If you are thinking of setting up a charity you will need to open up an account with a bank. You have probably asked yourself “where should I open a bank account for my charity?” The choice can be a bit overwhelming. So, to help you out we have done the hard work for you.
Below are our top pics for a charity bank account. We have striven as best we could to include the companies which are the most ethical options. Many of the terms, conditions and offers from the high street banks were much the same as those offered below and so we left them out to avoid unnecessary repetition. However, if you have a relationship with a bank already and have good experiences with customer service and the like then it might be worth staying with them. However don’t make that decision until you have seen the fantastic perks being offered by the banks below.
Remember applying for a bank account for your charity can also be a long process taking weeks, or even months! So when filling out forms be careful to do so correctly. You may be asked for proof of status such as registration number (but if you don’t have an account you won’t be registered so don’t be flummoxed by this) or
for your charity. Check the details of what is required before applying as this will save time in the long run.
Who should my charity bank with?
The CAF is a charity in their own right so they make a natural home for charities to bank with confidence and trust: being regulated by Financial Services and a member of the Financial Services compensation scheme ensures that your money is as safe as in any other bank at least. They offer a wide range of accounts with features which include free online banking for current account, which requires an initial deposit £1,000, which is perhaps a bit too steep for many newly started charities. However if money is no object then you can enjoy free day-to-day banking and lower CHAPS fee and a yearly audit certificate for only £14 per account.
Newcomer to the banking world, Metro Bank, took the industry by surprise by opening in 2010. They opened their branches later than their competitors (8pm), not only allowing but welcoming pets (they even refund their customers the fee for rehoming dogs and cats) and children, to supporting their local community through organising networking events and financial education in schools. All of which made it the friendly face of banking.
Community Accounts have terms which are similar to most high street banks but worded rather differently. For example the first £10,000 paid in or out each month at counters is free and you get 200 free transactions a month; which for almost everyone will amount to “no fees for day to day banking” which is how other banks tend to word it but at least they don’t have to include the dreaded asterix over the word “free”. There is no monthly account fee which is good. You can also get a debit card which is free to use in Single European Payment Area countries (see
) which if you do work or travel in Europe a lot is a fantastic perk. Overdrafts subject to status, no interest on deposits. Auditors report is £25 which is more expensive than the CAF for example (see above). Branches mainly located in the London area for now.
Formed in 1890, as the Salvation Army Bank, Reliance Bank Ltd is jointly owned by the Salvation Army Trustee Company and Salvation Army International Trustee Company. They offer free banking when the account is operated in credit for charities with a turnover of less than £500,000. Current account facilities such as cheque books and electronic payments. You can pay in through a number of High Street chains such as Lloyd’s, Natwest, HSBC and RBS. VISA card, Overdraft and Lending facilities are available on application. You also get a personal relationship manager which might come in handy ironing out the any teething problems that might arise..
Derived from the Greek for ‘three way approach’ (people, planet and profit) Triodos Bank is a pioneer in ethical banking. While based in The Netherlands (Zeist) it has branches in Belgium (Brussels), the United Kingdom (Bristol), Spain (Madrid) and Germany (Frankfurt). Triodos only lends to banks it judges to be of a social or ethical nature lending deposits to fair trade initiatives, organic farms, renewable energy projects and other social enterprises.
Unlike most other charity accounts Triodos actually offers a modest interest on balances over £5,000. Bank by phone, post and online. There are small charges for each transaction see
When it comes to choosing a bank to recommend to our partners and clients setting up a new charity we are torn between the Unity Trust Bank and the Co-Op because of the fantastic perks they have on offer their customers.
Specialise in charities and social organisations. No account charges on standard transactions in the account for charities and social enterprises with less than £50,000 turnover. Standard set of perks including cheque book, online and paper statements and free internet and telephone banking. For a fee of £5 a month you can access the Select Account which gives the same standard benefits for any charity or other organisation with turnover less than £500,000 including
with GrantNet and Sage, discounts on insurance and lifestyle and travel savings for yourself and your colleagues. You also get two ALTO pre-paid MasterCards. Free access to GrantNet and a discount on Sage make this a serious contender for the charity which can afford the sixty pounds a year fee.
Community Direct Plus
provides free banking for community groups and charities. Interest is paid on credit balances over £2,000. Manage your account online, by telephone or at Post Office branches. And the opportunity to apply for project funding through the Customer Donation Fund which has donated over £600,000 since 2003 to over 700 charities. Co-operative Bank donates 20p per £100 deposited in its accounts for redistribution. Donations range between £500-£1000. So because it also gives you access to another source of grant funding we have chosen it as the best option.
Everyone is different…
Which sounds like we are trying to not give a recommendation. We started out saying we would pick our favourite and stick with it but seriously, it was so hard to choose between the Co-Op and Unity Trust because of their additional perks. Access to GrantNet we can assure you is a great addition. Whereas being able to pick up a little extra money, especially in those tough early days when you’ll struggle to attract funds from larger trusts, makes the Customer Donation Fund is a great perk. We wish more banks would follow suit!
However the right bank for you will be a very individual choice. For us here at Green Shoots an Ethical Mode of Business was very important to us, but it might not be to you. We have shown above however that the market leading accounts are actually offered by the more by and large ‘ethical’ banks anyway. Your choice will also depend on the type of work you do, where you do it and how much cash you expect to turnover! We hope this guide has proved useful in reducing the plethora of choices down to a handful of the best options.
We hope you find someone you can use and trust. Banking is all about relationships and we hope that whomever you chose you will have a long and fruitful partnership with them.
This post was not sponsored or suggested by any banking services provider. All information is correct at time of posting. Any discrepancies or changes can be notified to [email protected] and we will do our best to update them.
And don’t forget to r
egister yourself with HMRC
for tax purposes
Do you bank already? If so, who with and have you enjoyed your time with them? Let us know on
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