Coconut is a digital banking service that offers a current account to freelancers, the self-employed, and small business owners. Coconut is based in the UK and registered with the Financial Conduct Authority (FCA). When customers register with Coconut, their funds are held in a segregated Barclays account, allowing deposits of up to £85,000 to be insured by the FSCS.
How to open a Coconut account
Coconut is a digital financial service, meaning the entire service runs via an app on your phone, and there are no physical branches. To sign up, customers have to download the app, fill in personal details, validate their identity, and their account will be opened, and a card will be sent to them in the post. The sign-up process is far more comfortable than the paperwork-laden processes at traditional banks, and usually, accounts are up and running within minutes.
Coconut accounts come with an account number and sort code just like any fully-functioning bank account in the UK, meaning you can add funds to your account via direct debit or quick transfer from another bank account. Coconut also makes it possible for customers to deposit cash into their accounts at their local Post Office; however, customers should be aware that the Post office charges a small fee for this service.
The Coconut app is designed to make business banking as straightforward as possible, and each feature is clear and easy-to-use. Earnings are the focus of this app, appearing on the homepage as soon as you launch it. From there, users can click on different features to see a tax estimation based on their earnings, see an easy-to-understand record of their spending, and automated alerts where tax returns are due. The Coconut app also makes it easy to see a record of paid and unpaid invoices and their value. Handy security features such as instant activation and deactivation of your card also provide customers with peace of mind about their money.
Review of monthly plans for Coconut customers
Coconut offers two account options for customers. The first is the “Start” account, which is available for no monthly fee. This plan offers automated bookkeeping, a handy receipt capture feature and tax estimation features. However, this plan also comes with a fee for cash withdrawals, a limited number of invoices, and commission charges on non-sterling transactions. Coconut also offers a “Grow” account for a monthly fee of £5. This account comes with automated bookkeeping, receipt capture, tax estimation, and unlimited invoices and no charges on non-sterling transactions. This account does still places a fee on cash withdrawals.
Other features of the Coconut account
Coconut does not currently offer any savings accounts or budgeting tools, placing its focus on business spending, invoices, finance management, and tax calculation.
Coconut does not currently offer a cashback rewards program. However, they have stated that they are working to introduce one in the future.
Coconut does not currently offer any loan services, simply offering a current account that focuses on managing business finances for freelancers, the self-employed, and small businesses.
Fees on international transactions and withdrawals vary depending on the type of Coconut account you subscribe to. The free “Start” account places a commission charge on non-sterling transactions and places fees on cash withdrawals. The “Grow” account does not place a charge on non-sterling transactions; however, they still place a fee on cash withdrawals.
- Quick and easy to open an account
- Useful tools to help you stay on top of spending and declare income at the end of the financial year
- Tax estimation estimates how much tax you will owe at the end of the financial year.
- Instant freeze and unfreeze for more convenient security
- The option for a “Grow” account offers more advanced features that encourage business growth
Coconut offers a useful service for freelancers and small business owners, helping them stay on top of their finances with sophisticated automated features. The option of a free account and a monthly subscription account will appeal to those just starting with their business or those requiring a bank account for their side business, offering great assistance when planning taxes.