoices
Connect to accounting software
Share data with accountant
Information correct as of September 2021

Both Tide and Coconut offer account upgrades for customers who want advanced features.

Coconut Professional

Upgrade to the Coconut Professional package (£12/month) to get unlimited categorised transactions, unlimited invoices, 4+ connected bank accountants, and the option to give your accountant access to your data.

Tide Invoice Assistant

Tide offers an Invoice Assistant package for £10 plus VAT per month. This add-on package for limited companies is designed to simplify the management of your invoices by automatically matching money received to outstanding invoices. The Invoice Assistant also sends reminders when payments are overdue. This can help improve your cash flow, while also reducing the time you spend on credit control. Invoice Assistant includes 2 x free Direct Debits, powered by GoCardless, which can also simplify and accelerate the process of getting paid.

Invoicing remains free for all Tide customers, but the Invoice Assistant may be a useful upgrade if you send lots of invoices, struggle to get paid, or simply want to spend less time managing your money.

Tide paid account plans

As your business grows, you can upgrade to one of Tide’s paid plans for additional benefits. Upgrade to Tide Plus (£9.99/month + VAT) to get 20 free transfers per month, a legal helpline, and support by phone. You also get a company expense card, which is handy for managing ad-hoc expenses for things like travel, events and meetings.

The Tide Cashback account (£49.99/month) is ideal for established businesses that will benefit from the 0.5% cashback on all card purchases. This plan also gives you a dedicated account manager, 150 free transfers per month, and 3 Company Expense cards for your team to use.

Company formation

One of Tide’s add-on features is the option to register a company. Tide offers this service for free, and it can be completed at the same time you open a bank account. You can use the Tide website to check that your preferred company name is available and then complete the limited company registration process. Tide covers the £12 company registration fee on your behalf. 

Tide vs Coconut: how easy is it to open a business bank account?

As we write this, in October 2021, Coconut is not accepting new business bank account customers. Coconut may resume this service in future.  However, we can compare the process of creating accounts with both services. 

Round 3: opening a business bank account

Application process Tide Coconut
Apply through the app ✔️ ✔️
Quick application ✔️ ✔️
Credit check N/A
Card delivery fee Free N/A
Card delivery timescale 2-5 working days N/A
Replacement card fee Free N/A
information correct as of September 2021

Tide account sign-up

To create a Tide account, simply download the Tide app from either the App Store or the Google Play Store. You will need to provide a form of ID: either a driving licence, passport or European National ID card. You may also need to provide evidence that your business is already up and running, such as HMRC registration, evidence of your qualifications, or signed contracts.

The Tide pledge is that they open 53% of new business accounts in under 10 minutes, 70% in under 60 minutes, and 81% within 48 hours. Tide do not conduct a hard credit check. Your Tide bank card will be supplied for free (replacements are free if you happen to lose your card).

Coconut account sign-up

Just like Tide, the Coconut set-up process is quick and easy. You simply download the Coconut app and complete a simple registration process. Once you have created your basic profile, you can connect Coconut to your business bank account to import your transactions and start managing your money.

Coconut offers a free 7-day trial so you can check out the app and explore the features before deciding if it’s right for you. The basic Coconut plan is £3.60 per month and the Professional plan is £12 per month.

Tide vs Coconut: how easy is it to pay in cash or cheques?

With Tide you can pay in cash at Post Offices (for a £1 charge) or at PayPoints (3% fee). Tide accounts do not currently accept cheques.

As Coconut is not currently opening new business bank accounts, you will need to open a separate bank account with another provider, and then connect your bank to your Coconut account so you can import transactions and manage your money. So the ease of paying in cash or cheques will depend on which third-party bank you choose.

Tide vs Coconut: using your card in the UK and abroad

Tide Coconut
Free foreign transactions Unlimited N/A
Foreign ATM withdrawals £1 per withdrawal N/A
information correct as of September 2021

Tide vs Coconut: customer support

Tide Coconut
Customer service via app ✔️ ✔️
Customer service by phone ✔️
Online knowledge base ✔️ ✔️
information correct as of September 2021

Tide users with free accounts can contact Tide Member Support through the app, or request a call back during working hours. For lost or stolen cards, Tide has an automated phone line. Customers on the Tide Plus or Cashback plans have access to telephone support, as well as a 24/7 legal helpline to assist with tax or contractual issues.

Coconut offers in-app support through chat or email. And Coconut customers can also join the Coconut Bite community to chat with other users.

Coconut: who is it good for?

Coconut has a very clear focus in the business market, and is ideal for sole traders who already have a business bank account, or don’t mind opening a business bank account with another provider. Coconut’s mobile-only interface means that you will have to manage all your finances from a mobile device, which could become challenging if you raise lots of invoices or need to process lots of transactions – processes that may be faster and simpler on a desktop or laptop computer.

If you raise 4 or more invoices each month, Coconut will cost you £12 per month. You may also need to pay for a separate business current account.

Coconut does not currently serve limited companies. If you plan to work with large companies, or just want the protection that comes from separating your personal and professional lives, then you may want to create a company from the start, or possibly become limited once your business is up and running.

Coconut has an accountant portal, making it easy to pass your financial information to your accountant when it’s time to prepare your accounts and pay your taxes.

Coconut is ideal if you want a smart way to manage your money, monitor your expenses and prepare your tax returns. The mobile interface simplifies many of the complex processes that can often distract entrepreneurs from building their business. If you are looking for an efficient mobile-friendly app that puts you in control, then Coconut might be ideal for you.

Read: Limited company or sole trader? What to consider before you choose

Tide: who is it good for?

Tide combines business banking with smart bookkeeping and invoicing features. Tide’s FSCS protected bank account is provided by ClearBank, and the bank account is neatly integrated with their app to give you a clear view of your business performance.

Tide also incorporates some bookkeeping features within the app, including payment categorisation, so you can easily see how much money you spend in different areas (e.g. travel, advertising, office supplies).

You can create and send invoices within Tide, meaning that you can exclusively use Tide to manage your business sales and income. If you prefer to use a separate accounting package, you can easily integrate Tide with accounting applications like Xero, Crunch, FreeAgent, Quickbooks, Sage – and even Coconut. 

If you choose to have your end-of-year accounts prepared by an accountant, you can easily give them read-only access to your transactions, which they can also download as a CSV file. 

Tide bank accounts are ideal for small and medium-sized businesses (both sole traders and limited companies) who want a simpler way to manage their money, while also having access to advanced features that will support them as they grow. Features like invoice insurance and Direct Debit payment options can also help growing companies manage cash flow confidently and securely. And Tide’s free account option makes it easy to get started without any financial commitment.

Tide vs Coconut: conclusion

The great news for businesses right now is that there are plenty of new banks that are striving to make money easier to manage, so you can build your business faster.

Both Tide and Coconut are dedicated to making entrepreneurship more accessible with a range of intelligent digital services. However, they have several key differences which are likely to help you make a decision, depending on your current needs and future goals.  

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350,000 fellow business owners, just like you, already love our features:

✔️ Register your business for free

✔️ Open a business bank account with no monthly fees

✔️ Create and send free customised invoices

✔️ Predict your cash flow and improve your credit score

✔️ Unlock exclusive member perks and discounts

✔️ Get 24/7 legal support with Tide Plus and Cashback

Open your business bank account with Tide today 🚀


Sources used for this article

  1. Coconut website – https://help.getcoconut.com/en/
  2. Tide website – https://www.tide.co/
  3. Wikipedia – Challenger banks

Caroline Wire

Small Business Copywriter

Tide Team

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