What cash actually costs, and where the charge hides

A café owner I know moved her account because an advert promised free business banking. Eighteen months later she was paying more than before and could not work out where it was going. She sent me two statements and asked me to find it.

It was going into a line called cash payments.

Nine pounds here, twelve there, never large enough to query.

The three shapes a cash charge takes

Every published tariff in this market charges for notes in one of a few shapes, and the shape matters more than the headline rate.

The first is a rate per hundred pounds. Barclays prints its own line exactly like this: “Cash Payments (in or out) £0.90 (Per £100)” on the Mixed Payments plan, and describes that plan as one “designed for businesses that use cash, cheques or a range of ways to make and receive payments”. Straightforward, and it scales with no ceiling.

The second is a percentage with a floor. Starling charges “0.7% of the deposited amount or a minimum £3 fee, whichever is higher”.

That floor is invisible at four thousand pounds and brutal at three hundred.

A twenty five pound deposit pays the same three pounds as a deposit of four hundred and twenty eight, which is a charge of twelve per cent on the first and seven tenths of one per cent on the second, for the identical act of handing money to the same counter.

The third is a step. Tide's own pricing page puts it as “£2.50 for deposits up to £500, or 0.99% of the total deposit amount for deposits over £500” on the free plan. Cross the step and the charge changes character entirely.

Where the money goes at £4,000 a month

Take an ordinary shop banking four thousand pounds of notes a month. Nothing exotic. Here is what the four published tariffs I hold produce:

Published tariffs applied to £4,000 a month, read 2 September 2026. Introductory offers excluded.

The distance between the top and the bottom of that table is £462 a year.

Same notes. Same counter. Same twelve months.

Notice which two plans are furthest apart. They are the same bank. Barclays sells two price plans, and choosing the wrong one costs a cash business almost three hundred pounds a year more than choosing the other. That is not a comparison between competitors. That is a form you filled in when you opened the account and have probably never revisited.

The plan you are on is a decision you made once

The e-Payments plan is not a bad product. Barclays calls it the plan “designed for businesses that receive electronic payments and make payments mainly through Online Banking and debit cards”, and for that business it genuinely is cheaper, because electronic payments cost nothing on it while the Mixed plan charges 35p each.

The trap is that businesses change and plans do not. A studio that took nothing but card payments in 2022, then started selling at weekend markets in 2025, is now sitting on a plan built for the opposite of what it does, paying £1.50 for every hundred pounds of market takings instead of ninety pence, and nobody at the bank will write to point this out because nobody at the bank is looking.

I have not found a provider that reviews your plan against your actual usage and moves you. If one exists, I would like to know about it.

The charge that appears when the notes never leave the shop

Some businesses never carry cash to a counter. It sits in a safe until somebody collects it, and that collection carries its own price.

Barclays describes the service as “a secure and convenient way for customers to arrange for cash and cheques to be collected from their premises”, run through G4S. The pricing runs backwards from what you would expect:

Barclays Collect, published business tariff, read 2 September 2026.

The small business pays and the large one does not. There is a logic to it, because the van costs the same to send either way, but the effect is that the businesses least able to absorb a charge are the ones carrying it.

A missed collection on their side is free. A missed collection on yours costs the same fifteen pounds again.

The charge you cannot see because it is a distance

There is one more cost and it never appears on a price list.

The Which? tracker states it flatly: “Banks and building societies have closed 6,871 branches since January 2015, at a rate of around 53 each month”, which it works out as “69% of the branches that were open at the start of 2015”. Lloyds Banking Group has closed the most of any group at 1,611, with NatWest Group on 1,565 and Barclays the largest single bank at 1,236.

If the counter that took your takings is now eleven miles away, the ninety pence per hundred is no longer the price. The price is ninety pence plus the hour somebody spends driving, twice a week, forever.

That hour does not appear in any comparison table, including ours, and it is frequently the largest number in the whole calculation.

The inversion nobody warns you about

Everything above assumes a business that banks its takings in a handful of visits. Change that assumption and the table turns over completely.

