Running charities involves managing finances efficiently to ensure the organisation’s long-term sustainability and success. One crucial aspect of financial management is choosing the right bank accounts for your charity.
This article will provide everything a UK charity needs to know about getting a current account and savings account, including the options available, legal requirements, best charity bank account providers in the UK, and a detailed guide to getting set up.
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- Bank accounts for UK charities – what are the options?
- Legal requirements for charity bank accounts in the UK
- Best charity bank account providers in the UK
- How to set up a charity bank account in the UK
- Tips for choosing a charity bank account in the UK
- Conclusion
- FAQ
Bank accounts for UK charities – what are the options?
Charities in the UK have several options when it comes to choosing a bank account, including:
- High street banks: Most high street banks offer charity bank accounts, with different benefits, terms and conditions, fees and services
- Specialist charity banks: Specialist banks, such as the Charity Bank and Triodos Bank, are tailored to meet the specific needs of charities and social enterprises
- Building societies: Building societies offer bank accounts to charities and other organisations, but their options may be limited
- Credit unions: Credit unions offer savings and loan services to members, including charities, who can become members of the credit union
Legal requirements for charity bank accounts in the UK
Charities in the UK are required to have a separate bank account for their charity funds. This requirement is to ensure that the charity’s funds are kept separate from the trustees’ or employees’ personal accounts, reducing the risk of fraud, embezzlement or mismanagement.
To open a charity bank account, the charity must be registered with the Charity Commission or an exempt charity. Registered charities must provide a copy of their registration certificate, while exempt charities must provide proof of their exempt status.
The charity may also need to provide other documentation, such as a constitution or governing document, proof of identity and address of the trustees or signatories, and details of the charity’s activities and finances.
Best charity bank account providers in the UK
There are several banks and financial institutions in the UK that offer bank accounts for charities, each with different features and benefits. The following are some of the best charity bank account providers in the UK:
Charity Bank
The Charity Bank is a specialist bank that provides tailored banking services to charities, social enterprises and community organisations. They offer a range of accounts, including current accounts, savings accounts, notice accounts and term deposits, with competitive rates and no hidden fees.
Triodos Bank
Triodos Bank is a specialist bank that only lends to organisations that create social, environmental or cultural value. They offer a range of accounts, including current accounts, savings accounts and fixed-term deposits, with competitive rates and a commitment to social and environmental sustainability.
Lloyds Bank
Lloyds Bank offers a range of charity bank accounts, including current accounts, savings accounts, and deposit accounts, with tailored features and benefits for charities.
Barclays Bank
Barclays Bank offers charity bank accounts with no monthly fees and a range of features and benefits, including online banking and a dedicated relationship manager.
How to set up a charity bank account in the UK
Setting up a charity bank account in the UK involves the following steps:
How to get a charity bank account
- Choose a bank or financial institution
Research and compare different banks and financial institutions that offer charity bank accounts, and choose the one that best suits your charity’s needs.
- Contact the bank
Contact the bank or financial institution and provide the required documentation, including your charity’s registration certificate, constitution or governing document, proof of identity and address of the trustees or signatories, and details of your charity’s activities and finances.
- Complete the application form
Complete the application form provided by the bank, providing all the required information, including the name of the account, the signatories and their roles, and the purpose of the account.
- Wait for approval
Wait for the bank to approve the application and set up the account. This may take a few days to a few weeks, depending on the bank’s processing time and the complexity of the application.
- Activate the account
Once the account is set up, the charity will need to activate the account by depositing funds into it. The bank will provide details of how to do this and any minimum deposit requirements.
- Manage the account
Once the account is activated, the charity can start managing their finances through the account, including making deposits, withdrawals, transfers and payments. The charity will need to keep accurate records of all transactions and ensure that the account is used only for charitable purposes.
Tips for choosing a charity bank account in the UK
When choosing a charity bank account in the UK, there are several factors to consider, including:
- Fees and charges: Look for a bank that offers low or no fees for charity accounts, including monthly maintenance fees, transaction fees, and ATM fees
- Interest rates: Look for a bank that offers competitive interest rates on savings accounts and term deposits, which can help the charity grow its funds
- Access to funds: Look for a bank that offers convenient access to funds, including online banking, mobile banking, and ATM access
- Customer support: Look for a bank that offers good customer support, including a dedicated relationship manager or account manager who can help with any queries or issues
- Ethical and social responsibility: Look for a bank that has a commitment to ethical and social responsibility, including supporting charities and social enterprises and promoting sustainability
Conclusion
Choosing the right bank accounts for a charity in the UK is an important aspect of financial management, and there are several options available, each with different features, benefits, and requirements.
By understanding the legal requirements, researching and comparing different banks and financial institutions, and considering factors such as fees, interest rates, access to funds, customer support, and ethical and social responsibility, a charity can find the right bank account to meet its needs and ensure its long-term sustainability and success.
FAQ
A charity bank account in the UK is a financial account specifically designed for charities and non-profit organizations. It allows charities to manage their finances, including receiving donations, paying bills, and investing their funds.
Yes, UK charities are required to have a bank account for legal and financial reasons. A bank account enables charities to manage their finances, keep track of donations and expenses, and report their financial activities to the Charity Commission.
The main types of charity bank accounts available in the UK are current accounts, savings accounts, and term deposit accounts. Each type of account has its own features, benefits, and requirements.
The documents required to open a charity bank account in the UK vary depending on the bank or financial institution. However, most banks will require the charity to provide proof of identity, proof of address, proof of charitable status, and details of the charity’s activities.
Yes, a charity can have multiple bank accounts in the UK. Some charities choose to have separate accounts for different activities or projects, while others prefer to consolidate their funds into a single account.
The fees associated with charity bank accounts in the UK vary depending on the bank or financial institution. Some banks offer free or low-cost accounts for charities, while others may charge monthly maintenance fees, transaction fees, or other fees.
Yes, charities can earn interest on their bank accounts in the UK. Most banks offer savings accounts and term deposit accounts that pay interest on the charity’s funds.
No, UK charities are required to have a separate bank account for their finances. Using a personal bank account for charity finances can create legal and financial issues and may affect the charity’s tax status.
Yes, charities can switch banks in the UK. However, the process may take some time and involve additional paperwork and administrative tasks.
If a charity closes down, any remaining funds in the bank account will need to be distributed to another charity or non-profit organization with a similar charitable purpose. The Charity Commission may also need to be notified of the closure and the distribution of funds.