Business Bank Accounts for Charities

Getting your charity’s banking right from day one

Setting up the right bank account is not just tidy bookkeeping - it is part of good governance. In the UK, trustees must ensure charitable funds are held and managed appropriately. A dedicated business bank account separates donations and grant income from personal money, making it easier to meet regulatory expectations, reassure funders and keep clean audit trails. You will also need suitable banking in place for HMRC matters and to access tax reliefs.

Banks verify who you are and how your charity is run, which means gathering documents such as your governing document, trustee details, minutes authorising the account and proof of income. Planning this early avoids delays and helps you choose the account that fits your legal status and turnover. Whether you are an emerging community group or a registered charity, the right account will support day-to-day operations and protect your reputation.

Good banking is part of safeguarding charitable assets - not optional admin.

Who will find this helpful

This guide is for UK trustees, treasurers and volunteer finance leads across registered charities, CIOs, CICs with charitable aims, clubs, societies and unregistered community groups. If you are choosing your first account, reviewing fees or moving to stronger governance features, you will find clear, practical steps here.

What a charity-ready account actually is

A charity-appropriate business bank account is designed for organisations that do not distribute profits. It provides the core current account functions your team needs - receiving donations and grants, paying suppliers, running payroll and managing regular giving - while supporting trustee controls such as multiple signatories and dual authorisation for online payments.

UK banks often distinguish between registered charities and unregistered community groups. Some providers accept unregistered groups where aims are charitable, while others require full registration for certain products. Turnover thresholds can determine which account you can open and whether day-to-day banking is free. Many high street names offer fee-free banking for smaller charities within a stated annual income cap, after which transaction or monthly charges apply according to the tariff.

You can also separate operational cash from reserves using notice or fixed-rate savings designed for non-profit organisations. Ethical and specialist banks provide options that align deposits with social impact lending.

How to open and manage it well

Start by confirming your legal structure, beneficiaries and whether you need Charity Commission registration. Prepare your governing document, trustee or committee details, ID and address checks, minutes authorising the account, and proof of income. Timing matters. While banks can often onboard groups before full registration, they must verify your organisation’s existence, so gather letters of award, pledges or accounts that evidence income.

Choose an account that fits your turnover, not just today but over the next 12 to 24 months. If you are near a free-banking cap, plan for potential charges. Set strong controls from the outset. Use multiple signatories, enable dual authorisation for online payments and document spending limits in your minutes. Keep signatory lists in sync with trustee changes and review access rights at least annually.

Keep your operational account lean. Park reserves in an appropriate savings or notice account to balance liquidity and interest. Record-keeping is critical - reconcile monthly, store evidence for grants and restricted funds and keep a simple schedule of fees so trustees can monitor total cost.

Two-person controls reduce risk and reassure grant funders.

Why the account you pick matters

Selecting the right account affects cost, compliance and confidence. Free day-to-day banking is common for smaller charities within income caps set by providers, helping you keep overheads low. As your income grows, tariffs for cash handling, deposits and automated payments can vary widely, so it pays to compare.

Eligibility rules differ between registered charities and community groups. Applying for the wrong product can lead to delays or declines. Specialist charity banks and ethical providers may offer UK-based support teams, governance-led features and savings options that channel funds into social impact. Many accounts highlight multiple signatories and dual authorisation, helping trustees demonstrate robust controls.

Deposit protection matters too. UK-authorised banks participate in the Financial Services Compensation Scheme which protects eligible deposits up to the statutory limit per authorised institution. Always check how cover applies to your organisation and review the bank’s tariff and terms to understand the total cost of banking.

The upsides and trade-offs

Red flags and fine print

Check that the account is genuinely open to your legal form and turnover. If you are an unregistered community group, confirm the provider accepts your status and understands your charitable aims. Read the tariff carefully. Free banking often excludes certain cash or manual transactions and can switch to paid when your annual income exceeds the cap. Understand limits on signatories and how dual authorisation works in practice, including mobile approvals.

Watch onboarding requirements. Banks may ask for minutes authorising the account, proof of income and trustee details even before registration completes. Build a simple checklist and timeline so you can respond quickly to requests. Review FSCS information and how it applies to your organisation across linked brands within the same banking group. Finally, document who can change signatories, how you remove leavers and what happens if a card is lost or a payment is disputed.

Viable alternatives

1. Community or club and society accounts - suitable for voluntary groups that are not registered charities but meet non-profit criteria.
2. Standard business current accounts - sometimes used by unregistered groups where charity accounts are not available.
3. Specialist charity banks - everyday accounts and savings with sector-focused support.
4. Ethical banks and building societies - deposits aligned with social or environmental lending.
5. Charity savings, notice and fixed-rate accounts - for ring-fenced reserves separate from day-to-day cash.

Common questions

Q: Do we need a charity bank account before registering? A: You do not strictly need one to register, but banks must verify your organisation. Gather proof of income and governing documents early to avoid delays.

Q: Can unregistered groups open accounts? A: Many banks provide community or club accounts for unregistered groups with charitable aims. Some products are restricted to registered charities, so check eligibility first.

Q: Is free banking really free? A: Core transactions can be free within income caps, but tariffs apply for cash handling, certain deposits or manual actions. Review the price list and plan for growth.

Q: How many signatories should we have? A: Aim for at least two or three authorised signatories and use dual authorisation for online payments. Record these controls in your minutes and review annually.

Q: Are our deposits protected? A: Eligible deposits held with UK-authorised banks are protected by the FSCS up to the statutory limit per authorised institution. Always check how protection applies to your setup.

How Switcha can help

Switcha makes it easier to compare charity and community banking options across UK providers. We will map your legal status, turnover and governance needs, then connect you with the best options for what you are looking for. No pressure - just clear comparisons and simple next steps.

Important information

This guide is general information for UK audiences and is not financial, legal or tax advice. Always check a provider’s eligibility, tariff and terms, and consider professional advice tailored to your charity’s circumstances. Next step - verify your documents and shortlist accounts today.