Business Bank Accounts for Schools

Banking that fits the school day

For many schools in England, running a dedicated bank account is part of everyday financial management, not a nice‑to‑have. Local authority schemes generally permit schools to hold external accounts for their budget share, and some expect it. That means the decision about which account to use has a direct impact on governance, audit readiness and the interest you earn on public funds. With budgets tight and responsibilities high, the right account can reduce admin, strengthen controls and free up money for pupils. In this guide, we set out how specialist school accounts compare with generic business accounts, what to check on fees and protection, and how to meet typical onboarding requirements without delays. We keep it straightforward, so governors, headteachers and school business managers can feel confident about the choice they make.

Who should read this

This guide is for school business managers, bursars, headteachers, governors and trustees across England, Scotland and Wales who are responsible for day‑to‑day banking and financial stewardship. It is especially relevant to local authority maintained schools, academies and multi‑academy trusts reviewing accounts for better interest rates, lower fees and improved controls.

What a school bank account really is

A school bank account is a business‑style current account set up in the name of the school or trust. It keeps organisational finances clearly separate, supports transparent reporting and provides features tailored to how schools operate. Some high‑street providers offer specialist school accounts with no day‑to‑day transaction fees if eligibility criteria are met, alongside familiar services such as online banking, card payments, cash deposits and cheque processing. Charges typically apply for premium services like CHAPS or international transfers. Importantly, eligible deposits held with UK‑authorised banks are protected by the Financial Services Compensation Scheme up to the statutory limit per banking licence, helping safeguard public funds. Many schools pair their current account with a linked savings account to earn better interest on surplus cash without complicating daily operations.

How to choose and open the right account

Start by mapping your school’s needs: volume of payments, cash and cheque handling, approval workflows, user permissions and accounting software integrations. Decide how much you value branch access and a named relationship manager compared with digital‑first tools and lower fees. When you shortlist providers, compare monthly charges, transaction pricing and interest rates side by side, then look closely at limits, cut‑off times and how user roles are set up. To open or switch, expect standard anti‑money laundering and know‑your‑customer checks. Banks will ask for proof of identity and address for key signatories, plus governing documents, incorporation or registration details and official addresses. Academy trusts and independent schools should be ready to provide company numbers, trustees or persons with significant control, and board approvals. Preparing this pack in advance keeps applications moving and reduces back‑and‑forth during term time.

Why your choice matters this year

The Department for Education has encouraged academies and trusts to review banking to improve interest earnings and reduce administration. With interest rates changing and reserves sometimes held for capital projects, it is sensible to revisit where cash sits and whether it is working hard while remaining safely protected. For larger balances, platforms that place funds across multiple banks can help stay within FSCS limits while improving returns. Governance expectations also continue to emphasise robust controls, segregation of duties and clear audit trails. The right account can support this through multi‑user permissions, detailed exports and integrations that reduce manual errors. In short, your banking setup is a lever for both financial stewardship and educational outcomes, because better interest and fewer fees mean more resources for pupils.

At a glance: benefits and drawbacks

• Next steps:
  • List your must‑have features and volumes for a clean comparison.
  • Check current and linked savings rates, not just current account fees.
  • Confirm FSCS coverage per banking group and diversify if needed.

Good banking is quiet, transparent and safe - freeing staff to focus on teaching and pupils.

Small changes to banking can fund big classroom wins.

Watchpoints before you sign

Look beyond headline statements such as free banking to understand the small print. Clarify what counts as a chargeable transaction, how cash and cheque deposits are priced and whether card machine settlements incur fees. Confirm user permission models support at least dual approval for payments and practical read‑only access for governors or auditors. Review cut‑off times for same‑day payments, cash collection arrangements and how lost cards or mandate changes are handled during holidays. Consider how much of your balance can be moved into a savings account without disrupting operations and whether a cash platform could spread larger sums across multiple institutions within FSCS limits. Finally, ensure onboarding requirements align with your governance cycle so resolutions and signatory updates are agreed before you apply.

Other routes to manage school money

1. Linked savings accounts with your existing bank - move surplus funds to earn interest while keeping operations simple.
2. Cash‑savings platforms for trusts - diversify larger balances across multiple banks within FSCS limits.
3. Challenger bank current accounts - low fees and strong digital tools for day‑to‑day transactions.
4. High‑street bank packages - branch access, cash handling and relationship support for complex needs.
5. Notice or fixed‑term deposits - higher rates on funds not needed immediately, aligned to budget cycles.

Common questions, answered

Always confirm eligibility, fees and protection directly with the provider before you proceed.

Do schools need their own bank account?

In England it is normal for many maintained schools to hold their own account for day‑to‑day funds, and academies and trusts operate accounts in their own name. This supports autonomy, interest income and clear governance.

How much of our money is protected by the FSCS?

Eligible deposits at UK‑authorised banks are protected up to the statutory FSCS limit per banking licence. If you hold larger balances, consider spreading funds across different banking groups to increase protected coverage.

Are specialist school accounts really fee‑free?

Many offer no routine day‑to‑day transaction fees if you meet eligibility criteria. However, premium services such as CHAPS, international payments or cash handling above set thresholds typically attract charges.

What documents will we need to open an account?

Expect proof of identity and address for signatories, official registration or incorporation details, governing documents and evidence of authority from your board or governors. Banks will also run standard AML and KYC checks.

Should we choose a digital‑only provider or a high‑street bank?

Digital challengers often have lower fees, rapid onboarding and strong apps. High‑street banks provide branch networks, cash services and relationship managers. Choose based on your transaction profile and support needs.

Where Switcha fits in

Switcha will connect you with the best options for what you’re looking for, from specialist school accounts to low‑fee digital challengers and high‑street providers. We help you compare fees, features and interest rates in plain English, so you can choose with confidence and keep more money focused on pupils.

Important information

This article is general guidance, not financial advice. It does not take account of your school’s specific circumstances. Always check eligibility, fees and FSCS protection directly with providers, and seek professional advice where appropriate.