Consider a market trader banking five hundred pounds a month, but doing it twenty times, because that is what a stall generates and there is no safe to hold it in.

Published tariffs applied to two patterns of the same behaviour, read 2 September 2026. Starling and Tide figures include their per-deposit minimums.

Read the two columns against each other. The cheapest plan in the first is the most expensive in the second, and the most expensive in the first becomes the cheapest by a distance.

The cause is the minimum. Three pounds on a twenty five pound deposit is a twelve per cent charge, and no headline percentage prepares you for that. Barclays, charging purely by volume with no floor, does not care whether the four thousand arrives in one bag or forty.

I got this wrong when I first built the calculator. I had assumed the annual volume was the number that mattered and modelled everything on a single monthly figure, which quietly favours the percentage-only plans. It took me a fortnight to work out why the answers did not match what two readers were telling me about their own bills. The pattern of deposits matters as much as the total.

Limits, which are not fees but behave like them

A tariff can be cheap and still fail you, because most providers cap how much cash they will take.

Starling publishes its ceiling openly for one account type: “the sole trader account cash deposit limit is £5,000 a day and £100,000 a calendar year”. A business turning over more than that in notes does not have a pricing problem with Starling. It has a product that will stop working in November.

Limits are the most under-read line in any price list. They are usually printed away from the fees, in the schedule rather than the marketing page, and a business only discovers the ceiling by hitting it on a Friday afternoon.

Before committing, check the daily limit, the annual limit, and whether either applies per account or per business. Then hold that against your best month rather than your average one, because a ceiling does not care what your average was.

Reading your own tariff in ten minutes

Find your provider's business price list. It is a PDF, it is not linked from anywhere obvious, and searching for the provider's name with the words price plan usually finds it faster than the website navigation does.

Then look for the following, in this order.

What it charges per hundred pounds of cash, in or out. Whether there is a minimum per deposit, which changes everything for small frequent takings. What the monthly account fee is, since a free percentage attached to an expensive account is not free. And whether electronic payments cost anything, because on some plans they do and that is where a card-heavy business quietly loses money instead.

Multiply by what you actually banked last month, not what you expect to bank next month.

Cheques, which are not dead and are not free

Every year somebody announces that cheques have gone.

Then a local authority pays an invoice with one.

They carry their own line on the tariff and it is rarely the same as cash. Barclays charges 65p per cheque on the Mixed plan and £1.50 on e-Payments. Tide charges 90p, which its own page breaks down as “70p plus our standard 20p transfer fee”, a construction worth noticing because that transfer fee attaches to other things as well. The same page prices the other route bluntly: “Cash deposits (through PayPoint) - 3% of the total deposit value”, more than four times its own Post Office rate.

For most businesses this is noise. For a builder paid by three housing associations a month, it is £23.40 a year with Tide and £54 with Barclays on the wrong plan, and it sits in a line nobody reads.

Putting your own number together

The full annual cost of taking money is a sum, and only its first term ever appears in an advert.

Start with the cash charge: your monthly notes multiplied by the rate, or the per-deposit minimum multiplied by the number of deposits, whichever is higher. Add the monthly account fee, times twelve. Add cheques and electronic payments if your plan charges for them. Then add the collection charge if the notes never leave your premises, which for a business banking under £2,500 a time runs to £15 plus VAT every visit.

For the shop we started with, banking £4,000 a month in four visits on the Barclays Mixed plan, that comes to £504 a year in cash charges alone. Move the same behaviour to Starling and it is £336. Change the pattern to twenty small deposits and the answer inverts: £126 a year with Barclays, £720 with Starling.

Those four numbers are the entire argument, and none of them require an opinion.

What I could not check

Four providers sit in the calculator, not seventeen.

I have not been able to find a current published cash tariff for HSBC, Lloyds or NatWest that I would put my name to. Their business account pages describe plans without printing the per-hundred rate where I could reach it, and I am not going to estimate a number and let somebody plan around it. The Tide figures come from its own support pages, which carry a 2024 date, so they may have moved since.

If you hold a recent statement or price list from any of those, send it over. We will read it, cite it, and put the provider in the calculator with the date on it.